Top Tips When Buying A House And Land Package
House and land packages are a cheap and stress-free way to own a home. Typically, you purchase land from a development company and build a custom home on the parcel. Below is a guide detailing the considerations you should make when buying a house and land package.
Check The Reputation Of The Development Company
It is probably the most crucial consideration when purchasing a land and house package. Conduct some background research to determine the following. What is the company's experience in selling house and land packages? Does the company have experienced staff? Have previous customers complained about the company's services? Typically, you would want to avoid companies accused of overpriced houses, selling land without the proper documentation or failing to complete homes.
Understand The Terms Of The Package
Look out for the following before buying the package:
- Does the company allow you to purchase the land and house distinctively? It enables you to negotiate the house and land separately.
- Does the company compel you to put up a specific house design? It could be the case when buying into a strata development.
- How long will the construction works take? It is an essential consideration if you intend to move in within a few months.
- Are you allowed to sell the property off-the-plan? It enables you to sell the incomplete house at a profit.
- What happens if the company does not complete the construction works within the specified period? Ideally, you should get your cashback.
- The company should have a reasonable and effective dispute resolution mechanism. For example, they could use arbitration or mediation.
Appraise The Land
Ask your real estate agent or conveyancer to appraise the land before you purchase it. It prevents you from purchasing an overpriced property. Remember, overpriced land will take longer to appreciate. The professional should also approximate the appreciation of the property. For instance, how much can you sell the property once you build the land? It would also be wise to ask a quantity surveyor to assess the house construction tips. It gives you the upper hand when negotiating the package.
Financing Options
If you do not have ready cash, you could opt to purchase the package through bank finance. If this is the case, you should conduct a cost-benefit analysis to determine whether you will take a single mortgage or a house and construction loan. Your real estate agent will help you assess the risks and costs of either option. Besides, they will negotiate the interest rates and terms of repayment.
When purchasing a house and land package, assess the reputation of the development company, examine the terms of the package, appraise the land and determine appropriate financing.
