Building a new home or renovation can be a complex process and there are many ways that buyers can get caught out. Here are 7 important lessons that will save you money and stress.
1. Sales reps under-estimating site works costs
When you are dealing with larger building companies, you may be dealing with sales reps who are focussed on making the sale. This may mean at times the costs are underestimated so they can get you to sign. After the sales contract is signed, the job will get priced considering the actual site conditions and you may find that the real price is thousands of dollars more than the provisional quote. Working with a mid-sized builder directly often bypasses this as the owner is very focussed on getting the numbers correct up front as quoting mistakes costs the individual business owner thousands.
2. On-time delivery
Large building companies work on a massive volume basis so may have one site supervisor managing up to 40 houses at the same time. This may mean the quality may suffer and the timeframes may also go well beyond your expectations or your understanding. If you are dealing directly with the owner, you can ask to be introduced to the actual supervisor managing your home’s construction or even ask that the owner himself be responsible for your home.
3. Shop around for finance
People shop around when looking for the right builder but they don’t shop around for a good mortgage broker. There are many ways to secure a home loan, and some lenders are more cost effective for you than others. Mortgage brokers have access to many different lenders, so it is worth speaking to your bank and a couple of brokers to get an idea of the range of finance solutions that are available to you. Experienced Builders should be able to recommend a successful broker to assist you establish a budget.
4. Know what you are getting
If you are buying a fully completed home or a ‘turn key’ solution, make sure you understand exactly what’s included. For example is there a clothesline, driveway, landscaping, etc. Ask for a very detailed list of what’s included in the quote.
5. Over or under capitalising
Ensure your builder is an expert in the area you are building. Getting an inexperienced builder or a builder that does not specialise in your project type to quote on your job will most likely lead you to over-capitalise or spend too much on items like fixtures and fittings. This usually results in a disproportionate increase in value compared to how much you spend on your home. Choose builders based on their localities of expertise!
6. Bang for your buck
Speak to the builder about the benefit of making structural changes and whether they are required or will be valued by prospective purchasers or bank. Often cosmetic upgrades increase the value of the home much more than structural improvements. Speak to an experienced builder who has helped clients many times before to make these decisions.
7. A way to make expensive savings
If you are tempted to try and save money by organising the painting, carpets, floors, blinds and even landscaping and not let the builder manage it, be aware that you will be these trades last priority. Their priority will be to builders who give them ongoing work rather than a client that will only use them on a single project. Also, if there are quality, delivery, installation, performance or warranty issues are you able and willing to manage the whole rectification process or would getting the builder to manage and warranty this process be money well spent?