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building or renovating a home

If you want to build a new home or renovate an existing property there are a number of considerations.

You will need to use qualified service providers who can help you plan and undertake the building or renovation works. You will need a reputable builder who is licensed. Depending on the nature of the project, you may need additional providers such as a draftsman to complete site inspections and to design your house or renovations.

Before starting any building or renovation works, you will need to enter into a building contract with your chosen builder. You should seek professional legal and financial advice before entering into any contract.

Your building contract should include detailed specifications of the house or renovations to be undertaken, including specifying any additional works such as driveways, fencing and connections to utilities.

You will need to ensure that these specifications are complete and meet your needs.

The building contract must also include provisions for progress payments to be made to the builder as work progresses. The progress payment schedule must comply with industry standards. Lenders such as IBA will only release progress payments if there are sufficient funds remaining to complete the building at each stage.

A valuer may be engaged to confirm that the works completed on the property are of sufficient value compared to the progress payment being requested.

For legal reasons, lenders such as IBA cannot get involved in discussions about a particular building contract or any dispute that may arise between you and the builder.

The contract is a legal document and you should read all the fine print and seek legal advice. It is your responsibility to go through the terms and conditions with your legal representative. Never sign a contract unless you are certain you understand what it means.

Building a home

Building a home is a big undertaking and requires you to consider more issues than if you were buying an existing house.

If you do not already own a block of land, you will need to find a suitable site for your home. The availability of vacant land on which you can build a home will vary significantly depending on the area in which you want to live.

You should identify particular suburbs or localities in which you want to live and where building a home is an option.

Before deciding on a particular block of land, you should check the planning controls governing the site (for example, zoning, heritage conservation, and building restrictions such as setbacks and height limits). This information is available from your local council.

The landscape of the site can greatly affect the costs of building a home. You should have a qualified person undertake a site inspection to determine if there are any issues that will affect construction.  For example the need for extensive retaining walls or large trees that need to be removed.

If you want to build a home to meet your own requirements, you will need to engage a licensed builder or project manager. Project homes (homes that are built by major builders in large volumes) are a good option for many families as these will generally have a lower purchase price than a custom-built home.

Renovating a home

Renovating a home can improve the suitability and liveability of an existing home. Upgrading can be expensive, so you should carefully consider whether the cost of purchasing the home and completing the required renovations is affordable for you.

Before going down this path, consult with a builder or architect who can inspect the property you are thinking of renovating, and provide you with information about potential issues and a cost estimate for the proposed renovations.

You may need to also obtain quotes from tradesmen e.g electrician or plumbers to make the decision if the renovation is affordable. 

Choosing a builder

It is important to find a builder with experience in the type of home construction or renovation you want to complete.

To choose the right builder you should:

  • get written quotes from a range of prospective builders
  • request references from past clients
  • check that your builder is licensed
  • agree to a timeline for completion
  • ensure your building contract is clear and covers all essential topics^.

(^ The contract should cover topics such as site preparation, connection of utilities, fencing, driveways and footpath restoration.)

Before signing a building contract you should seek professional legal and financial advice and have your home loan formally approved.

You will need to communicate and work with your chosen builder over the course of the project, so you need to be confident you have chosen someone you can trust. You should obtain professional legal advice before entering into any contact.