Home & Land Packages: 6 Areas To Consider Before Purchasing
Buying a new build Home and Land package has become a popular option for many first home buyer’s.
Buying a home and land package can mean you require a deposit lower than 20% and have the time it takes to build to keep saving towards the purchase of your new home.
However there are many things to consider when buying a house and land package or a vacant section subject to a building contract being entered into.
In an effort to give first home buyer’s some guidance about what to think about, Yolande Snetler from McVeagh Fleming has summarised some of the key areas to consider.
1. Get A Copy Of The Sale & Purchase Agreement
Obtain a copy of the Agreement for Sale and Purchase including a Building Contract so that same may be reviewed by your solicitor.
The Sale and Purchase agreement for buying off the plan often includes several clauses that favour the seller so it is important to have your solicitor review it.
2. Do Your Homework On Lending Options
Don’t automatically use the builder’s lender, shop around and do your homework. You would also need to inform your lender that it is a house and land package or that you are purchasing a vacant section and planning to also enter into a building contract and settlement may not be for a while – so ensure that this would not cause any issue in terms of any lending. In most instances above would be subject to title issuing which would mean that settlement would not take place straight away and obviously your lender needs to be made aware of the same.
For help from our experienced First Home Buyer’s Club advisors, book a planning meeting today for guidance through the home buying process.
3. Confirm A Building Timeline
Find out when the builder can start with the building process and the timeframe for it to be completed. As you would be required to live elsewhere until the build is completed.
Get a written contract with your builder, including details of guarantees, payment schedules and completion dates. They will probably provide a contract, but you can ask for changes or even provide your own. Whichever you choose, make sure it covers everyone’s needs and involve your lawyer.
A home and land package contract will not likely include a specific timeframe, and it would be prudent and important for you to clarify same with the builder (and if possible) perhaps ask him to confirm dates in detail. Most building contracts would provide the builder a measure of protection when building timeframes are not met and if it is caused for example due to product not being available or due to severe weather conditions.
4. Check Warranties And Guarantees
Find out what warranties will be able to be transferred to you as purchaser on settlement and also check and ascertain whether a building guarantee will be transferred to you on settlement – ie for example most newly erected dwellings carries a standard 10-year Masterbuild guarantee. Ask for a copy of the guarantee so that you could peruse same and ensure you are aware of what would be applicable (or not). Your solicitor would also be able to advise you in terms of same.
5. Confirm Materials, Colour Schemes And Appliances
Usually a building contract would contain and should contain a specification schedule which would set out what building materials will be used, what brand of appliances would be present at the property and also confirm the colour scheme. Check all these to ensure you are happy with what is being proposed. If not and you require amendments, try to get these amended (at no extra charge) during the consultation stage. Usually if you decide you want upgrades it will be at an addition cost to you and to eliminate additional costs it would be prudent to address any such upgrades as the initial stages.
6. Investigate The Builder’s Reputation
Check out the builder’s reputation and also ask for confirmation in terms of public liability insurance held by the builder including confirmation of contractor insurance that will be put in place in terms of the subject building works being undertaken.
It is also a good idea to do some research into the building company, this could involve obtaining independent references of previous clients and checking online for any negative press.
Above is only but a few points that you will need to consider and for that reason we would suggest that you obtain professional legal advice prior to committing to anything on paper – ie prior to signing any agreements/contracts.
If you are looking at purchasing a home and land package and are after some guidance, Yolande would love to help.
AS A SPECIAL OFFER FOR FIRST HOME BUYER CLUB MEMBERS, MCVEAGH FLEMING WILL PROVIDE AN INITIAL CONSULT FOR $90 THAT IS ONLY PAYABLE IF YOU DON’T END UP USING THEM FOR YOUR HOME PURCHASE.
FOR HELP WITH YOUR HOME AND LAND PACKAGE CONTRACT PLEASE CONTACT YOLANDE SNETLER ON (09) 966 3605 / EMAIL: YSNETLER@MCVEAGHFLEMING.CO.NZ