Building Your First Home – What You Need to be Aware Of

Building your first home is always a very exciting project. We bet you've already had all the various things you want to do with your home to make it super beautiful. Emotion will come a lot into it which should be the right way to go. You will want to make sure the house you'll be living in for some time, is the best one it can be, and contain all the things you really love.

Basically, your home is what you make it to be!

What we will be sharing in this post are the various things you need to be aware of to ensure you get the best value out of your building process, and that, you can save a lot of headache down the track. For us, putting the investor hat on is still important.

These are the things that we think you need to be mindful of:

On the Land

• Land price, ensure you're not paying overprice for it. Most of the first-homeowners area will be in an estate or some sort. Often these estates price are not negotiable, but there is nothing wrong in asking the agent and see if they would entertain some form of negotiations. Check the land price around the area to ensure you're paying competitive price for the same land size (sqm).
• The benefit of buying in an estate is often you will save in site works since the land has been retained, flattened and cleaned up (NOTE: Check with the land agent if it's the case). You'll often also get the color bond fencing. The downside of course is price, often you pay at least $30-50k more than a normal land. Living in an estate is also quieter and surrounded with nicer houses.
• Go and check if the location you're interested in buying is close to amenities such as bus stops, train station, etc. You may eventually be moving out to a bigger house, closer to CBD, and decide to rent your house out. All these extra features will help you in getting tenants with a potential higher rent price. Also, resale value maybe higher also should you decide to sell.

On the Build

• Go and check out display houses and see what features you like such as high ceiling, down lights, timber decking, etc.
• Go and check out display houses' layout and see what house layout you like. A nice layout is an "open plan" with lots of lights coming into the house. Bedroom sizes are also important.
• Go find quotes from various vendors for installing particular features you like such as timber decking, blinds, carpets, etc. Get this info upfront so you're not up for a rude awakening.

On the Builder

• When finding a builder, do NOT sign with them too quickly! Show them the land you're interested in and ask the ball park figure of the building cost inclusive of site works. Get them to draw a house plan and check all these prior signing to ensure you're happy with the house plan.
• Ask for as many inclusions as you can have from the builder and if they can add it to their base price. Do NOT wait until pre-start for all these extra inclusions because the charge can be pretty high. Pre-start is the process where, after you sign the building contract, you would then come in to determine the colors and other features you want to include. This is then used to finalise your final product. It would be nice if you can negotiate as many features as possible before pre-start just so you can save a bit more money. One of our readers get a $5k discount prior to pre-start which he can now use the money to add even more add-on.
• Anything you sign will more-or-less bind you to the builder. And even if you're not yet fully bound legally (ie. maybe you just sign the inital Preliminary Works Agreement - PWA which you paid the initial deposit for), should you try to change builder, they may often give you a hard time and try to intimidate you to keep staying with them. This is why, to avoid all these potential headache, sign only when you're happy to go with a particular builder.
• Get the builder to fix the site works cost whenever possible. Builder often includes a "provisional sum" where a certain amount/budget is added to cater for site works. However, there is no guarantee that this will not blow up. So tread carefully! Whenever possible, ask them to put it in writing that site works will be fixed cost.
• Find reviews online about a particular builder you want to go ahead with, and check the feedback given to them by the customers on their latest builds.
• Don't get too caught up with the nice sales person. That's what they're for, that is to influence you, to make you feel confident to sign with them. But, your result is actually determined by the site manager and the trade persons they use on the day of building. This is why you need to do your own research. Maybe worth visiting few houses they built previously and check if you're happy with the quality.
• Ask for the builder's warranty policy.
• Ask if builder will provide any incentives from delays. Some builders will actually pay you money eg. $300/week if their building schedule is delayed by more than 6 weeks.
• Always check the fine prints and all the out-clauses of the contract presented to you. Worth getting a legal adviser to read over your contract.

Conclusion

Basically, try to get as much information as possible regarding cost, upfront! Do NOT wait until pre-start before you find these out because it may have been too late by that stage and you can only add more costs. This is how you mitigate risks.

Find a reputable builder and do not sign too quickly. Every builder wants your business, so the control is actually with you. But, as soon as you sign, the control is with them, and this is not something that you want to happen unless you're very sure and happy to go with them.

Enjoy your first home!

Tommy Segoro - Principal Consultant of Easy Buyer's Agent

M: 0404 457 754 E: [email protected] W: https://easybuyer.com.au