Signature Homes Stands Behind Its Fixed Price Guarantee

Signature Homes, one of New Zealand’s largest home builders, is confident that even in this volatile market it can offer its clients a Fixed Priced home build.

Working with long-standing suppliers, Signature Homes is able to forecast well in advance, locking in pricing and material orders early to enable price certainty for its clients.

In this period of construction inflation and product shortages, Signature Homes remains committed to offering Fixed Price Contracts, made possible by its strength of supplier relationships, forward planning and the volume of homes it builds each year.

Signature Homes’ Chief Executive Paul Bull says the firm is able to deliver a fixed price despite the current volatility in building product prices due to its long-standing relationships, and daily communications with its suppliers.

“We are one of New Zealand’s largest new home builders with around 950 new homes sold every year. That gives us significant strength in the market and the ability to negotiate fixed prices and a continuous secure supply of all building products,” he says.

Mr Bull says that recent reports that builders cannot commit to fixed prices because they are unable to guarantee a price without risk of business failure are inaccurate and should not apply to volume home builders such as Signature Homes.

Supplies of essential items for building a new home such as roof trusses, exterior cladding, and wallboard are ordered well in advance and shipments arrive at Signature Homes’ building sites around the country every day. In cases where an item is not in supply or delayed, Signature Homes finds a close alternative or alternate work for site crews to maintain build programmes.

“We have been building homes since 1983 and our name is synonymous with quality and continuous improvement. Our Fixed Price Guarantee is part of our commitment to New Zealanders that building a new home should be as painfree as possible,” he says.

Details are provided to clients before they sign documents, but essentially for a House & Land package, where consents, title and groundworks have been completed, the Fixed Price Contract remains the most typical option for a Signature Homes client.

Once final design and plan decisions have been made, the house is costed and a firm and final price is agreed with the customer.

In other cases, where some client decisions are yet to be made – such as kitchen design, client-selected specific options and landscaping etc – a Fixed Price Contract will be offered with a PC Sum Building Agreement which is essentially a thorough cost estimate for the client-driven item or works.

Mr Bull says, “in the last 12-months, only 0.25% of the Signature Homes’ group national turnover has had a PC Sum increase, which has mainly been driven by clients upgrading their selections for better products in their homes. The accuracy of this figure highlights, and is testament to, the suburb work, accuracy and transparency of our networks pricing. Signature Homes takes great pride in representing the true costs our clients can expect to deliver their home.”

A third scenario is a conditional contract. These are written when one or more items such as resource consent, title or finance are not yet confirmed. In these cases the conditional contract will have a time limit and the price for the house construction is guaranteed until a set date. The price of the home might increase if the conditions are not met within the contracted period.

Mr Bull says Signature Homes’ approach is to move clients as quickly as possible from a conditional contract or PC Sum contract to a Fixed Price Contract.

“We want to take the anxiety of the cost away when a customer builds a new home. A fixed price also works in their favour as mortgage lenders will be happier to lend on a fixed price and the client can set their budget for the build and other costs, such as landscaping,” he says.

If costs increase during the build period, the increased cost is absorbed by Signature Homes, not the home owner.

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