5 Myths costing you thousands on your new home build
Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction ManagementYou've signed your building contract. You breathe a sigh of relief—the hard part is over, right?
Every week, I speak with home owners who discover—too late—that what they thought was "locked in" their contract actually wasn't. They're facing thousands in unexpected costs, delayed completion dates, and disputes over what was supposedly "agreed upon."
The truth? Most of the heartache, financial stress, and disputes during a build come from common misconceptions about building contracts—myths that seem harmless until they cost you real money.
Today, I'm busting the five most expensive myths I've encountered over the past year. Understanding the reality behind these myths can save you thousands of dollars and months of stress during your build.
Myth 1: Once you sign the contract, there won't be any other costs during the build
The reality: Every building contract contains provisional allowances and variation clauses designed to account for unforeseen expenses during your build.
Let me give you a real example. Sarah and Tom signed their contract with a $450,000 fixed price. They thought they were done with budgeting. Six months into their build, they discovered their in-ground site conditions required an additional $18,000 in foundation work—all clearly stated under their contract's provisional allowances.
Here's what most people don't realise: the final amount for provisional sums and variations won't be known until the very end of your build. You might see line items like:
In-ground site conditions: $15,000 provisional allowance
Rock excavation: $8,000 provisional allowance
Services connection: $12,000 provisional allowance
These aren't fixed costs—they're estimates that can (and often do) change.
The key is preparation, not prevention. You can't eliminate all additional costs, but you can absolutely avoid being blindsided by them.
Take those in-ground site conditions I mentioned earlier. Once you've identified that these costs aren't fixed in your contract, you can conduct a site survey pre-construction. Then check with your builder that the provisional allowance actually aligns with the known condition of your site. This simple step validates that the allowance is sufficient and dramatically reduces the chance you'll be thousands out of pocket during your build.
Action step: When reviewing your contract, highlight every single provisional allowance and variation clause. List out all the potential reasons additional costs can arise during your build. This becomes your "watch list"—items to monitor and validate before construction even begins.
Myth 2: The builder will handle everything, including permits and authorities
This misconception is particularly painful because it's often discovered at the worst possible moment—at the end of the build.
Picture this: You're weeks away from moving into your new home. The occupancy permit is due. Then you discover that a critical condition holding up the permit isn't actually your builder's responsibility to resolve. It's yours. And you had no idea.
Yes, this really happens. I've seen it multiple times.
The assumption that "the builder handles everything" is dangerous because it varies dramatically from contract to contract. Some builders take care of all building permits, authority approvals, and utility connections. Others only handle specific permits and leave certain authority works or utility connections to the owner.
The critical issue? It's rarely obvious from a casual read of the contract what falls under whose responsibility.
I recently worked with a client who discovered—three months before completion—that connecting to town water was their responsibility, not the builder's. This wasn't explicitly stated in the main contract terms. It was buried in the exclusions. The cost? An unexpected $8,500 and a two-month delay while they scrambled to arrange it.
Action step: Before you sign, get explicit confirmation in writing of exactly what the builder is responsible for regarding:
Building permits and certifications
Authority approvals (council, water, sewerage)
Utility connections (water, gas, electricity, NBN)
Occupancy permits and final inspections
If anything falls under your responsibility, make sure you understand exactly what it involves, how to arrange it, when it needs to happen, and how much it will cost.
Myth 3: Building contracts are standard, so there's no need to look at them in detail
"It's just a standard contract" might be the most expensive assumption you can make about your building contract.
Here's what people don't realise: Even when builders use standard contract templates (like HIA or MBA contracts), there are entire sections that must be filled out individually for each project. And these variable sections cover the most important parts of your agreement:
Construction timelines and completion dates
Payment schedules and milestone amounts
Defect liability periods
Grounds for variations
Extensions of time clauses
Special conditions and exclusions
Two "standard" contracts from the same builder can have wildly different terms depending on how these sections are completed.
I reviewed two contracts last month from the same building company. Both used identical standard templates. But Contract A had a 12-month defect liability period while Contract B had only 90 days. Contract A allowed extensions of time for supply delays over 5 days; Contract B allowed extensions for any delay whatsoever. The difference in owner protection was enormous—all within "standard" contracts.
Action step: Invest in having a professional review your contract before signing. You're not looking to change everything—you're ensuring you understand what you're agreeing to and that the terms are reasonable. It's far better (and cheaper) to get expert advice upfront than to discover unfavourable terms when you're already mid-build and conflicts arise.
A single contract review can save you tens of thousands in disputes or unfavourable terms you didn't spot.
Myth 4: The completion date for my build is locked in
"We'll be in by Christmas" is one of the most heartbreaking statements I hear from new home builders.
Because in most cases, that completion date isn't actually locked in at all.
Every building contract contains an "extensions of time" section. This clause allows your builder to extend the completion date for pre-agreed reasons—and there are usually quite a few of them:
Weather delays (rain days exceeding a certain threshold)
Supply chain issues or material shortages
Delays in obtaining permits or approvals
Variations requested by the owner
Industrial action or disputes
Unforeseen site conditions
Some contracts even include catch-all clauses like "any delay beyond the builder's reasonable control."
Here's a real example: James and Michelle had a contract completion date of March 15. By January, their builder had claimed extensions totalling 12 weeks due to rain delays, a two-week timber supply delay, and a one-week delay in council approval. Their new completion date? June 7—nearly three months later. All completely legitimate under their contract's extension of time clauses.
The financial impact? They were paying rent for three extra months ($6,000), their fixed-rate construction loan converted to a variable rate (costing an extra $2,400), and they had to rebook and pay cancellation fees for their moving company.
Total cost of "flexible" completion dates: $8,400 in expenses they never budgeted for.
Action step: Read your extensions of time clause carefully. Make a list of every reason your builder can claim an extension. When any of these situations occur during your build, document them immediately and understand their potential impact on your timeline. Also, check whether your contract includes any penalties or compensation if the builder exceeds the extended completion date without valid reason.
Myth 5: Everything that's been discussed pre-contract is included
This is perhaps the most dangerous myth of all—because it feels so reasonable.
You've spent months working with your builder. You've had countless conversations, exchanged dozens of emails, discussed every detail of your dream home. Of course all those agreements are included in your build, right?
Not unless they're written in the contract.
The pre-contract phase can stretch over 6-12 months. During this time, there are hundreds of conversations about what's in and out of scope. But here's the legal reality: if you ever end up in a dispute with your builder, a judge can only consider what is expressly documented in your signed contract.
Those verbal agreements? The emails about including feature lighting? The discussion about extending the alfresco by 2 metres? If they're not in the contract, they legally don't exist.
I worked with a couple who had extensive email correspondence with their builder about including a specific stone benchtop and rainfall shower heads in their ensuite. When these items weren't installed, they went back to the emails. The builder's response? "That wasn't in our contract. Those are upgrades that would need to be added as variations."
The couple's choice: Pay an additional $8,500 for items they thought were already included, or settle for standard fixtures they never wanted.
They paid. But they never should have been in that position.
Research from the Housing Industry Association shows that scope disagreements account for 42% of all building disputes—and most stem from verbal agreements that weren't documented in the contract.
Action step: Before you sign your contract, create a comprehensive list of every agreement, discussion, and decision you've made with your builder. Then cross-check this against your contract's inclusions, exclusions, and special conditions. Everything important should be documented in the special conditions section. Have a professional review both the inclusions and exclusions to ensure nothing is missing and nothing unexpected has been excluded.
Think of your contract as your protection document. If it's important enough to discuss, it's important enough to write down.
The bottom line: Understanding isn't about changing - it's about protecting
These five myths share a common thread: they all stem from assuming that building contracts work the way we think they should, rather than the way they actually do.
But here's what I want you to understand: Having your contract professionally reviewed isn't about making changes or being difficult. It's about understanding exactly what you're signing up for and ensuring it's all okay before you make one of the biggest investments of your life.
That knowledge alone can save you tens of thousands of dollars.
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Thanks for reading, and catch you in the next post 😊
Annelyse
Construction Management | M. Construction Law
