BUILDING a new home delivers buyers the freedom to choose everything, but also the chance to be caught out by costly extras.
Understanding the potential financial pitfalls is the first step in making it a memorable experience for the right reasons.
People’s Choice Credit Union chief executive officer Steve Laidlaw says the most important thing to do is “research everything and seek advice”, and always understand your options.
“It can seem like a lot of work but it’s far better to spend some extra time and a little money making sure you get things right the first time, rather than having to correct or live with mistakes,” he says.
Laidlaw says when choosing a location, narrow it down to two or three suburbs that suit your budget, lifestyle needs, schools, work, transport and shops.
“Look at zoning requirements and encumbrances which could seriously affect your plans,” he says.
Mark Hodgson and Cyra Alconaba saved money with a bit of DIY.
Mark Hodgson and Cyra Alconaba saved money with a bit of DIY.Source:News Limited
Mark Hodgson and partner Cyra Alconaba say their recent building experience went smoothly after they asked multiple questions right at the start.
The couple spent several months shopping at midyear and Christmas sales buying items for their new home.
“You can save a heap of money by doing some things yourself after handover. We did the airconditioning and tiling of the main living areas after handover,” says Hodgson, 25.
Real estate author, investor and university lecturer Peter Koulizos recommends choosing a level block.
“If it’s not level, you will have to do some cut and fill, which will cost extra but doesn’t put any extra value on the property at the end,” he says.
As a very general view, a block that slopes more than 1m from front to back will cost anything from $10,000 to level, “and increase exponentially depending on the slope of the block,” Koulizos says.
Bargain hard for a fixed price, and also a fixed building time.
Bargain hard for a fixed price, and also a fixed building time.Source:AP
Signing a fixed price contract is another way to avoid cost blowouts, he says. “Builders will try to avoid that — they love cost-plus contracts so there’s no pressure to keep costs below a certain level.”
Bargain hard for a fixed price, and also a fixed building time.
Koulizos says time is money, and the longer you wait for a home to be built the more rent you are paying living somewhere else and the more interest you pay on the new property’s mortgage.
Laidlaw says even with fixed price contracts you should make sure your budget has some leeway from the start.
“The one thing you can almost certainly be sure of is there may be unexpected costs somewhere along the line when building a home,” he says.
“New build contracts can be complex documents and, like all contracts, need to be looked at carefully before signing on the dotted line.
“Some of the big ticket items that can break the bank and might not be costed for include variations to the footings, excess soil removal, service connections and landscaping.”