Building a New Home? Look Before You Sign!

By Kumaran Naidoo
Image used for representational purpose only

The stakes are high when you invest in property

Have you ever signed a legally binding contract only to regret it later? Regardless of the size of the transaction, have you noticed that the level of service prior to signing a contract is far greater than the level of service after signing the contract? Now, imagine if this happened to you when you decided on building your home! The stakes are so much higher because it’s probably the biggest investment you’ll ever make, and that investment should be protected at all costs.

As a building consultant who worked in the industry for almost 30 years, there’s not whole lot I haven’t heard or seen, and I want to share some of that experience with you.

I often meet people who ask if I think it’s too late for them to withdraw from a Domestic Building Contract. I always ask for a reason, because this should be such an exciting time for them. Building a home is the biggest financial decision most people will ever make, so it’s heartbreaking when people think of withdrawing from a building contract after years of saving up for a deposit and are finally ready to build. Unfortunately, none of their responses surprise me because I’ve heard most of them before. I’m going to share these reasons with you so that, when the time comes for you to build your home, you won’t make the same mistakes.

At the top of the list are false expectations set by the builder. In this case, the client is often left confused and unsatisfied. In these cases, I often hear clients say “I didn’t know”, “No one told me” or “if only I knew”, and “I thought I was getting X because that what the sales consultant promised me, so why am I getting Y”.

The reality is that most people are new to the experience of building a home. Their knowledge about the entire process is limited, so they are often at the mercy of the builder, only to find out, once it’s too late, that the information they were given wasn’t entirely accurate and was in most cases in favour of the builder.

One very simple rule to follow is “If in doubt, don’t sign!” Don’t allow your builder to pressure you into signing any contracts. The common sales pitches you will often come across are:

  • Our promotion is nearing an end so you have to sign by a particular date to secure the promotion and price. Do you honestly think the sales consultant will turn you away if you signed a week or two later?
  • Sign up now to qualify for free stone benchtops, air-conditioning, etc. Who knows if you may get a better promotion later on!
  • Pay a small amount and get thousands of dollars worth of free upgrades. The costs are already covered in the base price of the home, so don’t be tempted by false promises. If it’s too good to be true, it’s probably not true!
  • We can undertake whatever changes you want. Just sign here and our team in the office will sort everything out. Ask your sales consultant to commit to this in writing. In many cases the sales team will tell you whatever you want to hear, just so they can take a deposit off you to secure the sale.
  • In a busy market, I don’t really believe you’ll get anything for free. Chances are that the costs of these so-called freebees are already built into the base price of the home. On the other hand, you may actually get a few real freebees from a builder in a relatively quiet market to attract sales and boost their revenue.

Another reason customers want to cancel is because of the lack of and/ or poor communication from the builder. Failure to return phone calls with updates etc is a growing concern for many customers. Furthermore, the customer service consultant may not be adequately trained or equipped to answer certain questions, resulting in customers receiving unsatisfactory responses and inaccurate information.

The following advice is crucial if you are considering building a home:

  • Research the building contractor on the internet (via Google search, forums, Product Review, etc.) and by contacting others who may have used the contractor in the past.
  • Price is important, but service is equally if not more important
  • Enquire about the building contractor’s Quality Assurance process.
  • Enquire whether the contractor offers extended warranty periods
  • Ensure that you understand what materials, fixtures, and fittings are offered as standard with the home.
  • Understanding your site costs is crucial as this could be a significantly large amount that could lead to massive out–of-pocket expenses, which may not add value to your bank valuation. Builders often fix site costs, which could work for or against you, so it’s important that you understand how this aspect works
  • Understand the builder’s entire process, from deposit to handover. If it doesn’t make sense to you, keep asking the builder questions until you are satisfied.
  • Don’t get too excited or lured in by discounts. More often than not they are included in the price of the home.
  • Enquire about the maintenance period and the response times for rectification work. Most builders don’t have in-house trades and utilise the services of sub-contractors. This is acceptable, as long as the builder facilitates the work with the sub-contractors in such a manner that disruptions to your everyday routine are minimal. You wouldn’t want to waste your annual leave days waiting for trades etc. As far as practicable you would prefer all rectification work to be carried out on the same day.
  • Check for any “special conditions” the builder may have included in the contract. These conditions are often inserted into the building contract and not made known to customers at time of deposit. The builder has a duty of care to make you aware of this.
  • Read and understand all disclaimers in the contract quote. Just when you think there’s no more to pay, you may find that these disclaimers lead to additional costs.

The importance of getting everything right upfront is vital to the success of your journey from deposit through to completion of construction.

Should you require any assistance please feel free to contact CDRS Global on (03) 7379 7747 or for a free no obligation consultation. Our aim is for you to “Build with Peace of Mind”


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