Why people spend more than they should on their new home build (and how to avoid it)
Written By Annelyse Stead | Australian Home Building & Renovation Contract Specialist | M. Construction Law | B.Construction ManagementHere's something most people don't realise until it's too late: the money you lose on your new home build isn't lost during construction - it's lost the moment you sign your building contract.
You've spent months researching floor plans, choosing finishes, and getting excited about your dream home. Your builder seems trustworthy. The quote looks reasonable. So you sign on the dotted line, confident you've done your homework.
Then, three months into your build, the variations start appearing. The "allowances" turn out to cover far less than you thought. Delays stretch your timeline andyou have to pay extra rent due to delays - for months. By the time you move in, you've spent $20,000, $30,000, sometimes $50,000 more than your original budget.
What if I told you this is almost entirely preventable?
That's exactly what a building contract consultant does—and why investing in one before you sign can save you tens of thousands of dollars on your build.
1. We catch hidden costs before they become your problem
The biggest fear new home builders have? Hidden costs and exclusions popping up after the contract is signed.
And here's the thing: it's a completely justified fear. Because most building contracts are designed to protect the builder, not you.
Here's what typically happens:
Your contract includes an "allowance" of $15,000 for kitchen joinery. Sounds reasonable, right? But what the contract doesn't make clear is that $15,000 only covers what you saw in the display home.
When you select your actual kitchen, you discover you need to pay an extra $8,000 as a variation. Plus another $2,500 for stone benchtops instead of laminate. Plus $1,200 for undermount sinks instead of drop-in.
Suddenly, that "$15,000 allowance" has cost you $26,700.
Real example: A couple in Brisbane came to me after receiving their first variation request - $12,000 for electrical upgrades they assumed were included. When we reviewed their original contract, we found that the "electrical allowance" only covered the minimum required by building code. Everything they actually wanted—data points, extra power outlets, outdoor power, ceiling fans—was extra.
If they'd had me review the contract before signing, we could have negotiated these inclusions upfront, likely for $7,000-$8,000 instead of $12,000 as a variation.
What a building contract consultant does:
I go through your contract line by line and identify every allowance, provisional sum, and exclusion. Then I translate what these actually mean in real terms - what you're getting, what you're not getting, and what it will cost to upgrade to what you actually want.
This way, you can:
Negotiate inclusions before signing, when you have the most leverage
Budget accurately for the home you actually want, not the base specification
Avoid the shock of variations that blow your budget mid-build
The savings: On average, clients who have their contract reviewed before signing save $15,000-$25,000 by avoiding unnecessary variations and negotiating better inclusions upfront.
2. We keep your build on budget by making your contract work for you
Understanding your contract isn't just about knowing what's included—it's about knowing how to use your contract to protect your budget throughout the build.
Most people think their building contract is just a list of what the builder will deliver. But a well-structured contract is actually a tool you can use to control costs, manage variations, and ensure value for money.
Here's what I mean:
Let's say your builder comes to you mid-build with a variation for $8,500. They explain that the soil conditions require additional footings. You assume this is unavoidable and sign.
But if you'd had a professional review of your contract, you'd know that the builder is responsible for "normal site conditions" and can only charge for "abnormal conditions"
Armed with this knowledge, you question the variation. The builder produces the report—which shows the soil conditions are within the normal range for your area. You negotiate the variation down to $3,200.
That's $5,300 saved, simply by understanding your contract.
Real example: A client in Melbourne was quoted $22,000 for electrical variations. When we reviewed the variation against their contract, we discovered that 60% of the "upgrades" were actually standard inclusions that should have been in the original scope. The builder had incorrectly itemised them as extras.
We negotiated the variation down to $8,800 - a saving of $13,200.
What a building contract consultant does:
I help you understand your contract's variation clause, prime cost and provisional sum provisions, and dispute resolution processes. Then I give you practical strategies for:
Evaluating whether a variation is justified or negotiable
Ensuring variations are priced fairly (not inflated)
Identifying red flags in variation pricing
Using your contract to push back on unnecessary costs
The savings: Clients typically save $10,000-$20,000 by avoiding inflated or unjustified variations throughout their build.
3. We prevent delays that add up to thousands in extra costs
Here's something most people don't realise: construction delays don't just push back your move-in date—they cost you real money.
Every week your build is delayed means:
Extra rent on your current home
Extended bridging finance interest
Storage costs for your furniture
Temporary accommodation if you've already sold your previous home
For most families, this works out to $800-$1,500 per week in delay costs.
A four-month delay (which is not uncommon) can cost you $12,000-$24,000 in additional expenses.
But here's what's frustrating: many delays are preventable, or at least partially the builder's responsibility—but you won't know this unless you understand your contract's time provisions.
Here's what typically happens:
Your builder tells you your build will take 8 months. Six months in, they inform you that the build will actually take 12 months due to "unforeseen delays." You assume this is just part of building and accept it.
But if you'd had a consultant review your contract, you'd know that:
Your contract has a practical completion date with specific extension of time provisions
The builder can only claim extensions for specific reasons (weather delays, variations you requested, supply delays beyond their control)
The builder is required to provide formal notice of delays within specific timeframes
You may be entitled to liquidated damages for delays that are the builder's fault
Real example: A couple in Sydney were told their build would be delayed by 10 weeks due to "supply chain issues." The delay would cost them $12,000 in additional rent.
When we reviewed their contract and the builder's delay notices, we discovered:
The builder had failed to order materials on time (not a supply chain issue)
The builder hadn't provided formal notice of the delay as required by the contract
The contract entitled them to liquidated damages of $200 per day for builder-caused delays
We negotiated a settlement where the builder covered $8,000 of their additional rent costs.
What a building contract consultant does:
I help you understand your contract's time provisions, extension of time clauses, and liquidated damages provisions. Then I give you practical tools for:
Monitoring your build's progress against the contracted timeline
Identifying when delays are the builder's responsibility vs. legitimate extensions
Ensuring the builder provides proper notice and documentation for delays
Negotiating compensation when delays cost you money
The savings: Clients typically save $5,000-$15,000 by minimising delays and negotiating compensation for builder-caused delays.
The real cost of not getting your contract reviewed
Let's add this up:
Hidden costs and variations: $15,000-$25,000
Inflated or unjustified variations: $10,000-$20,000
Delay costs: $5,000-$15,000
Total potential savings: $30,000-$60,000
And that's just the direct financial savings. The indirect benefits—reduced stress, better relationships with your builder, confidence in your decisions—are harder to quantify but equally valuable.
What you get in a Building Contract Health Check
My Building Contract Health Check is a fast turnaround deep dive into your building contract before you sign.
Here's what we cover:
Line-by-line review of all allowances, provisional sums, and exclusions—and what they actually mean in real terms
Identification of hidden costs and unfair clauses that could blow your budget
Analysis of your variation clause and how to use it to control costs
Review of time provisions and your rights regarding delays
Assessment of payment schedules and whether they're fair
Evaluation of warranty and defect clauses
Specific clauses that need to be negotiated before you sign
Practical strategies for managing your build and using your contract to protect your interests
By the end of our session, you'll know:
Whether your contract adequately protects your interests
What red flags to watch for in your builder's terms
Exactly what clauses need to be negotiated before you sign
How to structure payments to protect your budget
Your rights regarding variations, delays, and quality issues
Real results: In the past year alone, I've helped clients across Victoria, NSW, Queensland, ACT, Tasmania, Western Australia, and the Northern Territory avoid costly contract issues and build with confidence.
The average client saves $30,000+ by catching issues before signing—a return of 30-60x the cost of the Health Check.
"The best investment is the one that prevents a loss."
Building your dream home shouldn't come with surprise costs, inflated variations, or budget blow-outs. With the right support before you sign, you can avoid the costly mistakes that plague most new home builds.
Ready to protect your build budget?
Book your Building Contract Health Check today.
I've helped hundreds of families across Australia save tens of thousands on their builds.
Thanks for reading, and catch you in the next post 😊
Annelyse
Construction Management | M. Construction Law
