Image Alt

Dureka Homes

Best builders in Melbourne

7 mistakes homebuyers can make before signing a new building contract

Buying a new home can be an exciting experience, but you not only have to find the right location and builder. You also need to avoid making mistakes that may ruin your investment. After all, it may be one of the most significant purchases of your life, so you should not treat it like any other transaction. 

Before building your dream abode, know who your dream home builders are. Think twice about the team you are about to trust. This will go a long way in avoiding issues with your build. Need help figuring out how to do it? Below are the most common mistakes you must avoid before signing a new building contract. 

1. Skipping over reading the warranty

There are two main types of builder warranties: implied and express. Implied warranties cover potential defects in workmanship based on local building codes and standards. They are often vaguely worded and usually have a short cut-off period. 

Whereas express warranties have more precise wording on what is covered. They spell out the problems a builder is responsible for and other important things such as the warranty duration. Make sure you properly read the contract to understand what warranties it does and does not cover. This may include appliances covered by a manufacturer’s warranty, damage caused by ordinary wear and tear, defects caused by lack of maintenance, etc. 

2. Not clarifying the timeline

Beyond reading and understanding the warranty, you should also understand their timeline for completing the new home. Know what the exact time of completion is. It may vary based on the builder, supply-chain issues, labours, etc.  

While making an agreement, ask your builder if they have any building limitations. Some detailed specifications to keep in mind are work and payment schedules. Quality home builders should be able to lay out a clear timeline for you, so that you can follow along.  

3. Making emotional decisions

When planning to build your dream home, getting caught up in the excitement is often easy. You may envision your family having fun in the backyard or living area, but it’s not just an emotional milestone.  

Remember that it isn’t just the home of your dreams. It’s likely the most significant financial investment you are going to make. So, it is essential to make the buying decision based on facts – not emotions.  

4. Neglecting insurance

One of the critical elements in a contract is insurance. Neglecting to ensure proper insurance is in place means putting yourself at risk of huge costs, court proceedings, legal fees, etc. To make sure your investment is protected with your chosen builder, we recommend having the following insurance in place: 

  • Public liability insurance  
  • Employers’ liability insurance  
  • Developer insolvency insurance  

 5. Skipping the site inspection

This can be one of the most regretful mistakes that homebuyers make before signing a deal. Luckily, it can be easily avoided. Site inspections are intended to protect the buyer from making bad decisions when planning home construction.  

When you don’t inspect, you may be more likely to miss issues which are likely to increase your construction cost, such as the presence of a large slope on the land which you may have missed prior. Additionally, you won’t have any recourse if a major issue like water damage surfaces after you close on a home. So, make sure you visit the new community and check the site.  

6. Assuming that you can’t negotiate

It is a common myth that the builder won’t negotiate on price. But that’s just not true. You can negotiate lot lines, loan fees and other items. A builder may initially say no, but asking the question is always good.  

You can also hire a real estate agent who specialises in new construction. The agent will give you extra confidence when negotiating with home builders. 

7. Forgetting the little things

A good contract must address everything involved with home construction – even if it’s a tiny detail. This may include all those little jobs that are not usually at the forefront of your mind.  

How and when will the rubbish be removed from the site? Who will arrange the construction materials and equipment needed for your build? Will the builder hire subcontractors? These are some key questions you should address.  

Summing up

Building a new home offers many perks, but there are plenty of pitfalls. So, homebuyers should pay close attention to each step of the process. Be sure to carefully read and understand all the terms and conditions of the contract. Consider all the pros and cons of new construction before signing on the dotted line for your dream home.  

To learn more, get in touch with experienced home builders in Melbourne.