Building a home – Alan and Katrina’s Journey

Building a home is an exciting, and often fraught experience, and it’s hard to get concrete knowledge on what to do.  Often the builders hold onto information and make it difficult for you to know what your options are.

Mortgage_construction-150x150Alan and Katrina Borthwick are about to build a house.  We will be documenting this through this blog over the coming year, and a bit as the house is built.

The stages of build are likely to be:

  1. What is building, deciding on what strategy to go with?
  2. Finding the land
  3. Buying the land
  4. Initial talks with the builder and draft layout
  5. Builders prep work and initial quote
  6. Reviewing the draft plans, and house layout
  7. Update the quote as needed
  8. Architect does the drawings
  9. Quote updated
  10. Valuation off plans
  11. Finance approval for build
  12. Consent applied for/ approved
  13. Finance fully approved
  14. Build starts
  15. Progress payments
  16. Build completed

Now these steps are not going to be the same for everyone, I may merge or change the stages down the track as needed. and some steps will have elements from other steps as well.

 

Background

Katrina and Alan got married in late 2015 and decided to look for a house with a view to moving in sometime in 2017 or early 2018 when their lease comes up.  They are in no rush as Alan runs DUX Financial from the current flat.

I am now going to switch to first person.

After looking at multiple houses and missing out on a couple at silly prices, we decided to consider building.

Before we started we had to decide if we wanted a House and Land package or Purchase the land and then organise the build.

So what does this mean?

 

House and Land Package

In this option the builder tends to offer the land with the house already suggested.  You may get a couple of choices as to which house you are getting built, but often it’s just the one choice.  You may be able to make some small changes, but it’s often what you use is what you get.

The advantage to this is that most of the work is done, and you don’t need to arrange anything, or check that the house fits etc. the builder/developer will have already done much of the ground work to ensure the house is valid on the site, and can be built.  And you also get a fixed price, for both the land and build done.

You don’t get to pick the builder and you may not save much money as the developer is selling the package as a retail deal.

Often the consents are already done and so the build can be moved on to quite quickly.

Depending on the builder, it’s either a turnkey contract, where you pay the initial deposit and the rest when finished, at which point you own the house and land or a progress build where you pay the build in stages and may own the land early on.

It’s best to think of this like buying an already finished house, but you don’t get it for a year.

 

Land then Build

In this option you find the land and determine the builder, and what to build separately.

The builder may be the same as sold you the land or you can pick your own.

You need to work out the plans to the house, and some builders will have some pre designed houses, or you may need to start from scratch.

You will need to make sure you can actually build on the site the way you want to and what the covenants and other restrictions for the build are.

Usually you will buy the land and the work out the build separately.

The builder almost certainly wants progress payments, unless they are really big and agree on a turnkey.

 

What did we do?

Looking at this we decided that if we found the right land and build package we would go for it, but most likely would end up buying the land and then sorting the build.

So we then extended out Trade Me searches to look at land.

In the next episode I will go through the process of finding and buying the land and the initial steps we did.

By Alan Borthwick

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