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What to consider before building

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Before you can build the house you first must determine what type of house you want to build. They type of house you build will be determined by 3 factors:

1.Your Budget how much you have to spend

2.Your Requirements what you want i.e. 3 bedroom, 2 bathrooms, double garage

3.Councils Requirements what they are willing to approve

Ultimately there will always be compromises with any development to ensure that you get the best possible outcome taking into account these 3 factors.

It is essential that before deciding on a builder that you first have some plans drawn up to be clear exactly what it is you would like them to quote you on.

By providing the same plans to various builders you will ensure that you are comparing 'apples with apples' to ensure that you are truly getting the best value for money.


What to do during construction

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During construction, it is recommended that you check that the building is proceeding according to plan. However you should ensure that you do not inconvenience or issue instructions to the tradespeople on site.

It is vitally important that you communicate only with the builder or builder's representative; this will ensure that there is common agreement and any changes can be formalised.

During the construction phase make sure you record the details of any discussions you may have with the builder about the construction of your house. This may mean keeping a diary to record all day-to-day happenings, including any discussions with the builder regarding progress of construction. Common discussion points may include how the weather has effected the construction or any other issues that may result in delays.

It is important that you diligently file all paperwork and ensure you keep copies of any letters and notices that relate to the construction of your house.

It may also be a good idea to take photographs of the construction at regular intervals. This detailed record keeping will become essential if there are any miscommunications or problems that may cause disputes at a later stage.

If you are unsure about checking that the construction is proceeding to plan, you can employ an independent building consultant to monitor the construction on your behalf.


What does practical completion mean?

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Practical completion means that the building work is at a stage where the house can be reasonably capable of being used for its intended purpose. When the builder is satisfied that the house is ready for inspection, you will receive a notice of practical completion.

It is recommended that you take care when inspecting the house with the builder to satisfy yourself that the builder has reached the practical completion stage. You should be reasonable, but not rushed into signing your acceptance that the house has been practically completed.

It is important that you do not overlook any major defects. It may be a good idea to employ an independent and reputable building consultant to assist you with this inspection.

Once you have moved in to your house, it may be difficult to prove that a defect was caused by the builder. In addition, once you've moved in, it may be difficult and disruptive for workmen to rectify any problems.

By law for contracts between $7,500 and $500,000, the builder is liable to make good, without additional cost, defects in the building work notified in writing within a minimum of four months from practical completion. Check your contract for the exact period of notification of defects.

Many builders offer a structural warranty which may be for up to 30 years covering the structural integrity of the building. However this may vary in both timeframe as well as what is covered for different builders.

If a dispute occurs about who is responsible to rectify a fault, you can take the matter to the Building Disputes Tribunal for determination.


Some dark clouds on the horizon for builders

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Builder AV Jennings is suffering from the decline in construction activity as it prepares to report a net loss of up to $32 million.

With construction activity down 20% from its peak it is difficult to see things turning around soon as people continuing to put off buying new homes.

Excluding the write downs, AV Jennings expects make a net operating profit of $5.1 million for the year to June 30. However, when the write downs are taken into account its net loss will come in between $27 million and $32 million.

The company says that lower volumes and margins flowing from the deterioration in the residential homes market, particularly in regional areas, were to blame.

In a statement AV Jennings said 'the negative consumer sentiment appears to be driven by a number of factors including concerns over the impact of macro-economic factors in Europe and the United States, and the impact on Australia of any slowdown in China'.

The company also believes that it may also be as a result of concerns over the political climate following the last federal election. The effect of this is that some buyers appear to be delaying purchasing decisions.''

Although now represents a fantastic opportunity to take advantage of the great deals on offer from builders it is essential that know exactly what they are getting into when signing a contract.

There is much more to building a house than just signing the initial contract. All too often people believe they have negotiated the best price only to find out later that the builder has left out essential items and taken short cuts to recoup the cost.

Now more than ever it is important to get expert guidance and advice when negotiating with builders to ensure that you are not only getting the best price but also the best quality and service as well.


Not all builders are the same

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Believe it or not but i often spend my weekends out looking around at building sites to see the quality of workmanship from various builders.

As you can see from the above picture it is pretty obvious there is a problem here. Yet it never ceases to surprise me how the site supervisor can miss things such as this.

Obviously this is not a builder that i would refer my clients to however it does concern me when i am talking to clients that their sole focus is on getting the best price which may result in builders taking short cuts on the quality of the home they are building.

I believe that it is fine to negotiate with builders to ensure that we are getting the best possible price but it is essential that we do not compromise on quality