Buying a house and land package has lots of benefits. Here are some questions to guide you through the buying off the plan process.
What finance will I need?
Buying a house and land package – also called buying off the plan – means buying a block of land in a new development and then finding a builder to construct your new home. You’ll need to pay a 10% deposit and stamp duty on the land only. Then you’ll need two loans – one for purchasing the block and one for construction. With the construction loan, you’ll draw down funds in stages and only pay interest on the money as you use it.
Is buying off the plan cheaper?
Developers want to sell before they build to meet their construction finance requirements and often provide discounted prices for off the plan homes. Different states offer incentives for new home builders, including stamp duty reductions and building grants that can save you even more. Check your state government’s website for more information.
Where do I want to live?
First, consider where you want to live. If you work in a major city, you’ll probably be travelling for longer, making good transport links a high priority for the development you choose. For some developments, local infrastructure is still catching up with population growth. If a new community doesn’t already have parks, supermarkets, schools and medical facilities, be sure to ask when they’re scheduled for construction/completion.
New land releases are usually divided into blocks between 300 m2 and 600m2. Smaller sites are often nearer retail precincts and parks so if you want to build big, there may be a trade-off against living closer to your new community hub. Choose a sloping block and you may need to pay extra for a custom-designed home that works with the gradient of the site. Bear this in mind when you’re weighing up the costs of buying and building on different blocks.
Can I choose my own builder and home design?
Most developments and new home builders offer a choice of display homes you can visit. Always make sure you check exactly what will be included in the price. Display homes may feature premium finishes for things like tiles and carpets that cost more than the standard design. Ask questions about flexibility with the floor plan and how much changes to the standard home design could cost.
When it comes to choosing a new home builder, you should have an extensive checklist to follow up, including visiting recent projects, getting referrals from previous clients, and asking questions like, are they licensed? do they offer a fixed price contract? In order to protect your home from the very start, ask your solicitor to check their contract for workmanship warranties and builders’ insurance provisions.
How long until I can move in?
Your developer and builder will provide you with a contract, including the expected time of completion for your new home. It’s quite common to see a sunset clause in off the plan contracts. This is a condition that allows either the buyer or the developer to withdraw from the contract if the development isn’t finished on time. It’s designed to benefit both parties so make sure you have a qualified legal representative review your contract so you know your rights throughout the buying off the plan process.
Have you bought a house and land package for your first home? Tell us about your experiences in the comments below.