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13 Mistakes People Make When Building a New Home

Building a new home can be a complex process and there are many ways that buyers can get caught out. Here are 13 important lessons that will save you money and stress.

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 builder sales reps in the industry deliberately 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 up properly and the buyer then finds out that they have to pay thousands more than allowed in the contract. 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 and truly beyond the 5 or 6 months promised by the sales rep. Ask about build times, how many projects the supervisors will be handling and ask for client references. The last thing you want is to be told your house will take 6 months, and it then ends up taking 2 years.

3. Misunderstanding dimensions on plans
Floor plan dimensions and areas can be calculated in different ways and builders often indicate floor areas to give the appearance that their design is larger than the competitors. 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 it difficult for buyers to make a fair comparison between different builders’ designs. Beware of this when comparing designs.

4. 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. Builders should be able to recommend different brokers for you.

5. ‘Turnkey’ doesn’t always mean ‘Turnkey’
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. Unfortunately, some building companies advertise a product as turnkey without all of these necessary items. Ask for a breakdown of all the inclusions and make sure everything you need is included in the turnkey package.

6. Understand the area you are buying in
Choosing a location with poor growth and rental yields will affect your return on your investment when you want to sell or rent it out. RP-Data is a good, un-biased source of information. Take the time to study the median weekly rent, rental yield percentages and growth of the suburb you are thinking of buying into. A good Builder’s Sales Rep should be able to assist you in understanding this information.

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

8. Be aware of comparing apples to oranges when shopping for house designs
It is exceedingly difficult to compare houses from different builders to determine which is better value for money. There are so many differences between a house quote from one builder to another, including; the specifications, materials, method of construction and the roof beams. At the end of the day, pick a design that you like within your budget that ticks as many boxes as possible and get on with it.

9. Display home inclusions
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.

visiting a display home

10. Don’t get 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 your choice of upgrades limited to only those that add to the value of your property or increase your rental yield. If you’re going to have renters in your property, ensure you have landlord insurance such as that provided by RACV to cover damage to your investment that could happen during this period.

11. Making expensive structural changes
Making changes to a builder’s standard house design can cost you a premium in drafting and construction. The best way to keep the cost down is to shop around until you find a design you like as it is, or only requires minimal changes or additions. Remember, research only costs you your time!

12. Taking advantage of developer bonus items
Why pay for something you don’t have to! In some new land estates, developers are including free items, such as; landscaping, fencing, rebates on solar power, and rebates of the price of the lot. It pays to research the different development estates in the area you’re looking at buying to see what’s on offer.

13. A tip for saving money
Builders charge a margin on top of every material used or tradie contracted to do a job. If you want to save a few dollars, you could try organising your own painting, landscaping, installing carpets and flooring, and installing blinds. However, keep in mind that these things can only be done after the builder has completed construction and handed the keys over, so the additional time it takes to get these items completed will mean it takes longer before your house will be ready to live in.

What to ask your builder before you sign on the dotted line.

View Start Right Homes (WA) here >

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Zoe Langenberg

Zoe is passionate about coffee and interior design. You can find her most weekends exploring an art gallery or devouring a good book.


iBuildNew is the market leading aggregator dedicated to residential home construction and land development. As an independent platform, iBuildNew helps Australians identify and compare new home designs, house and land packages and land estates. It’s the smart way home buyers, who are considering a new build, can find the ideal options to match their individual needs. Home building is a big decision, we make sure you get it right.

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