When building a new home, one of the critical financial decisions you'll face is choosing between a turnkey contract and progress payments. Each option has its advantages and is suited to different situations. Here is an outline of how turn-key packages and progress payments work at Ultimate Builders so you can decide which is best for your needs.
Turnkey Contracts
A turnkey contract is an agreement where you pay an initial deposit and then remaining amount of funds upon completion of the build. Here's what you need to know about turnkey contracts:
1. Convenience: A turnkey contract means you pay an initial 10% deposit and then nothing until completion of the build, i.e.: once code or compliance has been issued at the end of the build. Turnkey contracts can provide financial certainty and help with budgeting.
2. Fixed Price: Our turnkey packages are still fixed price- covering all construction costs, including finishes, landscaping, and appliances.
3. Involvement: With a turnkey contract, you will still be involved in the construction process including attending a colour consultation to select your colours, attending on site meetings for electrical walk through and landscape meetings as well as receiving fortnightly communication updates.
Progress Payments/ Construction Loan
Progress payments, also known as construction payments, involve paying for the build in instalments at various stages of the construction process. Here are the key points about progress payments:
1. Payment Schedule: Payments are made at predetermined milestones, such as completion of the foundation, framing, roofing, and exterior cladding etc.
2. Potential Savings: Progress payments can sometimes be more cost-effective, as you might avoid the premium charged for the convenience of a turnkey contract.
3. Fixed Price: Our turnkey packages are still fixed price- covering all construction costs, including finishes, landscaping, and appliances.
4. Involvement: With a construction loan you will still be involved in the construction process including attending a colour consultation to select your colours, attending on site meetings for electrical walk through and landscape meetings as well as receiving fortnightly communication updates.
Choosing the Right Option
The choice between turnkey contracts and progress payments depends on your personal circumstances, preferences, and financial situation. Budget and Financial Planning: If you prefer a fixed budget and less financial uncertainty, a turnkey contract might be the best option. If you can manage cash flow and want potentially lower costs, progress payments could be advantageous.
Understanding these differences will help you make an informed decision, ensuring that your home-building experience aligns with your expectations and financial goals.
Disclaimer: The information provided in this blog is intended for general guidance only. We recommend seeking independent financial advice to determine which payment option—turnkey or progress payments—best suits your individual financial situation and needs.
