Preliminary Building Agreements Explained: What It Is & Why You Need It

preliminary building agreements explained what it is why you need it
By Jim Pitcher | June 5, 2021

Do you know what a preliminary building agreement is and why it is so important to have one before you sign a contract with a builder?

When you work with a builder who doesn’t use preliminary building agreements, you run the risk of an unorganized building process resulting in defects, delays, and conflict.

Professional builders use preliminary building agreements to simplify the process for you. They are a ‘done for you’ solution that makes the construction process of your new home faster and easier for you and the builder.

In a study completed by KMPG, more than 75% of building projects exceeded their original deadlines, and over 69% exceeded their budget. But, by going into a preliminary building agreement with your builder before a contract is signed, you can rest assured that your builder can provide you with a fixed price and a guaranteed handover date.

Preliminary building agreements allow the builder to go the extra mile before construction, so when it comes to signing the contract, you can be sure that the price and the handover date won’t change.

The Team Approach Saves You Money & Stress

preliminary building agreements explained what it is why you need itA lot of consumers believe that it’s them and their architect against the builder. But the truth is that when you work with a professional builder, it’s a team approach.

You, the architect, and the builder all work together to determine the expectations for your new home to then create a preliminary agreement to set everything in motion before a building contract is signed. This approach simplifies the process for you, so you only have one point of contact, and all the pre-construction details and planning are done for you. While average builders will send you in all directions to do these things for yourself.

Preliminary Building Agreements Explained

So, what exactly is a preliminary building agreement?

It’s a pre-contract agreement, sometimes referred to as a ‘prelim’ or a ‘PBA’. It’s the phase of the process after you’ve chosen, and met with, your builder, and after you’ve decided on the concepts for your new home.

A preliminary building agreement allows your builder to carefully and systematically work through the details of the construction of your new home. So they can provide you with a fixed price and guaranteed handover date when it comes time to sign the building contract.

What’s Included In A Preliminary Building Agreement

preliminary building agreements explained what it is why you need itThe inclusions of a preliminary building agreement can vary, depending on the builder you work with. But they will typically include the necessary arrangements and testing that need to be completed before construction.

In the preliminary building agreement phase, builders will organize for engineering and soil tests to be completed on your land. They’ll finalize the concepts of your new home and transform them into construction drawings. When they have these details finalized, they’ll create scope of works and job schedules for your entire project. They’ll also work with you to complete all the selections of finishes and colors for your new home.

The preliminary building agreement also allows builders to make the necessary arrangements for building and development approvals. By completing all of this work early, your builder can provide a detailed building contract that includes everything that will need to happen to build your dream home. Meaning they can give you a fixed-price contract with a guaranteed handover date so you can be confident your new home will be built on budget and without any unexpected delays.

It doesn’t matter if you are building your first home or if you have built many times before… Designing a new home can be very overwhelming, and when you hear new things for the first time, it’s not easy to remember everything.

Everything we’ve covered here is just a small sample of the information we can share with you to ensure you are well informed when you get started on the design process… So we’ve put together a quick guide for you to download. It’s completely free, and it will help you to keep your design on budget and avoid any nasty surprises that can sneak up on you when building a custom home.

Just click on the link below to download it now.

seven things you must know before designing a new home-CRC Builders Inc.