By Chaice Paterson, CEO & Founder, Low Deposit Homes | Updated June 2026

When you sign a Low Deposit Homes building contract, what you’re signing is a fixed-price contract. There are no provisional sums. There are no “wait until we dig the slab and we’ll let you know” surprises. The price on the contract is the price you pay. For that to be possible, a long list of checks has to happen on the block BEFORE the contract is drafted — soil classification, slope, drainage, easements, council fees, BAL rating, services availability. All of these directly affect the cost to build, and if they’re not assessed properly upfront, the builder either eats the cost difference or the buyer does. At LDH we structure it so the builder eats it — because we only work with panel builders who can carry that risk and still hit the fixed price. This article walks through what gets checked, why each item matters for pricing, and why this all happens BEFORE contract signing rather than during a cooling-off period.

Why is the building inspection done before the contract is signed?

Cooling-off is a 5-business-day backstop in Queensland (3 business days in Victoria) — it’s not a due diligence window. By the time a first home buyer signs a building contract with one of our panel builders, the inspection work has already happened. The block has been assessed. The price has been built on that assessment. Cooling-off then exists as a safety net for new information or a change in circumstances, not as the period when you scramble to check whether your block has Class P soil.

This is a deliberate structural choice. Builders who rely on cooling-off period adjustments — or worse, post-contract provisional sum increases — pass risk to the client. LDH’s panel builders absorb that risk, which is only possible if the due diligence happens before pen meets paper.

What does the inspection process check?

Below is what gets checked on every block before we present a fixed-price package. Each item affects build cost — get it wrong, and the cost difference has to come from somewhere.

Soil classification (AS 2870 — A, S, M, H, P). The Australian Standard for residential slab design grades soil by reactivity to moisture. Class A and S blocks build easily with standard waffle pods or strip footings. Class M and H need engineered slabs with extra reinforcement. Class P (problem sites) need piers, deep footings, or specialised engineering. The cost difference between Class A and Class P can be $30K–$80K on the slab alone.

Site slope and fall. A flat block builds fastest and cheapest. A block with significant fall needs retaining walls, cut and fill, terracing, or split-level design. The further the fall, the more it costs — both in construction and in driveway/landscaping.

Drainage and water table. Low-lying blocks or those with shallow water tables need pumped stormwater, agi drain systems, or modified foundation designs. Council records show water management history for the area.

Easements. Sewer, water, gas, stormwater, electrical, or telecommunications easements through the block can prevent house placement or require specific build setbacks. Some easements make portions of the block unbuildable.

Tree retention. Council tree preservation orders can reduce buildable area significantly. Estate covenants may also require specific tree retention.

BAL rating (Bushfire Attack Level). Determines whether the build needs bushfire-compliant construction (specific cladding, glass, ember protection). BAL-12.5 adds little cost. BAL-29 and above can add $20K–$50K to the build. BAL-FZ (Flame Zone) may make the block effectively unbuildable for standard packages.

Services availability. Connections to power, water, sewer, gas, NBN — confirmed in place or budgeted into the build. Long service runs from the street can add cost.

Council fees and contributions. Headworks, infrastructure charges, and council application fees vary by LGA and estate. These get factored into the package pricing upfront.

Covenants and design restrictions. Estate-specific design covenants (materials, colours, fence types, minimum floor area) affect which house designs can be built. Getting this wrong means a build that doesn’t comply.

Who carries the risk if something is wrong?

This is the question that defines whether your contract is genuinely fixed-price.

At Low Deposit Homes, with our panel builders:

• Site cost surprises after slab dig — risk borne by the builder
• No provisional sums in the contract — what you sign is what you pay
• Council fees and infrastructure charges — risk borne by the builder
• Soil class re-grading post-contract — risk borne by the builder
• Variations driven by site conditions — absorbed by the builder

This is why we are strict on which builders sit on our panel. We work with builders who can carry this risk because they’ve done the upfront engineering and pricing properly. AIA/Avia is our primary partner because they have council-familiar designs, fast pre-construction processes, and the pricing discipline to absorb site variation. Resi Design Homes runs second for tighter land prices where Avia is over budget. Emerald Developments specialises in the North side. Each panel builder is selected on the basis that they can hold a fixed price after the block has been properly assessed.

With non-panel builders or builders who do work in provisional sums: the buyer carries the risk. A “fixed price” that has provisional sums in it isn’t actually fixed. A builder who hasn’t properly assessed the block before signing will come back with cost increases after contract — for the slab, the service connections, the headworks, whatever surprises emerge. This is the most common reason house and land packages blow out by $30K–$80K. It’s why LDH won’t refer clients to off-panel builders even when they’re cheaper on paper.

What’s the interest rate position during construction?

During the build phase, your loan is structured as a construction loan with progressive drawdowns. You pay interest on the funds drawn down so far, not on the full loan amount. This is critical for managing cash flow during the build.

The actual interest rate is the same as the standard variable home loan rate at your lender — roughly 6% in 2026. The structure is interest-only during construction, converting to principal and interest at handover. Here’s roughly how the drawdown and interest profile looks across a typical 8–9 month build:

Month 1 (deposit drawdown): ~5% of build cost drawn. Interest payable on that small portion only.

Month 3 (slab drawn): approximately 15–25% of total build cost drawn. At ~6% interest, that’s interest on ~$80K–$130K of drawn-down funds — typically $400–$650/month interest.

Month 5 (lockup drawn): approximately 45–55% drawn. Interest on ~$200K–$280K of drawn-down funds — typically $1,000–$1,400/month interest.

Month 8 (handover): ~95–100% drawn. Full interest on the loan begins from this point. The loan converts from interest-only construction structure to standard P&I.

Two practical implications. First, the early months are cheaper than you might expect because you’re only paying interest on what’s been released. Second, you’re still likely paying rent during construction — so the build period requires budgeting for rent plus the construction loan interest. Most LDH clients factor this into their cash flow plan from pre-approval onward.

Why is this a fixed-price contract specifically?

In Queensland, builders working under the QBCC framework can only take a maximum 5% deposit on a residential building contract. That’s the structural cap. The rest of the build is funded through progress payments at defined stages (deposit, base/slab, frame, lock-up, fixing, completion) — and those payments are released only when the work for that stage is genuinely complete.

For the buyer, this means:

• Maximum 5% upfront deposit — your funds are protected
• Each stage payment requires verifiable progress
• You’re not paying for work that hasn’t been done
• The total price across all stages is the same as the contract price — no provisional sum top-ups

For the builder, this means they’re carrying cash flow risk during the early build phases — which is another reason they have to price the block accurately upfront. A builder who underprices the slab can’t recover it through provisional sums on a properly drafted LDH contract.

What about the warranty position after handover?

Australian state law requires builders to provide structural warranties — typically 6 years for major defects and 2 years for minor defects under QBCC (in Victoria, the Domestic Building Insurance scheme provides similar coverage). Plus the standard maintenance period built into most building contracts (typically 6 months of post-handover defect rectification).

For LDH clients, the workflow if defects emerge:

1. Document the issue with photos and dates
2. Report to the builder during the maintenance period for rectification
3. For more significant issues outside the maintenance period, escalate via QBCC (or VBA in Victoria)
4. LDH’s relationship with panel builders gives clients an additional escalation route — we’re invested in the client experience, not just the sale

Should I get an independent inspection during the build?

Many LDH clients use an independent building consultant for stage inspections — typically at slab, frame, lock-up, and pre-handover. Each inspection costs a few hundred dollars and catches potential defects before they’re buried under finishes.

This is optional but recommended for any first home buyer who wants extra assurance. It’s not a substitute for the panel builder’s QA process — it’s an additional layer for peace of mind.

What LDH does to pre-assess blocks before they’re presented to you

Every block we present has been pre-assessed against the criteria above. Specifically:

• Indicative soil reports obtained from the developer or our own engineering checks
• Council records cross-referenced for drainage, easements, and overlays
• Title searches reviewed for easements and covenants
• Estate covenants documented
• BAL rating verified
• Council fees and contributions confirmed with the builder
• Build cost implications calculated and locked into the package price

By the time a fixed-price package is in your hands, the building and land assessment work is done. The contract you’re signing reflects all of this analysis.

“The reason we obsess over the builder panel is simple: a fixed-price contract isn’t worth anything if the builder can pop the price after signing. Our panel builders absorb site cost surprises, council fee variations, and slab re-grades because they’ve done the upfront work to price the block correctly. That’s the standard. We don’t compromise on it because the client outcome depends on it.” — Chaice Paterson, founder of Low Deposit Homes

Frequently Asked Questions

Q: Can I use a builder who isn’t on the LDH panel? You can build with any QBCC-licensed builder in Queensland (or VBA-registered in Victoria), but LDH refers clients to our panel because we can stand behind the fixed-price commitment. If you go off-panel, you’re managing the builder relationship and contract risk yourself.

Q: What happens if the soil class comes back worse than expected after contract signing? With LDH panel builders on a fixed-price contract, this risk sits with the builder. They’ve priced the block based on indicative soil reports and engineering assessment, and any variance is theirs to absorb.

Q: Do I still need a building consultant if LDH and the builder have already assessed the block? Not strictly required, but many clients use one for stage inspections during the build for additional peace of mind. The decision is yours.

Q: Is there a cooling-off period after I sign the building contract? Queensland building contracts under QBCC have a 5-business-day cooling-off period after signing. As above, we treat this as a backstop — the inspection and due diligence work happens before signing, not during.

Q: What’s the warranty on my new build after handover? Statutory warranties apply under QBCC in Queensland (6 years for structural, 2 years for non-structural) and DBI in Victoria. Plus the maintenance period (typically 6 months) where the builder rectifies defects identified post-handover.

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Low Deposit Homes operates under Winning Homes Australia Pty Ltd (ACN 633 321 758). All calculations are indicative. Individual circumstances may vary. This is not financial advice.