House and Land Packages

When developers offer a home packaged with the land it is to be built on, this is often termed a 'house and land' package. To purchase a house and land package, you must firstly:

• Research the location and developer,
• Select a display home,
• Decide upon the type of package you'll purchase, and
• Understand the building process.

Research the location and developer

Most house and land packages are offered in areas of new development, therefore, your choice of location is likely to be limited.

When comparing options, try to find the location that best suits your lifestyle. Often one of the most important factors to buyers is their distance from work. Perhaps you need to be located close to specific amenities. Look through the following list and note down those factors that are important to you.

Travel time

• Work place close
• Access to public transport
• Family/friends nearby
• Shopping facilities
• Medical facilities

Educational Facilities

• Childcare
• Pre-school
• Primary school
• Secondary school
• University

Recreational Facilities

• Parks
• Sporting facilities (e.g. sports grounds, gyms, tennis courts, pools, etc.)
• Beaches
• Libraries
• Entertainment

Environment

• Appealing streetscape
• Low noise area (away from traffic, plane paths and industry)
• Clean air

You also need to do your research when it comes to the developer. Find out how long developers have been in business and how many house and land packages they have sold. Also ask for referrals to at least three of their previous customers.

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Select a display home

When looking to buy a display home, spend plenty of time researching the various packages available. Almost all developers will have display homes you can walk through. Visit the homes of various builders and also look over several plans. You should compare not only designs and costs, but also the quality of the finished houses.

In some instances you may be able to vary the design to suit your tastes. Check with the developer. Should variations be possible, find out exactly how these changes will effect the total costs.

When you find a display home you would like to buy, read over the contract thoroughly. Check all the details concerning materials and services which are to be included with the purchase. Do not rely on the salesperson?s word that particular services or materials will be included, make sure they are detailed in the contract.

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Decide upon the type of package you will purchase

Developers usually offer two different packages. The first involves you purchasing the land from the developer before they build the house. The second option sees the developer build the house on their own land, which you purchase once construction is completed.

Buying the land from the developer prior to construction will mean that you pay a deposit on the land (usually 10% of the purchase price). The balance of the land's value is to be paid upon settlement, after which the builder will commence construction.

Therefore, under this type of package you will need two different loans - a land loan and a building loan. The advantage to this arrangement is that stamp duty is not payable on the cost of building the house (only on the value of the undeveloped land).

During the course of constructing your home you will be required to make progress payments. These payments will come due at various stages of the construction, e.g. when the framework is erected, after brickwork and tiling is completed and at lock-up stage.

If, however, you choose to have the developer build on their own land, you will usually be required to pay a deposit of 5% before building begins. There are no progress payments, with the balance being due once construction is complete.

This approach allows you to defer payments until the house has been built, an especially attractive option if need to continue paying rent until this time.

However, this package will be more expensive overall, as you must pay stamp duty on both the house and the land. Also, the developer is likely to increase the total purchase price to compensate for the interest costs he incurred by purchasing the land and building materials.

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Understand the building process

Should you decide to buy a house and land package, the following list offers a guide as to the building process.

(1) First, select the floor plan of the home your wish to have built or have a plan designed to suit your individual lifestyle.

(2) The developer should now ensure this plan is suitable for the land you have chosen (see our tips on selecting land).

(3) Once the design and features are decided on, a Contour Survey of your land will need to be carried out to ascertain accurately the extent of cut/fill requirements, connection points for power supply, stormwater discharge and site clearing etc. An Engineer will also be commissioned to carry out sub-surface investigations to determine the correct slab/footing system required for the site.

(4) Once all the reports, investigations are finalised, you should obtain copies of these documents, along with a copy of your plans and the specifications. Review these carefully and consider having an independent architect review them as well.

(5) Once you are satisfied with the plans and specifications, you will then be asked to sign a Building Contract. For information on this important document, click here.

(6) Building approvals can range from 2 weeks to 8 weeks, depending on the shire. Once the approved plans are received, finance is arranged and construction insurances put in place, construction can begin.

(8) You should be kept informed during the construction by speaking with either the Construction Manager or the Building Supervisor on a regular basis. If you are to pay periodic fees, these will coincide with particular stages of the construction.

(9) Nearing completion, you should be advised the date of settlement to enable you to organise your move (refer to our moving checklist). You are also entitled to walk through your new home prior to settlement to ensure the finish and workmanship are of the standard you expect.

(10) Some developers will contact you after settlement to check that all is in order. They may even attend to maintenance items.

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