If you’ve read our previous blog posts, it means you’re very passionate about your dream house, and you should be. We don’t build a new house every year. It’s a life long struggle that lets you save enough to build a house (probably once in a lifetime). So get yourselves a home builder who does his job out of passion, not merely because it’s his job.
If your home builder is passionate about his job, he’ll know how much this house means to you, so he’ll make sure that each one of your requirements is met and all your questions are answered satisfactorily.
So, what you did?
We went on a house-builder hunt and met quite a few developers. They all had their own registered companies and they were handling multiple projects. Almost all of them showed us their projects that were either completed, near completion and the projects they just started.
Find yourselves a home builder who you feel more comfortable talking to. The company should be credible, and they should already have under construction projects. But you’ll deal with the builder and not the labor, so make sure that he understands your concerns and he is the person you can trust.
Before you go and talk to a home builder, you should know which type of contract you are going to sign with your favorite home builder. So , let’s discuss the contracts first.
Types of Contracts
According to our research, there are two major types of contracts
Fixed Price/Turn Key contract:
You and the builder will agree upon a fixed price which you’ll pay when certain stage/milestone is completed (as mentioned in the agreement). The project will be divided into stages or milestones. Based on your agreement, you’ll pay your builder for that stage when it’s completed. The terms of you contract can vary. You may pay half in advance and half when the milestone is completed.
This can be a bit costly but on the plus side, your house will be built at a fixed price and you don’t need to get construction material or worry to pay labor. All will be handled by the builder. In short, you’ll hire someone to build your house and they will give you a key to your newly-built house.
Labor Rate contract:
Your builder will quote a rate for labor. You’ll pay the labor cost and also the material required for the construction will be purchased by you. This can be cost effective if know how/where to buy good quality construction material at lower rates. You only have to pay the labor and provide the material. This gives you control over the construction process.
This can be a bit hectic as you’ll be going to keep track of all the work, i.e. how much material was used and if there is shortage of anything.
There can also be other types of contract, but these two are more commonly used in our area.
Which Contract type did we chose?
We went with a Fixed Price contract, as our busy lives won’t allow us to visit the site every other day. In our agreement, Project was divided into 3 milestones: Raft, Grey structure and finishing. We divided the payment for each milestone into advance and after completion, i.e. half the amount for that milestone was paid in advance and rest of the half when the milestone was achieved.
Our builder went through the maps and designs to make sure that he knows all the details, specially the structural design. After that, he proposed Rs. 2200/ sq. ft cost for this project. Our estimate was same so we gladly accepted the proposal, and the contract was signed.
Our home builder also agreed to keep us updated by sending the pictures of work progress every other day via Whatsapp, which is great and very convenient. We are also hoping to visit the site at-least once a week.
Let the construction begin!
