13 Mistakes People Make When Building a New Home

Building a new home can be a complex process, and there are many ways buyers can get caught out. Knowing the most common mistakes when building a new home before you start can save you money, time and stress. Here are 13 important lessons we’ve seen across the Gold Coast and Brisbane.

13 mistakes when building a new home

1. Sales reps under-estimating site works costs
Site works costs are estimated by the builder before you sign your contract, and this is generally referred to as a Provisional Sum item. Unfortunately, some sales reps in the industry under-estimate the site works costs to reduce the overall price and win the deal. After the contract is signed, the site works get quoted properly and the buyer finds out they have to pay thousands more than allowed. Always ask for a detailed breakdown of the site works provisional sum and get a second opinion if you have any doubts.

2. Unrealistic construction time-frames
Many big building companies overwork their supervisors, often stretching them to manage 30-40 builds at one time. The result is supervisors who haven’t enough time to effectively control quality and manage trades. This leads to projects blowing out well beyond the 5 or 6 months promised by the sales rep. Ask about build times, how many projects the supervisor will be handling and ask for client references.

3. Misunderstanding dimensions on plans
Floor plan dimensions and areas can be calculated in different ways, and builders often indicate floor areas to make their design seem larger than a competitor’s. Room dimensions can be taken from the middle or edge of the wall, and total dimensions may or may not include the areas under the eaves. All this makes fair comparison between designs difficult, so check how each builder measures.

4. Not shopping around for finance
People shop around for the right builder but often don’t shop around for a good mortgage broker. Some lenders are more cost effective for you than others, and brokers have access to many different lenders. Speak to your bank and a couple of brokers to get an idea of the range of finance solutions available to you.

5. Assuming ‘turnkey’ means everything is included
A true ‘turnkey’ house package should be ready to rent or live in, including a TV antenna, clothesline, floor coverings, wall paint, window treatments and rear landscaping. Some companies advertise a product as turnkey without all of these items. Ask for a breakdown of all inclusions and make sure everything you need is listed.

6. Not understanding the area you’re buying in
Choosing a location with poor growth and rental yields will affect your return when you sell or rent it out. CoreLogic is a good, unbiased source of information. Take the time to study the median weekly rent, rental yields and growth of the suburb you’re considering.

Budget mistakes when building a new home

7. Over-spending on fittings
Don’t be tempted to spend more on the fit-out than is really necessary. Think like an investor and only upgrade items that add to the value of the property, make the house more durable or increase the rental value.

8. Comparing apples with oranges
It’s difficult to compare houses from different builders to determine which is better value. Quotes differ in specifications, materials, construction methods and roof framing. Compare like for like where you can, then pick a design you like within your budget that ticks as many boxes as possible. Our On the House Inclusions list exactly what’s standard so comparisons are easier.

9. Missing what display home prices leave out
When visiting display homes, ask what the displayed price does and does not include. The floors, wall paint, air-conditioning and high ceilings may be extra. Pay particular attention to the specification sheet and don’t be shy to ask for a total price.

10. Getting emotionally attached to an investment property
We often see buyers wanting to over-spend on fittings, appliances, structural changes and upgrades for an investment property. Keep upgrades limited to those that add value or increase rental yield.

11. Making expensive structural changes late
Making changes to a standard house design can cost a premium in drafting and construction. The best way to keep cost down is to settle your design early, so you’re not paying to change it once drawings and approvals are underway. A Built To Requirement™ home is designed around your needs from the start for exactly this reason.

12. Missing developer bonus items
In some new land estates, developers include items such as landscaping, fencing, solar rebates or rebates on the price of the lot. It pays to research the estates in your area to see what’s on offer.

13. Not planning owner-managed items
Builders charge a margin on materials and trades. You could save by organising your own painting, landscaping, flooring or blinds. Keep in mind these can usually only be done after handover, so your home will take longer to be ready to live in.

Avoid these mistakes with an early feasibility check

Many of the most costly mistakes when building a new home come from not understanding the full cost and site requirements early. Our complimentary Core Feasibility Assessment reviews your block, plans or ideas and inclusions, then gives you an estimated investment range and next steps before you commit.

Source: by Zoe Langenberg