Common risks when building a custom home. When building your dream home, it can be both one of the most exciting times of your life and one of the scariest. Both for good reason.
This can be a self rewarding experience provided you set out with good intentions and a realistic approach. For many homeowners, this isn’t always the case. In this market insight, we take the opportunity to share some common risks that have caught buyers out trying to build their own custom home. Seeking advice is ideally important as this is likely the most expensive personal venture you’ll be taken on financially.
You don’t have to be an experienced buyer or seasoned investor to make the right decisions, but these common risks will help you navigate and take the correct steps in advance.
Stick to your building agreement
It happens to often, where buyers source the floor plan, facade and fixture & fittings, to later want to make late changes. Many also want to make changes throughout the build in progress. When building a custom home, the builder will offer you a fixed price, or may offer you a price subject to some small terms and conditions. At Crest Property Investments, we only help buyers with full turn-key solutions. These are fixed priced options and fully inclusive. This ensures you can budget and be aware with what you’ll end up with at the end. Transparency and good communication is important.
If buyers want to incorporate changes or seem to remain indecisive, the cost will get away from you. The bank will approve you based on your financial situation and the property in question, however, if you make changes, this may surpass your approved loan amount and catch you out.
It is critical to stick to your building agreement, keep your budget in the forefront of your mind at all times and remain realistic to what you want and what you can afford. A custom build can be anything you want, but it all comes down to being sensible.
Not understanding the building contract
Your building contract will outline all of the content relating to the build, the stages, costs and inclusions. Before signing a contract with a builder, you should have the contract reviewed by a solicitor. They will be able to talk and guide you through the general and special conditions. They will provide you with the peace of mind and ensure you understand the building contract.
Having a sound understanding of what is and isn’t included in the build, who is responsible for completing various tasks, any estimates, allowances and required council approvals from the beginning will help you avoid a range of issues down the track.
Consumer Affairs Australia has a very useful checklist to help to understand many of the important steps. Of course, our team at Crest Property Investments can also help make sure its a rewarding experience.
Choosing the right builder
When it comes to choosing a builder, we are widely spoilt for choice. This isn’t always a good thing! You need to do your due diligence by not just taking experience as the primary criteria. Building experience isn’t always what its cracked out to be. This doesn’t demonstrate their quality workmanship, understanding of your requirements or being resourceful to manage your custom build. Price is another misleading criteria. Some newer builders are trying to break into the market by heavily discounting their job while others may be desperate for new work. Price and experience are a consideration, but they are not the only things to look out for.
Choosing the right builder takes time, patience and trust. At Crest Property Investments we work closely with many builders offering different skill sets. Not one person wants the same custom build or does the same job in the same location. Feel free to contact us to discuss this further.
Create a list of objectives
You should create a list of objectives outlining what you want versus what you need. Better yet, create your list in priority order so you include what is most important. You may find the list of wants can cause you to over-budget, so be realistic and sensible.
Some examples to add to your list are:
- A single-storey or double-story house
- Full turn-key or custom design
- French provincial or Hampton’s facade
- Open floor plan or closed living areas
- Fixture and fittings brands and sizes
Don’t listen to everyone
No doubt, everyone has had some form of experience with property. If its occupying, renting or investing, we all have a right to a useful opinion. However, no one has the same set of circumstances or the same risk tolerance. Seeking professional advice is of upmost importance. Having an intermediate to support you throughout the buying and building process will minimise the emotional roll coaster and ensure you stick to the plan.
What to do next?
If you’d like to learn more about building a custom home, please don’t hesitate to contact us. We would welcome the opportunity to help with your property purchase. Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more please contact us. We welcome the opportunity to assist you.
October 2022
