Keep a record
January 14, 2020
Building a home is based on promises and agreements, which all need to be documented. As a home buyer, you should have a copy of every document that is part of the transaction. These documents may include all or some of the following.
- Your application for finance pre-approval and the terms of any loan approval letter. The loan approval documentation should include such details as the maximum amount you can borrow, the interest rate you will be charged, and the length of time the rate is guaranteed for. You also want to know how to proceed once you have signed the contract with the builder to access funds for each required payment.
- The contract with your builder. Always get a written contract setting out the agreement between you and your home builder. The contract should cover exactly what you are getting, in detail; where and when; and price and progress payment milestones.
- Fulfilment of contract conditions. The contract may contain conditions, such as gaining finance, that have to be met within a certain time limit before you have a firm deal. You should get copies of any documentation related to the fulfilment of these conditions and a copy should be forwarded immediately to your builder.
- Variation documents and contract amendments. It is not uncommon to finetune some of the details or finishing touches on a home when building work is in progress. Frequently, homeowners will ask for changes throughout the course of construction as they begin to see the finished product. All such changes must be agreed to by both the builder and the owner, and recorded via a signed written variation document setting out the change to the price and the scope of works. You should keep a copy of all variations for your records.
- Proof of homeowners warranty insurance. Professional home builders in all states except Tasmania must obtain a policy of homeowners warranty insurance before they commence construction of your home. Your builder should also take out public liability insurance and construction works insurance. You should request details for all of these policies.
- Estimates from your insurance company, movers, solicitor and others. The more you know about the final costs of the entire transaction, the better you can budget. Get written, detailed estimates whenever possible. How much will it cost to insure your new home? How many people and hours are included in the mover’s estimate? What are the connection costs for water, gas and electricity? What other items must be dealt with on handover day?
Finally, it makes good sense to keep track of conversations, meetings and correspondence between you, your builder and everyone else involved in the transaction. Note down these discussions and decisions. And don’t hesitate to ask questions of your builder, or mention any concerns you may have.
Professional home builders have been through the process many times and are ready to offer their assistance and experience.
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