Why variations blow out your budget (and how your contract can stop them)
Written By Build Together Project Management
You've done everything right.
You've picked a great builder. You've locked in a fixed price contract. You've signed on the dotted line feeling confident that your budget is safe.
Then halfway through the build, the variations start rolling in. $2,000 here. $5,000 there. Before you know it, you're $30,000 over budget and wondering what went wrong.
Here's what most people think: variations are just part of building. They're unpredictable. You can't really control them.
But here's what's actually true: most variation blowouts aren't caused by bad luck or difficult builders. They're caused by contracts that don't protect you.
The false assumption about variations
Most homeowners assume that a fixed price contract means a fixed price. They think that if something goes wrong or costs more than expected, that's the builder's problem to solve.
But your contract probably says something very different.
I've reviewed hundreds of building contracts, and nearly all of them include clauses that allow the builder to charge you extra for things like:
Materials that become unavailable (even if it's a common product)
Changes to the scope of work (even tiny ones)
Provisional sums that end up costing more than estimated
Extra permit fees or council requirements
The problem isn't that these clauses exist. It's that most people don't know they're there, so they can't prepare for them.
What really causes variation blowouts
I worked with a client named Sarah who was building her second home. She'd been through a build before, so she thought she knew what to expect. She chose materials early, stayed organised, and tried not to change her mind.
But three months into the build, the variations started. Her builder said the tiles she'd chosen were unavailable and the alternative cost $4,000 more. Then they hit rock during excavation, another $6,000. Then the window supplier changed their pricing, another $3,500.
Sarah felt trapped. She didn't want to make waves with her builder. She assumed these costs were legitimate because they were in the contract.
When she came to me, we went through her contract together. And here's what we found:
The clause about unavailable materials didn't require the builder to offer alternatives at the same price point
The excavation clause allowed charges for any "unforeseen ground conditions" without defining what that meant
The window pricing wasn't locked in, even though she'd selected and approved everything months earlier
These weren't unusual clauses. They're standard in most building contracts. But they were costing Sarah thousands because she didn't know they were there.
The contract details that actually protect you
Once we understood what was in Sarah's contract, we could do something about it. We went back to the builder with specific questions about each variation, referencing the exact contract clauses. We asked for proof that materials were unavailable. We challenged costs that seemed inflated.
The result? We reduced her variation costs by over $8,000. Not because we were difficult or unreasonable, but because we knew what the contract actually said and what the builder could legitimately charge for.
Here's what most people miss: your contract doesn't just say what you're building. It says who pays when things change, what counts as a legitimate extra cost, and how much control you have over the process.
A quality build comes from a quality contract. Not because the contract prevents things from going wrong, but because it protects you when they do.
What to look for before you sign
Most people focus on the wrong things when reviewing a building contract. They check that the plans are attached and the price looks right. But the clauses that will actually affect your build are buried in the terms and conditions.
The details that matter:
Does your contract require the builder to prove materials are genuinely unavailable before charging you for alternatives?
Are provisional sums clearly defined with realistic estimates, or are they vague placeholders that could blow out?
Does the contract lock in pricing for materials once you've made selections, or can suppliers change prices mid build?
What exactly counts as a "change to scope" that triggers a variation? Is it only major design changes, or could it include tiny adjustments?
Are there limits on how much the builder can charge for project management or administration of variations?
These aren't things you'd naturally know to look for. But they're the difference between a build that stays on budget and one that costs you tens of thousands more than expected.
Why "industry standard" contracts still need checking
I hear this all the time: "It's just a standard contract. There's nothing we can change."
But standard doesn't mean safe. Every builder uses slightly different contract templates, and the details vary wildly. One builder's contract might give you strong protections against variation costs. Another might leave you completely exposed.
The risk isn't the template. It's the details.
And here's the thing: most builders aren't trying to rip you off. They're using the same contracts they always use, and they genuinely don't realise how exposed their clients are. When you ask informed questions about specific clauses, most builders are happy to discuss them or even adjust them.
But you have to know what to ask for. And you have to ask before you sign.
What this means for your build
Understanding your building contract is a superpower. Not because it lets you avoid variations completely (some are genuinely unavoidable), but because it puts you in control.
When you know exactly what your contract says about variations, you can:
Budget realistically for the costs that might come up
Push back on charges that aren't legitimate
Have confident conversations with your builder about what's fair
Avoid the sick feeling of watching your budget disappear month after month
The clients I work with don't necessarily have fewer variations than other people. But they're not blindsided by them. They know what's coming, they're prepared for it, and they don't overpay.
That's what a proper contract review gives you: not a perfect build, but a protected one.
Get your contract checked before you sign
If you're about to sign a building contract, now is the time to understand what you're agreeing to. Not after the build starts and the variations start rolling in.
A Building Contract Health Check will show you exactly where your contract allows for price increases, which clauses protect you from hidden costs, and what you need to negotiate before signing.
You'll walk away knowing:
The real risks in your specific contract (not generic advice)
Which clauses could cost you thousands if left unchanged
Exactly what to ask your builder to revise
How to spot variations that aren't legitimate
I've reviewed hundreds of contracts and helped clients save tens of thousands by catching issues before they became expensive problems.
Protect your dream build with a Building Contract Health Check:
Avoid budget blowouts before they happen
Lock in quality control processes
Save your future self a huge amount of stress
Save thousands by spotting the hidden risks first.
