Read on for some of the most common mistakes people make when building a new home and how you can avoid them.
Building a new home can be very exciting because you have the opportunity to create your dream home. However, many people get so caught up in the process that they make mistakes that could end up costing thousands of dollars down the track.
This is probably the most common mistake that new home buyers make when building their first home. When you are shopping around for builders, many of them will intentionally offer an estimate that is significantly lower than what the final cost will be in an effort to beat out their competitors to win your business. Then, when the final bill comes, it could be thousands or even tens of thousands of dollars higher than what you thought you were agreeing to!
To protect yourself from this tactic, ask the builder for a detailed breakdown of the specific costs involved. Find out what procedures the builder has in place for dealing with any increases in cost. A reputable, honest builder should notify you in writing of any possible changes for your approval before proceeding. The better you understand the details of the estimate and ways it may change during the building process, the better you will be able to budget for any extraneous costs.
Image credit @AlexanderStein
NOT RESEARCHING THE NEIGHBOURHOOD
Just as you conduct research on the builder you hope to work with, so too should you research the neighbourhood you would like to live in. Check with the local council for any proposed construction in the area. It may be a great neighbourhood now, but if an industrial plant is about to be built right down the street, you may wish to reconsider.
Similarly, an area that seems fairly sparse at the moment may be on the cusp of a construction boom, bringing shopping, dining and entertainment options to the area. Whether or not you have children now, you may also want to look into the schools in the area. You may choose to have children in the future and will want them to have easy access to quality education.
NOT SHOPPING AROUND FOR A MORTGAGE
This is another area where you should not skimp on research. There are many banks and mortgage companies available to offer you financing for building your new home, and all are not created equal. Take the time to explore the myriad of options available to you to ensure that you are getting the best value for your money. A mortgage broker will have access to a wide range of options and can help you wade through them to find the one that is best suited to your needs.
Image credit @stevepb
FALLING IN LOVE WITH A DISPLAY HOME
When builders show display homes, they are doing everything they can to impress prospective clients to win their business. Because of this, many display homes include extras and add-ons that are not included in the basic home build. However, the price they show is usually for the basic home.
To avoid a costly surprise when your home is finished, ask the builders what exactly is included in the build price and what costs extra. That gorgeous tile flooring you loved in the display home is likely an add-on, with a lower-cost flooring coming with the basic build. Don’t be shy about asking questions. The builder should be able to give you an honest answer about the true cost of the display home.
MAKING CHANGES TO THE HOUSE DESIGN
Let’s say you really like a particular home design but would absolutely love it if there were an extra bathroom downstairs or a balcony for the master bedroom. These types of changes to the overall layout of the house can be very costly, especially if you start making them after the house is already being built. Try to keep changes to a minimum, or better yet, keep shopping around until you find a floor plan that you are truly satisfied with.
OVERSPENDING ON THE FIT-OUT
This is a trap that many people fall into. While it may seem like just a little bit extra here and there to upgrade small details, like doorknobs or window coverings, these small charges add up, potentially costing you thousands of dollars more than you had originally budgeted. If you are building the home for yourself and plan on living in it for a long time, then by all means, buy those fancy crystal drawer pulls you love so much (assuming you can afford them).
However, overspending on fixtures can particularly be a problem for property investors who are building a home with the intention of renting it out. Those fancy doorknobs will likely not add any value to the home, whereas spending more for upgraded appliances in the kitchen could increase the rental value. For investment properties, stick to the basics, only upgrading in areas where it will truly add value