A preliminary agreement is a fantastic way for you as a client to lock in your chosen builder in the initial stages of work for you new build or renovation. There are several reasons these can work well for a client, which I will talk you though. First we will touch on what the agreement is, then how it can help you.
How A Preliminary Agreement Can Help You
What is a Preliminary Agreement?
Preliminary agreements are used by builders to lock you in for the initial stage of your building prep work, including, but not limited to, plans and soil testing. Preliminary agreements are often suggested to clients who have no plans yet, but do have ideas in place for what they would like. They are used by builders to secure a client, with a fixed price for having plans drawn and the preliminary works in order for your home to be ready to be built or the renovation/extension completed.
The agreement and its costs, can include but is not limited to, drawing of plans, soil tests, engineering and council approvals. They are generally drawn up by negotiation between builder and client. Think of them like a pre-contract contract. But how will it help you?
Fixes The Pricing
One of the most important benefits for a client, is the opportunity to fix the price for the above preliminary costings. There will always be costs with the building process, that cannot be anticipated, so fixing prices wherever you can simply makes sense. On pricing, your builder will have been working with their architect, draftperson or building designer for some time and will know who much this process will cost, adding in costs for the other negotiated services, they will have a price, that can be quoted. Again, I recommend as always, that this is compared with other builders.
Opportunity To Work With Your Builder
Preliminary agreements allow you and the builder the opportunity to work together on your project prior to investing great sums of money with them. For you build to be successful, you and your builder will need to be able to communicate effectively, even in times of great stress.
Working together during your prelim agreement stage will allow you the chance to ensure your builder is able to hear you. We can all listen, but it is a rare gift to find someone who really hears you. Hearing what you are saying is essential for effective communication and ensuring your project is completed to your ideas.
Letting Go Of The Stuff
Another great benefit to a preliminary agreement, is you the client being able to let go of all the stuff that is involved with the initial stages, freeing up your time for dreaming and assisting in the creation of your dream plans. Good builders can effectively and seamlessly negotiate the waters for you.
It Doesn’t Lock In The Build
One frequently asked question, is whether signing a preliminary agreement locks in the builder for the entire process, the short answer is no. As always, we recommend that you have your plans quoted on by several builders, the preliminary agreement does not take this option away from you. The prelim agreement is completed prior to the quoting stage, allowing plenty of scope for the builder of your choice to begin the project.
If you have decided you can’t work with your builder during this time, it is all said and done once the obligation agree to are completed.
A Word Of Warning
Not all preliminary agreements are alike, for example some agreements provide for the builder to keep the plans at the end of the process, not the client. It is essential that prior to signing the agreement, you discuss the ownership of the completed plans, and ensure that all is clear on the agreement. We always ensure that a special condition is noted, that the plans belong to the client only.
As with anything, preliminary agreements won’t work for everyone, however with a clear understanding, they can be very beneficial to you the client.
Have you used a preliminary agreement? Are you going to build, renovate or extend this year?