As the saying goes “The difference between two quotes is not the price” building a home can be a challenge when unexpected costs threaten to blow your budget. The problem is there’s no way of calculating one simple price that you can use to work out an overall cost of the build. To help you keep your budget from bolting, you need to know about any possible hidden costs, so read on to discover what you might have to face when you buy your block of land on which to build your house. Always check with your builder about any extras that you might be expect to pay as these prices are usually never fixed. The following are some items that can change the finished cost of your new home.
Once the home has been designed it will have an Energy Assessment done to determine if it meets the 6 star requirements. If the design does gain 6 stars it will have to be upgraded, this could mean cavity insulation or double glazed windows, these will all be extras to the cost of your home
When building a house, the site costs can vary significantly and it’s usually the largest unexpected cost you are likely to face simply because of the variability of soil and the levels on site. If the soil is bad or the slope is steep, the bigger the site costs will be. Also, if you need to build retaining walls, remove trees or if you find anything unexpected like buried asbestos, buried car body, groundwater, artifacts on your block, they all carry extra costs.
Builders will base their quotes on the best soil type, which is known as Class A classification, which is a sandy site, if your site is anything but sand you will have to pay extra for site works. In general, the steeper the slope, the steeper the cost. You will probably need a custom builder and custom design if your land is extremely sloped since the standard home building businesses will not be interested in building the home.
Many quotes from builders only include the structure itself without the driveway or landscaping which then has to be done separately and becomes a hidden cost. If the driveway is included it will usually be costed in as concrete pavers, If you want an exposed aggregate driveway, you will be paying substantially more, and this will affect your budget. As for landscaping this is something you can do yourself to help with the budget, but alway have a plan and work to the plan, so you end up with the result that you want.
This is something that has to be done so as not to cause damage to your new homes. Check to make sure that soakwells and pipework is drawn on your plans and is in your contract. To undertake this work after the home is built, is difficult and will add extra cost.
Some blocks in clay areas you are required to put your stormwater into the Local Government stormwater system, this needs to be included in the cost of your home.
Your property will likely have a Bushfire Attack Level (BAL) rating if your block is in or near a bushy location or is close to a national park. You can find this out by going to https://maps.slip.wa.gov.au/landgate/bushfireprone/ and typing in your address. Should you have a BAL rating, your builder or designer will have to incorporate specific changes to make your home safe from bushfires. Hidden costs are lurking here. Speak to your builder for an accurate assessment of the likely cost.
If your block is on flood-prone land, there are hidden costs here as well since your house must be designed and built to withstand a one in a 100-year flood. These are not standard, so there is an extra cost.
If you borrow more than 80% up to a maximum of 95%, a once off scaled premium is paid to the insurance company to secure the loan with the bank. Your loan is a risk to the bank, so the Lender’s Mortgage Insurance fee is paid directly to them either by you paying for it up front or by adding it to the loan amount. Talk to your Lender or Broker. The more you borrow the “riskier” the proposal is for the loss of security value.
Your lender will need a copy of your building contract and the Local Government approved plans when you apply for your construction loan. The bank or lender will get a valuation done for the on-completion value of your property. While your home is being built, you will probably have to pay rent plus interest each month of the amount owing on your construction loan, until the build is completed. Be prepared for the extra expenses which will vary based on the scheduled payments to the builder, interest rates and the size of your loan.
When comparing constructions cost you should also be looking for honesty, integrity and trust from the builder. You don’t know what you don’t know, so you are relying on the builder to tell you about any hidden extras.
Alex Morrison has been a SEO Expert in Melbourne for over 10 years. In this time he has worked with a range of businesses giving him an in depth understanding of many different industries including real estate, financial support and health care. As the owner of Integral Media he is now utilising his knowledge and experience with his rapidly increasing client portfolio to help them achieve their business goals.