It’s the great Australian dream to build a house from the ground up, but the process of construction is unknown by most.
If you equip yourself with the right information it can be an exciting process, even life changing. Most home owners agree on one thing… careful planning beforehand is essential.
Get your plan in place
Planning is the most important part of the construction process.
Make sure you ask yourself these important questions:
- What direction will it face on the lot?
- What will the layout and flow of the rooms be?
- What kind of lighting will you use and how many power points will you install? (Tip: you always need more than you think.)
You can also keep track of design ideas that inspire you which you’d like to include. Think about starting a Pinterest board for each room of your house to file away examples of your favourite designs.
As well as helping you plan, they’ll be a great point of reference to show your Builders once construction is underway.
Budget more than you expect
No matter how much you think the building process is going to cost, it’s likely to cost you more.
There could be any number of items that aren’t included in you builder’s estimate.
For example, your Builder is unlikely to include costs such as electrical and gas metres, NBN hook-ups or window coverings. Items such as landscaping and outdoor concreting, fences and gates, decking and letterboxes may not be included in the estimate.
These are known as finishing costs and could run anywhere from 15-25 per cent of your budget.
You’ll also need to account for site costs, which are the costs associated with preparing the land for construction, and you may have to pay for planning application fees.
Pick the right builder
This is one of the most important decisions you’ll make in the home building process. Whichever Builder you choose, you’re going to be working with them for many months.
Careful selection from the outset can help you to avoid future problems.
Here are some factors to consider when choosing a Builder:
- Credentials: Make sure your Builder is adequately licensed and insured and if they are a member of Master Builders or the Housing Industry Association (HIA)
- References: Check the Builder’s past work. Were previous clients satisfied? Don’t be afraid to ask the Builder for references before you sign a contract. Contact the Department of Fair Trading to ensure there are no complaints against the Builder you choose. Also ask what warranty and service they offer.
- Past work: Have a close look at some of the houses the Builder has constructed in the past. Make sure the level of quality is high. Also, look into resale data on some of the houses the Builder has previously constructed
- Style: In looking into the Builder’s past work, see that it suits your design style. A Builder might be very accomplished at constructing a particular style of home, but if what you want is outside their area of expertise you might be wise to look elsewhere
- Personality: As mentioned, you’ll be working with your Builder for a number of months. Make sure you’re comfortable with them and their communication style. If a Builder doesn’t communicate well with you, it’s likely they don’t communicate well with their contractors either
Understand your agreement
Read through the contract with your Builder to make sure you understand the contents in full. Make sure you’re not taken by surprise by what the construction costs cover and what they don’t.
Check the cooling off period specifies a time frame for construction that suits your needs. Ensure it includes detailed plans, warranty and insurance information. Also pay close attention to the payment schedule.
Finally, it’s wise to have a Solicitor look over the contract before you sign it. Cross out any blank spaces and make sure any variations to the contract are well documented and mutually agreed upon.
Know what you’re entitled to
If you’re building your first home, you could be entitled to a First Home Owner Grant (FHOG), dependent on the state or territory in which you live.
This could substantially offset the cost of your home. To find out if you might be eligible, visit the Australian Government’s website on the First Home Buyers Grant.
Depending on your state or territory, you might also be eligible for stamp duty concessions on the purchase of your building lot.
This Stamp Duty Calculator provides an indication of Government costs when purchasing a property in Australia as a first home or previous home owner or as a property investor.
See if you are eligible for any grants, concessions or exemptions.
Get your financing in order
When you’re building a property, you’ll need a construction home loan to finance the process.
A construction home loan is structured differently than a regular home loan in that the lender won’t release all the funds at once.
Instead, the lender will decide how much you need for the project and will then release the funds in periodic payments to your Builder.
These periodic payments are known as ‘draws’. They’ll be paid out at the completion of each individual stage of your construction.
Communicate constantly
Throughout the process, communicate often with your Builder and Tradesmen. Get regular updates on the progress of construction and check in yourself. It’s a good idea to take pictures of the progress on a regular basis so you can document any problem areas.
Don’t be afraid to stick to your guns. If your Builder, Contractor or Tradesmen tell you something can’t be done, push back.
It might cost you extra, but odds are with the right amount of effort you can accomplish your vision. It’s worth putting up a fight for details that are important to you.
After all, you’re the one who has to live in the completed home.
With good communication you should be able to avoid arguments during the building process. If you’ve clearly laid out what you want and the non-negotiable details, construction will run much smoother.
Look for ways to save
Building a home is going to be an expensive process and it’s likely you’ll end up paying more than you anticipated.
That being said, there are ways you can save money.
Shop around for the best prices on fittings and fixtures and on the materials your Builder will use. Get multiple quotes for any item needed during the construction process.
Congratulations!
Your new home is complete and all that is left now is for the final inspection, which will be completed by your local Council’s Building Inspector.
Remember to protect your new investment
Property is usually the single largest investment you will make in your lifetime.
BMT Insurance works with some of Australia’s most experienced providers to select suitable and cost effective insurance for you. Let BMT find the house, contents or landlord insurance that works best for you and your investment.
