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These days many of the options available in the market are house and land package. This is when a builder owns the land and sells it on the condition that they will be the builders to build a house on it. Other times, the builder holds a land for a certain time-period from the developer and sells it as a home and land package.
Hence the usual procedure is that first the land settles after a certain period of time and then a home is built on it. Again, it all comes down to the knowledge of the buyer regarding the construction of a house as now they have only one builder as an option. If the buyer has no knowledge and assumes most of the things, then they may be in for a big surprise. A simple checklist has been written at https://www.propertygrowthnetwork.com.au/checklist-for-the-construction-of-a-house/ to go through the basic set of inclusions and questions to be asked to a builder. House and land are not good or bad but depends upon your knowledge and understanding of the process. If you see a flashy ad on the media for a house and land for 800K and without going through the inclusions and checking a few basic things and assuming lot of things, the upgrades and inclusions may end up at 1million point. Overseeing simple things like the following is a call for disaster…
- What type of AC is included, power etc.
- Is flooring included or you assume that the flooring is included.
- Blinds, flyscreens, antenna
- Site cost assumptions (do u really understand what a site cost is and what all is included)
- How many piers are included and what if rocks are discovered during digging
- Assuming things
These are few of the simple checklist items missed by the buyer and they can be missed even if you buy land only and chose a builder to build it.
The other side of this all is the analysis paralysis, some buyers want everything carved in stone and written in black and white and want everything to be fixed cost and down to a dollar figure, before they will pay any deposit for home and land package. This may sometimes not be possible due to the variability of the whole process, for example you may have to undergo the process of selections which has its own variability……..
- Kitchen selection
- Electricals selection
- Tile selection
- Colour selection
- Façade selection
- Site costs
- Variability in terms of actual digging of the site and you never know what is underneath the ground.
- Things to be done after handover for example driveway, landscaping, blinds, flyscreens, antenna, etc etc.
- Changes to the floorplan
Hence whether you buy land and chose your own builder or buy a house and land package and even if you do all the selections upfront, still there is a variability in the cost which cannot be eliminated. Hence keep a buffer of money in mind to cater for this variability.
So basically, the difference is that instead of having thousands of builders to chose from, you are limited to one builder only. This is not good or bad, it comes down to your knowledge, flexibility, negotiation, and willingness to work with the builder to deliver a quality product. The way market is going and land becoming a scares commodity, home and land packages will become more popular in near future. Hope this article will give you basic pointers to start on this exciting journey.