Building your home can be an exciting journey

Building your dream home means getting exactly the house you want, the way you want it. Getting the right builder means your dream does not become a nightmare.

Everything you need to know about building

Building a home can be more expensive than buying and it is often very time- consuming. So let’s look at what you need to know before you embark on creating your dream project.

Buying vacant land to build on

Things to consider when choosing your land:

Accessibility – is it close to your work, schools and transport routes?
Soil – Dolomite and clay will require stronger foundations for stability, this means that your foundations could cost a lot more.
Is the ground level? Leveling ground or building on slopes will add to your building costs.
Check the building or zoning restrictions as well as title deed conditions – be sure you are allowed to build the type of home you want.
Speaking to an architect or town planner early in the process is recommended.
Services – does the property have water, electricity and sanitation provided by your local municipality?

Building costs

What you should do:

Get several builder’s quotes before you begin.
Check your builder’s previous history and get references.
Make sure your builder is registered with the National Home Builders Registration Council (NHBRC).
Plan for weather and unforeseen circumstances - budget at least 20% extra for these and ensure that this is written into your contract
Agree with your builder on each and every add - on or deviation including the costs. Make sure any deviations or add- ons are written down to avoid later disagreements on the increased costing.

Things to look out for:

Simple square houses will cost less than complicated structures.
Boundary walls and swimming pools will be extra costs that can be included in the building contract and may also be bonded by the bank.
Landscaping and finishes (including fixtures and fittings) should also be included in the building contract but will not be covered by your bond which means you will have to pay for these costs out of your own pocket.
Professional fees (architects, engineers, project managers and NHBRC enrolment) must be included in the contract and will be paid as part of the contract through progress payments.
If there are deviations from the original building plans submitted, for example moving walls, adding a patio etc. this may increase costs and delay payments.
Expiry of the builder's registration certificate before 100% completion of the project can also cause further delays.

The building process

Find your land.
Use our affordability calculator to decide how much you can afford.
Draw up building plans with an architect.
Find a builder who is registered with the NHBRC and get a quote plus a signed contract.

Get the following documents from your builder:

Tender (up to R5m); Bill of Quantities (above R5m)
Building Contract
NHBRC Builders registration certificate
Schedule of Finishes
Building Plans
NHBRC enrolment certificate
Signed Engineers certificate for foundations
Signed Engineers certificate for slab (multi storey)
Signed Engineers certificate for roof
Entomologist, Poison or Pest Control Certificate (If Requested by the valuer)

Arrange to meet your nearest Absa Building Consultant call 0860 111 007.

Your building loan

Your building loan is based on current market value (not replacement value) of your property after it is completed. So the amount of the loan will often not cover the full building costs and the cost of your land. The difference is called the shortfall (or own contribution) and you will be required to pay this yourself – make sure you calculate this cost upfront.
Over and above the shortfall (or own contribution) you may have also received a lower building loan amount against the property value. As a result, a deposit may also be required.

Building and progress payments

The builder will first complete the foundation to the building.
You will have to pay your builder according to the terms of the contract that you negotiated with your builder.
You will be required to firstly pay the shortfall yourself plus an additional 10%.
Once you have done that you can then request a 10% progress payment from your bank.
A bank- approved valuer will assess the work and sign off. Certain professional certificates may also be required at different building phase completions before payments will be made. Please note the Absa valuer is not an engineer nor a financial expert - so they cannot give you any advice regarding your structure or your finances.
Your interest will be capitalised over 9 months and your repayments will begin after the 9 month period. During the 9 month period we will pay out your building loan to you based on ‘progress payments’ requested by you. These payments will be subject to valuations done on completed work.
We allow for 6 progress payments during the building contract period. Final payment is only made once work is completed and you have obtained an occupational certificate from your municipality.
Debit orders for your building loan repayments will be activated 9 months after registration of your loan - even if your home is not complete.
Interest will accrue on your loan from the day the first payment is made to you and will be added to your loan amount - so it is advisable to start paying into your building loan account as soon as possible

The best way to build your home

Building a home exactly the way you want it is a dream for many people, but it is possible. Careful planning, budgeting and making sure you have a reputable builder – along with lots of advice - is the only way to do it. It doesn’t cost a cent to plan so why not start now? Your dream home could be nearer than you think.

Understanding building loans Apply for a home loan