Buying your land is only part of the journey, where it really begins is with the building of your own home. It can be one of the most satisfying times of your life or it can be filled with much regret and sorrow. So how do we adequately prepare ourselves and make sure the process is rewarding, stress-free and above all worthwhile regardless of whether you are an investor, first home buyer or an upgrader?
Know your budget and stick to it. If you are over budget, look at items you can do without for now and that you can add back in later. There may be ways where we can increase your affordability by lowering your cashflow or using a different loan structure. We want you to be in the home for a long time and this can only be done if it’s affordable.
Don’t be afraid to ask even the simplest of questions, as silly as it may seem. A good and experienced builder will be able to answer in a clear, informed and honest manner that does not over complicate the issue. Far better for an issue to be identified early than to cost dollars and time to remedy later.
Often it’s not about price, look at a display home or if there isn’t one available, ask to view a home that is towards the final stages so you can see the quality and level of finish. Remember display homes are meant to look beautiful and dazzling so make sure the same quality of finish applies to your build.
Fixed Price Contract
If your contract is not fixed price (especially if rock removal is required), allow for variances and blow outs. If the builder advises the contract is a fixed price contract read the fine print carefully.
As much as the first display home seemed perfect, you will be surprised at what else is out there. Get a few quotes and don’t rely on only one. If there are large variances ask the builder to requote with a better price or to justify the expense.
Ask the builder for previous customers who have built with the builder and call them to gauge their experiences and quality of build. If you feel a little awkward, drive by current projects of the builder.
Qualifications & Insurance
Your builder must have all the necessary qualifications and insurance policies (public liability, builder warranty & indemnity) to carry out construction work.
We recommend at the stage you are ready to consider finding your builder to organise the finance. It’s vitally important we look at obtaining a pre-approval with a carefully researched bank for the following reasons:
- Borrowing capacity – knowing how much you can lend will allow you to work within your budget.
- Repayments – is your construction going to be affordable?
- How much deposit do I and should I put in? This will be different for everyone but there are some additional discounts with banks for larger deposits but make sure you allow for repayments through the build process and a buffer.
- Can I build in the area where I have land and will the bank lend the money to me? Some banks have restrictions in certain postcodes and can limit the maximum loan amounts in areas regardless of your borrowing capacity.
- Do I need the bank to factor in additional invoices for works outside of the building contract? Did you know it’s very rare for banks to accept additional works as part of the home loan application and take these into consideration when valuing your build?