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Knocking down your old home and building a brand new one

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Have you ever wondered what’s involved in a knockdown and rebuild project?

We have the key steps outlined, along with some helpful hints for you to consider along the way…

Research, research, research

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The first step is to spend some time investigating builders, demolition companies and removal experts so that you are comfortable with who you are going to partner with on this project and have a good idea of the total cost upfront.

Ask your chosen builder to assess the block of land for you. They will be able to advise on how easy it will be to build on the site based on its slope; general accessibility and parking for trades/deliveries; overhead or underground power connections; and if trees can remain or will need to be removed.

At Coral Homes, we offer a free site assessment to provide you with an estimate of what your site works will cost and can advise you on the above.

The initial Information you will want to provide your builder during this stage includes:

• Registered title plan showing the length of all boundaries

• Location of underground sewerage and stormwater main pipes… and the connection points for the new home to be connected (if you have this information)

• Confirmation whether your land is within a council overlayed zone such as character, bushfire, acoustic or flood. You will be able to find out this information from your local council.

With the above information supplied, this will provide your builder with the right info to advise you on choosing a home design to suit your family’s lifestyle, plus fit on your block of land.

They will advise you on the size of the house versus the size of the block and whether you will need a relaxation for setbacks or site coverage, which plays a large part in attaining building approvals.

Armed with this information and having completed a free site assessment for you, Coral Homes will be able to provide you with an estimate with no deposit required upfront.

The second part of the research stage is also choosing a demolition and removal expert to partner with. Getting multiple quotes is highly recommended and make sure they include and can provide the following:

• The required permit cost for demolition and or removal (including underground services and any foundation footings)

• The cost to clear the whole site (trees included)

• Temporary fencing during demolition for safety requirements

• An asbestos clearance certificate (if applicable)

• Plugging and capping all sewer lines before the project gets underway. Keep in mind that depending on the age of the sewer connection and/or water meters you may be required to upgrade these main services.

• Commitment of how long it will take to complete the removal and clearing so that you can align your site start date with your builder accordingly.

An electrician may be required to disconnect your electricity connection separately to the demolition contractor’s quote. This is a great thing to ask about now and the expected time this may take so you can plan ahead accordingly. Where possible, we will be happy to provide recommendations on demolition experts in your area. Just ask your New Home Consultant for advice.

Tip: Introduce yourself to your neighbours. You never know when you may need to ask a favour like replacing existing fences, trimming their overhanging trees, approving relaxation applications or having your housewarming party going past midnight!

Seek Finance Pre-Approval

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Now that you have a good idea of how much everything will cost, now is the perfect time to meet with your bank or mortgage broker to discuss a construction loan and in particular your borrowing capacity. Getting a pre-approval is highly recommend before you start signing contracts and paying deposits of any kind.

You usually need a deposit for a construction loan, just as you do for any other home loan. Many lenders will expect you to have a 20% deposit. Although, some may let you borrow up to 95% with lenders mortgage insurance (LMI). How a lender calculates your loan-to-value (LVR) ratio for a construction loan works a little differently to other mortgages. Instead of basing your LVR on your current home value, a lender is likely to assess it based on the lower of:

• the projected value of your new home once completed, or

• the value of your land plus the value of the building contract.

The good news is a lender will often let you use some of this property’s equity to finance your build.

Tip: Check if there are any Government grants in the market that you will be eligible for to assist with financing your project. For example, currently The Commonwealth Government’s HomeBuilder scheme provides a $25,000 one-off payment towards some homeowners building a new home.

Engage a Builder and Demolition Partner

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There are a number of permits to be attained, paperwork completed and additional research to be done prior to the knocking down of your old home and the start of the construction of your new home.

Ideally you will engage both your builder and demolition company at a similar time so that they can formalise the paperwork, undertake further inspections, apply for permits and prepare to start their works at a similar time. I.e. site start date will ideally be not long after the site is finished being cleared. This will reduce your time away in temporary accommodation and save you money with any unnecessary downtime.

The next step for engaging Coral Homes as your chosen builder is approving your estimate with your New Home Consultant so that they can prepare a preliminary agreement for you. A $2,500 deposit is required at this stage to lock in your pricing and so that preliminary reports for your land can be ordered. These include a soil test and contour survey. We will also attain a service locator report from an engineer to 100% confirm the location of your underground main services.

Once these have all been completed, your New Home Consultant will organise for a tender letter to be prepared. These will include all your preliminary house plans that will take into account any changes that may be been required to suit the findings from the various land reports. Your New Home Consultant will take you through all the documents at an appointment and request any changes that you would like made. Once these are finalised and approved by you, an additional $1,000 deposit is payable to order your formal HIA contract. Tip: Make sure that this final amount is less than your pre-approved amount from the bank.

Sign your Contract

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Depending on your demolition partner, there may be a contract or agreement to sign and formalise your agreement with them. Ensure that this includes the full scope of works as previously agreed at the estimate or quoting stage.

Signing your contract with Coral Homes is a very exciting milestone! This means you have decided on your future home and are ready to commit to the project. Congratulations!

Upon signing your HIA contract and reviewing your final plans, the balance of your 5% deposit is now payable. This allows Coral Homes to lodge your documentation to Council for a building approval on your behalf.

Prepare for Construction and Demolition

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We will work closely with you to collate the following information from you:

• Proof of your land ownership i.e. rates notice.

• All signed variations to your house plans. This will only be applicable if there are changes to your plans after contract signing.

• Unconditional loan approval including Authority to Commence Construction

The quicker you are able to send us the above information, the quicker we will be able to issue you with a start date for construction. During this time, you will also attend our three selection appointments which include your tiles, colours and electrical choices to create the look and feel of your beautiful new home.

It is really important that your demolition company does not start the demolition until we have attained your building permit approval. We will contact you to advise that demolition can commence as soon as the building approval is received Following the confirmation of your building approval, it’s time to pack your bags and find some alternative accommodation!

In the meantime, organise the disconnection of your services (power, water, sewer, stormwater) by contacting your utility supplier, plumber, demolition partner and removal experts up to begin their service(s).

Once your site has been completely cleared, Coral Homes will complete a second soil report and contour survey now the site conditions have changed. Based on this information, we will do a second check to re-assess the site costs.

Coral Homes will prepare your file for construction by completing an internal Quality Assurance check of your building approval documents, slab design and retaining wall designs (if applicable) and prepare the final construction plans to provide to you. You will then be issued with a site start date – approximating 10 working days later.

TIP: We will need the asbestos remove certificate and sewer capping location information from you. Construction on your New Home Starts

It is now time to see your dream home come to life!

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The process will be very easy from here on out as Coral Homes will project manage the entire build, trades, temporary fencing, final site works etc. for you. Your Building Supervisor will kick this off by meeting you on site to discuss all aspects of constructing your new home and answer any questions you have. From here on, your Building Supervisor will also provide you with weekly updates on the progress across the following key stages of building your new home:

  1. Slab stage

  2. Frame stage

  3. External cladding stage

  4. Fixing stage

  5. Practical completion

Coral Homes uses private certifiers to inspect the home at each stage and ensure the build is fully compliant. We also engage an independent Quality Inspector for the final inspection to ensure we deliver above the expected industry standards.

At each of these key milestones, a progress payment will be required by you. This is a normal process for a construction loan and allows you to drill down into your loan at intervals rather than all at once.

Construction loans are usually interest-only for the first 12 months or until you’ve drawn down the entire loan – whichever happens first. At that point, they tend to convert to principal and interest loans. You also generally won’t pay interest on the money you haven’t drawn down which is the beauty of a construction loan versus a normal home loan.

You receive the keys to your new home

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It’s finally time to move back into your new home, so contact the removalists and start packing!

At your handover meeting, your Building Supervisor will provide helpful advice, guidance and demonstrations for important home service and warranty matters.

At Coral Homes, we also provide a superior aftercare service through our Service and Warranty Program for extended peace of mind.

So there you have it! Lots of tips and tricks and a detailed guide to knocking down and building a new home. If you would like more information, see how knock down and rebuild page or contact us about your knockdown and rebuild project today!

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