Most cost overruns on a Broome build are not caused by a builder being dishonest. They are caused by two things that were in the contract from the start: the contract type, and the provisional allowances inside it. If you understand both before you sign, you remove most of the risk.
The contract type does most of the damage
On a cost plus contract you pay the actual cost of the work plus the builder’s margin, and that margin can run up to 15 percent of the total build. It sounds transparent. What it means in practice is that you sign a contract without a final number, and every cost increase between signing and handover lands on you.
A fixed price contract is safer, but only if the builder can afford to hold it. Fixed price protects you from paying more. It does not protect you from a builder who runs out of money and slows down. We have seen a Broome build come in at thirty eight weeks instead of twenty four for exactly that reason, and the owner still paid rent elsewhere for the extra fourteen weeks.
Provisional allowances are the second half of the problem
A provisional allowance is a placeholder figure for something you have not chosen yet. Tiles, taps, benchtops, floor coverings. Every allowance in a contract is a number that is going to change, and it almost always changes upward, because allowances get set low to keep the quote competitive.
Before you sign, ask for a list of every provisional item and the realistic figure rather than the allowance figure. If a builder will not give you that, the quote is not a quote.
We confirm client selections upfront and keep provisional allowances to a minimum, so the final build price stays consistent with the contract price. We call it Not $1 More, and it means the only thing that moves your price is a change you ask for yourself.
Timing decides what a variation costs
Here is the part most people do not know. When you raise a change matters more than what the change is.
Say you want a different shower head. Ask before the plumber’s rough in and you pay the price difference, and that is the end of it. Ask after rough in and the same change triggers an extension of time, a delay of about seven days, a daily delay cost, the plumber’s return visit and a variation fee. Same shower head, completely different invoice.
So make your selections early, and if you are unsure about something, raise it at the start rather than waiting to see how it looks.
The rock clause, and why it survives a fixed price
If rock is found during excavation, removing it is at your cost. This holds even under a fixed price contract, because nobody can price what is under the ground before they dig. It is a legitimate clause and every builder has one. It just should not be the first time you hear about it.
Two other things worth checking
It is illegal in Western Australia for a builder to take a deposit before Home Indemnity Insurance is in place. If anyone asks for money before that cover exists, stop and ask for evidence of the policy.
And know how your construction loan pays out, because it sets the rhythm of the build. Funds release across five stages: slab or base down, frame up, lock up, fit out, and completion.
The short version
Ask what type of contract it is. Ask for the list of provisional allowances with realistic figures. Make your selections before construction starts. Check the rock clause. Confirm Home Indemnity Insurance before you pay anything. That is most of the risk handled.
We build all over the Broome area, from Bilingurr, Cable Beach, Djugun, Minyirr and Old Broome, and we are happy to read a contract from another builder with you before you sign it. Call 0483 961 437.
For the full picture on costs, timelines, contracts and how to check a builder, read Building or Renovating in Broome, The Complete Guide.
