By Greg Balough....The House and Land Company
Building for the very first time?
Not sure exactly what’s involved in buying land and building a home?
TheHLC (The House & Land Company) understands, so here is TheHLC checklist to guide you through all the important things you should consider as you enter into the very exciting time of your first home construction!
Remember, with all the stages outlined below The House & Land Company assists their clients every step of the way. Just contact Greg anytime at www.TheHLC.com
1.Financing Your First Home
Work out your total budget. That’s land, site works, legal fees, bank fees, settlement costs, rates and taxes, building costs, finishing touches (like landscaping and furniture) and your moving in costs.
Call Alan to determine whether you can borrow the amount required and to secure a pre-approval of finance before you commence your search.
Ask Alan to explain the process of repayments. That’s when land repayments will commence, the amount, as well as when drawdown and repayments will commence during the construction process. Ensure you have the cash flow to fund your land, building and any rent and other expenses you are may need to pay during construction.
Check whether you are eligible for the First Home Owners Grant, which may entitle you to up to $7,000 towards your new home. Check with Alan if you are entitled to stamp duty exemtion, which applies for first home constructors.
2.Choosing Your Block Of Land
When purchasing your block, consider if the existing or proposed design will suit your needs. Things like proximity to transport, schools, shopping centres and sporting facilities.
Then check to see whether the land has any encumbrances, easements, proposed resumptions or restrictive covenants applicable or whether the local shire has any special building conditions. These may influence the type of home you can build or may hold up the issue of the block title. A hold up in the block title may effect your holding costs and cause lengthy delays in settlement.
Check that the block will be suitable for the home design if you have chosen one – be aware of local shire planning requirements that effect frontages and clearances.
Consider the site works. Tree removal, levelling, retaining walls and so forth can add hefty additional costs.
3.Getting Ready to Build
Visit display homes to choose the home design that best suits your needs.
You may consider employing an independent third party builder to represent you and to check at key stages prior to progress funding, to make sure all construction up to that point meets building standards and is built according to construction plans.
Check with one of the House & Land Company Consultants to ensure you understand what is and isn’t included in the building price.
Find out more about your building contract by calling the Dept of Commerce and asking for their fact sheet Understanding the ‘Preparation of Plans Agreement’ and the ‘Preliminary Work Contract’.
Check your plans thoroughly before signing the Contract. Check all the specifications and make sure any variations you have asked for have been included before you sign. Remember that variations made after the contract is signed will be costly.
Manage the stages of progress payments during the various stages of construction and calculate your repayments as the project advances.
Be aware of the time the building of your home is due to start and finish. Understand your rights and the builder’s rights should the builder over-run the original construction time.
Ensure you have a Home Indemnity Insurance certificate from the builder before you pay any deposit.
Check your First Home Owners Grant has been confirmed.
Always seek independent legal advice if you are unsure of any aspect of your building contract before you sign!
4.The Construction Of Your First Home
Before construction begins, the builder will invite you to a pre-start meeting to make a number of important decisions about materials, colours, tiles, fittings etc. Make your decisions NOW! Because changes down the track will cost and could delay the construction time.
Ensure you have the contact details for all people from the builder’s office to liaise with during the building process.
Arrange to regularly check progress on your building site and ensure all specifications are being carried out. It’s especially important to check each stage before making progress payments.
Once the home reaches ‘practical completion’ the builder will seek your final payment. Be sure you check the construction thoroughly and advise the builder of any issues that require attention.
If you are unsure or not confident managing the final handover inspection yourself, there are a number of qualified building inspectors that specialise in helping you with your final inspection. They will give you peace of mind knowing you haven’t missed anything.
5. Key Handover and Moving In!
Once key handover has taken place (after ‘practical completion and your final progress payment) you will be free to move in or your tennant to move in and complete any finishing aspects to your new home that were not included in the building contract.
Get ready to move in by notifying all relevant authorities of your new address and ensuring your power, phone, gas, water etc are all connected.
Now it’s time to start enjoying your new home or collecting your first rent. It is probably the biggest investment you have ever made.
