Starting – Page 9 – A New House

NEIGHBOURS

Would you worry if you saw this guy (from Jim’s Jihad?) mowing the lawn next door?

Unlikely. . . but it does illustrate the fact that neighbours can have a big effect on your enjoyment, or otherwise, of your house.

In fact 20% of us have fallen out with a neighbour in the last 5 years, and only 1% said all their neighbours were great.

Before Buying a Block

If you are buying on a new subdivision who your neighbour will be is always a lottery . . . . so corner block have always been attractive to me as it means one less neighbour.

If I was looking at a vacant block (or Knock down rebuild) in an established suburb I would aim to make visits:

During the middle of a working day to check for barking dogs.
Mid to late evening to check for loud music.

At Selection/PreStart

If you want better sound proofing two things you should consider are:

Smaller Windows – As solid walls have better sound reduction than Glass

Double Glazing – Much better noise insulation than single panes

See Noise for more posts

Photo courtesy of neighborshame.com where you will find more bad neighbour photos.

Reasons to Re-Build

Knock Down and Rebuild, or Renovate?

It may be the only house you can find in the area you like is dilapidated, like this one.

You may already live in the house but it no longer suits your family’s needs.

If the house is un-renovated, and over 40 years old its going to need a lot of effort to incorporate modern features that people now expect.

Renovate

If the existing house has a preservation order, or the area has a heritage overlay you may have no choice but to renovate.

Some older houses that have a lot of character means renovating and extending may be a better way to go. Examples would be some California Bungalows, Victorian Cottages and Federation Homes.

Just remember that you will probably want to include things like:

En Suites
Walk In Robes
Large Island Kitchens
Air Conditioning
Good Insulation
New Electrical Installation

Costs can easily reach $3,000 per sq m as access will be extremely difficult and the renovation often involves reducing the existing house to little more than a shell.

Knock down and Rebuild

If the house has few redeeming features and the existing layout makes it almost impossible to reach a great outcome then maybe your money would be better invested in a Knock Down and Rebuild.

You may find a project home builders can build a new home for $1,500- $2,000 per sq m. Even using a custom builder you may find the cost cheaper than the cost of renovations with fewer compromises.

You really have to spend some time on research before you make a decision.

A Final Thought

A house is about Your Heart, the Block you buy, or own, is about the Location.

Unless I really loved the house with all its foibles I would rebuild.

See Blocks for more posts

Design – Controlling Costs

When you are planning a custom home costs can quickly run away with the initial budget!

Just watch a few episodes of ‘Grand Designs’ and you will see people with costs out of control!

If you are planning a custom home here are a few thoughts.

Expensive Main Features

Overall Size If you buy Bigger Than You Need its not just the house cost, but the extra rooms you need to furnish
Lots of Different Shapes – Irregular Floor Plans, Unusual Shaped Rooms , Other Than 90 Degree Corners, Complex Roof Shapes (see Photo), all mean that prefabricated components can’t be used and increase both labour costs and risk of mistakes.
Site Slopes – Even with split level houses there will be additional foundation costs and extra area for stairs.
Underground Garages – Structures below Ground Level have to be much stronger and consequently are more expensive.
Large Open Spans – Extra Engineering Design Costs and more complex structures.
Masonry Internal Walls – More expensive than timber frame walled and add to the cost of installing services.
Bushfire Protection – The lowest level of Bushfire Risk can add $10,000, build in the Flame Zone and $100,000 may not be enough.

Expensive Details

Ceiling Corners – Square set or shadow line corners look good but are more expensive than traditional cornices.
Lighting – Downlights everywhere, especially in lighting bulkheads can add thousands.
Expensive Appliances – Some of the kitchens I see have more appliances than a commercial kitchen but are only used for warming up take away food.

What do you think adds to the cost?

All this and much more in the Guide to Choosing a New House

Are You Prepared For Interest Rate Rises

Interest Rates are Going Up!

Don’t know when but they haven’t gone up for 4 years so it isn’t going to last much longer!

How Much?

Well the real answer is no one knows, but some of the financial wizz kids are predicting something like 1.5% rise.

To me that means expect a 2% rise.

So What Will It Mean to You?

A 1% rise on a new mortgage will increase the weekly payments by around $20/week for every $100,000 borrowed.

That means for a 2% rise on a typical $400,000 mortgage you could be looking at $160/week.

Don’t forget this won’t be the only thing going up. Gas, Water, Electricity, Rates, all seem to be on the move upwards while not a lot seems to be happening on the wages front.

Here are a few thoughts about what you could do:

Already Along The House Journey

It could be worth looking to fix either part, or all of your mortgage. If you have separate mortgages for the house and the land it may be best to fix one while leaving the other variable to maintain some flexibility.

Start increasing your mortgage payments now so you get used to living on less, and you build up a cash buffer.

Think about contingency plans in case you get hit with something like a reduction ,or loss of income.

Starting To Look At A New House

You need to factor in the potential price rise into your budget, and your expectations.

Considering going for a smaller house rather than having a financial millstone around your neck for the next 5 or more years.

See Finance for similar posts

Display Homes – Understanding the Builders Rep

Going into every Display Home the first person you see is the Builders Representative.

When talking to the representative it helps to understand a little about them, so here are some thoughts;

Pay

We all work for money but the Representative’s conditions of employment might be a fair bit different to you.

Most Representatives will receive minimal, or even no basic pay.
Their commission on each sale will be several thousand of dollar, but they may not get it for months.
Although they may get a partial payment for your initial signature they usually won’t be paid the full amount until the slab goes down.

This means their main driver is to get you committed as soon as possible. . . . So don’t be rushed. Take your time to understand exactly what you are buying. (The current ‘Limited Offer‘ will be replaced by a different offer of similar value)

Priorities

Because of the way the rep is paid their main interest will be in people who are committed to buying a house rather than ‘Tyre Kickers’.

If you don’t:

Own a block, or
Want a ‘House and Land Package’ or,
Already talked to a mortgage provider, and know your budget

Just tell them “you are starting to look at houses”, take some brochures, and have a look around.

When you have a good idea of what you want, and just as important ‘How Much Can You Afford’ then make an appointment to go back.

It’s probably best to do this midweek when it will be quieter and your children will be at school.

Length of Employment

Because of the lack of a basic wage, weekend work, and the wait for commission, turnover of representatives can be high.

This means that it’s really important to make sure that all offers, and agreements, are clearly put down in writing.

You don’t want to get further down the track arguing for an upgrade that was verbally agreed by someone who you are then told is now an ex-employee.

See ‘Choosing a Builder’ for more posts

Or my Guide to Choosing a House which also contains lots of useful checklists for only $4.

Pre-Wetting A New House Block

Reason For Pre-Wetting

If you are Building On Clay that is dry there is a risk of Soil Heave.

This is due to expansion of the clay if the moisture level increases with particular risk factors being:

Building after a long period of very dry weather when large cracks in the surface are visible.
Knock down and rebuild projects where there is a risk that part of the new foundations are on drier land than other parts.
Where there are trees, or trees have recently been removed.

To minimise the risk there is often an Engineers requirement to pre-wet the site to stabilise the moisture content.

Pre-Wetting Requirement

A typical requirement is to run sprinklers for 2 hours a day for 8-10 days which should increase the soil moisture to a depth of approx 1m.

Then the fill/construction pad below the slab should be laid within 2-3 days,

You are aiming for the equivalent of 20-25 mm of rainfall a day (20-25L/m2) The intention is on each day to thoroughly wet the top layer of soil and fill all the cracks with water without actually waterlogging the site.

For maximum effect the best time to do the pre-wetting is the late evening to minimise evaporation.

I have hear of builders saying the pre-wetting isn’t needed. Don’t accept this without soil moisture tests that have been accepted by the engineer who made the original requirement.

Effectiveness of Pre-Wetting

Although pre-wetting will minimise the risk of Soil Heave

It doesn’t mean that good foundation design can be neglected.
Letting the site moisture content stabilise through a winter, after removal of buildings/trees, is likely to be more effective.

See Ground Conditions for more Posts

Understanding Display Homes

I have compared the Cost of a Display Home with the price for the advertised price of the standard house, so here are what the differences are:

What you won’t get in the Basic House (unless there is a ‘Special Offer‘)

Premium Kitchen Cabinets
Premium Kitchen Fittings and Appliances
Stone Benchtops
Glass or Premium Tile splashback.
Large Stacker Doors in Family Room
Downlights and other lighting upgrades
Premium ‘Walk In Robe’ fit out
Premium Bathroom Fittings
Premium Bathroom Tiles
Premium Flooring Options
Premium Internal and External Doors and Door Fittings.
Air Conditioning
Premium Facade Option
Premium Bricks
Premium Roof Tiles
Premium Driveway front path
Decking / Barbecue area
Landscaping (Including Paths)
Pool

Here are some things you probably won’t see but I recommend you think about budgeting for.

Extra Power Outlets
TV / Satellite Antenna
Extra TV/Data Points
Extra External Taps
Better locks
Washing Line
Automatic Garage Door Opener

For more advice see the ‘Guide to Choosing a House‘

Quick Build ?

One of the reasons that people may choose a builder is the promise of a ‘Quick Build’ . . . . . but how realistic is that promise?

Getting the house finished quickly might be attractive to you so here are a couple of things to think about before you make a choice.

Is Obtaining Permits Included?

Builders will either want to say they aren’t responsible for any planning/building permit delays of over 1 month, or even exclude the planning/building permit period entirely from the period.

Approvals should be quick for a new major development subdivision and may only take around a month.

If you are building in an established area such as an single block subdivision, or Knock Down Rebuild (KDR), it can take several months.

What Are The Liquidated Damages?

Any ‘Quick Build Offer’ means nothing unless you are compensated for any time overrun!

The way this is done in a building contract is by specifying a Liquidated Damages amount.

Unless this amount is a reasonable sum (say close to what you are paying in rent) the offer isn’t really worth anything!

For more information see Liquidated Damages.

Will You Be A First Home Buyer In Perth?

Sponsored by First Home Owners Centre

The Department Of Finance has released good news if you are considering becoming a first home buyer, in Perth or anywhere in Western Australia.

Changes in 2013-2014

The adjustment announced last year, in the projected State Budget for 2013-2014, included an increase in the First Home Owner Grant from the previous amount of $7,000 to $10,000. This increase is for any first home buyer in Perth, or elsewhere in Western Australia – constructing or buying a new home.

In addition, it will offer a $3,000 allowance for any first home buyer obtaining an Established Home Commence Operation from September 25, 2013. Essentially, this means that any first home buyer that signs an agreement to build or purchase a new house from that date, or has already begun laying the foundation for the building of a new house, is entitled to the enlarged $10,000 endowment.

If you are a first home buyer signing a new agreement to purchase a previously constructed home from September 25, 2013, you may be qualified for an award of $3,000 towards that purchase.

Duty Liability

As a first home buyer qualified for the First Home Owner Grant, you need to be aware that a percentage rate of transfer duty will apply if the assessment of the property falls below a certain limit. When you apply, the details of this duty will be explained in the documentation.

Other Resources

As a potential first home buyer in Perth, you should look into what other resources might be available to you to assist with your home buying funding. In addition to the funding available from the Department of Finance, there is also grant funding available from the Department of Commerce. Founded under the Real Estate and Business Agents Act, The Home Buyers Assistance Account, offers a support grant of up to $2,000.

For more information on learning how you can become a first home buyer in Perth, visit FHOC.

Stormwater Discharge Point

One check that is often forgotten when buying a house block in an established suburb is how storm water is removed from the site.

Forty, or more, years ago when land was cheaper, it was not unusual for blocks to be quite large compared with the size of the house.

Disposing of storm water by allowing it to soak into the garden in the garden was acceptable. (This is still effective in sandy areas such as much of Western Australia)

As a result many properties were built without connection to a surface water sewer.

Modern Knock Down and Rebuild Problems

If you buy block in an older suburb with the intention of subdividing, or demolishing and building a bigger house, you could have problems if you haven’t got access to a storm water sewer.

Disposal to a much smaller garden area probably won’t work.

In order to protect adjoining properties from overflows from your property the council are likely to make discharge to an approved point conditional on any development approval.

Dealing with the attendant problems if you plan to extend or subdivide a block without a stormwater discharge point can add thousands of dollars to your costs.

Options

Possible options are:

Soakwells. If you are lucky enough to have a sandy block soakwells may be a solution. Low cost.(see this link: Soakwells )
Pipe to existing surface water sewer. This may involve negotiating with adjacent property owners. Very difficult to achieve unless the affected neighbours also want to subdivide. Very expensive.
Discharge to Street
Check with your council to see if this is permitted. A typical street connection will look something like this kerb outlet. Can be a reasonable cost if the block is above the road, or very expensive if the block is below road level Pumps and a detention tank will be needed (See these links Pumps and Detention Tank)

Top Five Reasons for Neighbour Problems