House and Land Package vs Building
If you envision residing in your dream home, you’ll either contemplate building or renovating. However, house and land packages are a reliable – and more affordable – alternative to building a home, something Australians are quickly realizing. They offer as much character as a traditional home build but without many of the downsides. Nevertheless, house and land packages are still misunderstood, especially concerning how they differ from buying land and building a home.
The first significant difference between a house and land package and a traditional build is finding land. Before you can begin building a home, you need to find suitable land for a build. This means searching and viewing land, examining soil, until you find a parcel of land that is both within budget and fit for building. This process itself can take a few months to complete. With house and land packages, the process is simple. You find a specialist, review their inventory, and view different packages and model homes before deciding to purchase. Building usually begins as soon as you’ve paid your deposit and signed an unconditional exchange.
House and land packages require you to pay a small percentages upfront. The fees are separated into a reservation fee and deposit. You will pay the remaining amount once your home is ready to occupy. With a traditional build, however, you begin paying your loans – mortgage and construction – before you occupy the home. The process works as follows: After buying the land through a mortgage, builders receive progress payments once construction begins. As your builders receive these payments, you are required to start paying the loan.
When you’re building your home, everything from connecting electricity to getting council approval is a cost – and task – you need to factor into the build. Whereas with house and land packages, you pay an all-inclusive price.
Another tedious aspect of building a home is that you need to be there every step of the way to ensure the building meets your standards. While you can outsource this job or rely on your builders, you also need to be on call should builders encounter unexpected obstacles. House and land packages differ because a team oversees the work. You are only kept abreast of the progress before being handed over a turn-key home.
Given developers’ resources, many house and land packages use highly-rated construction companies to complete their projects. Of course, it is easier to secure the work of a world-class construction company when you are building several properties simultaneously. As the average homeowner building your home, you won’t have the same selection of contractors as developers. Additionally, a superior builder, architect, or designer will come at a cost.
The timeframe for building a home and building a house and land package is nearly identical. The build usually takes place in 6 to 12 months. Although the building process is identical, what happens pre and post-build can extend the timeframe of a traditional home build. Issues and delays – you can mitigate when buying a house and land package.
House and land packages differ because the neighbourhood is usually in development with other house and land package homes. This can significantly reduce the cost of the land since you’re purchasing into a yet-to-be-established neighbourhood. Traditional builds, however, usually occur in established neighbourhoods, increasing the land price. However, you do get to evaluate the area before building to get a sense of its amenities and community, which isn’t possible with a house and land package.
Warranties and Guarantees
Builders warranty insurance is mandatory in NSW if your build exceeds $20,000. So, in terms of warranties, there isn’t any difference between building a home or buying a house and land package.
If you want a convenient building process, a house and land package is the superior option. The process works similarly to purchasing a home on resale. However, you get to consult on the build before moving in, which guarantees you get the finishes you desire. Tradition builds, on the other hand, are labour-intensive, requiring you to be present every step of the way.
Overall, house and land packages are the ideal crossover between purchasing a home in resale and building your home.