Can you negotiate house and land packages?
- Written by NewsServices.com
A brand-new home is something that everyone wants, especially new home buyers. There are many financial incentives for those that purchase house and land packages. Many Australians opt for loans to construct a new home and house and land packages can offer an option that is not only affordable but also hassle-free. We will discuss the many pros and cons of this option if you are looking at a house and land package.
Affordability Makes House and Land Packages a Great Option
House and land packages can be an affordable option if you are looking for a home and really, why not purchase this option and build a new home from the ground up? This offers you the option of having 100% input at every stage of the home being built. There is also the option of the “turnkey” package where you can purchase a home that has been built on a lot of your choosing and all you do is move into that home. These homes are usually pre-built, but there is also the option of the vacant land and then the home being built.
Both options are affordable and allow you to enjoy the benefit of a new home. There are so many options for lot sizes and the combination of house and land as a package. When you purchase land first and build on it you can save money on the stamp duty since that duty only applies to the value of the land you purchase. The First Homeowner Grant is another money saving option that is only available for homes that are newly built.
Paying for your new home means more than just providing a deposit. Along with the purchase price, there may be extra costs arising and those who are purchasing a home must factor those extra costs into their budget. There are costs such as legal fees and certain building standards that must be met. If you are purchasing the land, then you may be eligible to certain concessions on the stamp duty.
What are the pros and cons of a House and Land Package?
The house and land package are a very good option when you are trying to purchase a home. There are some pros and cons, though.
Hidden costs – you may enjoy touring the display home, but these are for show and probably include a lot of extra options that you would need to pay to obtain. You will want to check in with your builder to see exactly what is included in the price that is quoted to you, so you are able to understand what you are purchasing with your money.
Potential for Costs to Blow up – when you purchase a house and land package it is an opportunity to customize the home to suit your specific needs and tastes. You want to ensure that your budget will handle all those extra costs that you will need to pay to get what you want.
Smaller Lot Sizes – lots sold in house and land packages continue to become smaller over time and that means that the average lot size is much smaller. This is how house and land packages are kept on the affordable side, but you want to know that your new home is built on your land in a way that utilizes it the best and ensures your total privacy.
Location Could Increase Transport Costs – most house and land packages are offered in suburban locations and that means that you may have a longer commute if you work in the city. This will add to your transportation costs and if public transit does not come into your area, then you will need to factor in the cost of travelling to a park and ride.
Negotiations for House and Land Packages
Getting a pre-approval will allow you to know what you can afford when it comes to house and land packages. If you think that this is the right option for you then you should look at what you can afford before you start looking around at areas that are out of your price range.
Once you have a base number you can have a better understanding on what you can afford to spend on the home that is being built for you. Home loan pre-approval is a good option because it gives you a better idea of what your budget is for the design and customisation of your home. This will allow you to ensure that your home his personalized to your tastes. A mortgage broker can help you to find a home loan that suits you and is competitive. It is a very big step to sign up for a house and land package. When you understand what kind of financing you qualify for, it can help you to decide on the package that works best for you.
Home and Land Packages – First Time Home Buyers
As a first-time home buyer, looking at home and land packages is a great option, and you can purchase your first home for as little as 5% down with the First Home Load Deposit Scheme Guarantee – but this only applies to new homes. Purchasing a house and land package under this scheme means that you will need to start building in the first six months after you enter a contract and complete the build within two years of the start of that contract. You must move into your new home within six months of the issue of the occupancy certificate.
If you look around at the options for house and land packages, there is some room for negotiation and when you are pre-approved for financing you have some clout because you can close a deal quickly. Most builders do not want to wait around for a buyer to get their financing in order, so this provides many advantages including your negotiation power.