I am looking for my next investment property number 2 , I am looking for a house and land package, I would like some advice on anything to look out for and tips.
1.how long is settlement date for house and land package.
2. What happens if the builder does not finish in time for settlement?
3. If I buy directly of the builder is there a cooling off period? (property in Brisbane)
4. They are wanting $315k for the property ( 3 bed, 2 bath, 1 garage), I would like to buy it for $295k, should I come in with an offer of $280k?
5. What are the steps when buying a package?I hope I can learn from other members..
Jason
<u><i>Originally posted by Rexilla99:</i></u>
I am looking for my next investment property number 2 , I am looking for a house and land package, I would like some advice on anything to look out for and tips.1.how long is settlement date for house and land package.
2. What happens if the builder does not finish in time for settlement?
3. If I buy directly of the builder is there a cooling off period? (property in Brisbane)
4. They are wanting $315k for the property ( 3 bed, 2 bath, 1 garage), I would like to buy it for $295k, should I come in with an offer of $280k?
5. What are the steps when buying a package?I hope I can learn from other members..
Jason
Settlement depends on the builder, although traditionally I think you will find you will purchase the land followed by 5 or 6 “Progress Payments” or “Drawdowns” on you loan at each stage of the Construction Period. This depends on your builder and the contract you sign with them.
2. If the builder doesn’t finish in time you may have some remedy under the contract for damages, although most give themselves about 6 months longer than they will need in the worst case scenario to finish the construction.
3. NO. New homes have no cooling off period in Qld. The land component will, but the contract for the Construction generally won’t.
4. You can try, but I doubt it would be effective. Unless the builder is about to own the land and he doesn’t want to your chances of negotiating the price down AND retaining the full package are about the same as me winning the 100m sprint at the Olympics…
5. Same as when buying anything else.:
1) Homework, Research, Everything.
2) Ensure the investment is RIGHT FOR YOU
3) Obtain Funding for said investment
4) Negotiate (if possible)
5) Sign Contract
6) Pay Money
7) Inspect stages sign off on Draw Downs for Bank/Lender
Final Inspection – Collect keys, Give them to Property Manager, Make Money on Investment…9) Buy more investment properties and retire young…
Jason, If you wish to discuss in further detail, I’m more than happy to, let me know.
Stuart Milne
Non-Conforming Specialist
READY Mortgages
http://www.readymortgages.com.au
[email protected]
Mob: 0404 056 055Hi Jason,
Is the home already almost complete? Or are you choosing a block of land and then a particular house plan to go on the block?
I have purchased 2 house and land packages – both in Brisbane. The first home had the frame up when we put down a deposit. The second home was 95% completed when we paid our deposit. So I am only familiar with house and land packages where you see almost the completed product.
In my experience:
1. Settlement date – the builder or the agent acting on behalf of the builder should be able to give you a good indication of the finish date. However, they did note to us that there could be delays with completing the home.
2. Can’t really answer this as we were able to settle on time in both cases. Especially for the second home we purchased, the house was already 95% completed, so the indicated finish date had to be fairly accurate. If your house has not been started, then I would imagine there is a likely chance there could be a delay eg. lots of rainy weather could cause delay, or Council approvals can be delayed, all of which can delay the settlement date. Some builders (eg. Adenbrook), I believe guarantee their finish dates.
3. In my two purchaes, yes there was a cooling off period. I thought by law, all contracts for purchase of homes are subject to a cooling period (I could be wrong about this?). However, note that if you do back out of the purchase, there is apparently still some penalty involved during cooling off period. The penalty should be mentioned in the contract you sign.
4. Unfortunately, in my cases, both builders would not negotiate on price. We were a bit suprised but also found out that others that purchased in the area also had to pay the full advertised price. At least with the second house and land package, there was a stamp duty rebate on offer at the time which saved us several thousands.
5. Steps involved:
After finding the house and land package and deciding to go ahead, the steps then involved:
1. Got pre-approval for finance
2. Sign contract and pay deposit (5%-10% deposit). Contracts were subject to finance and building/pest inspection
3. Signed contracts were forwarded to solicitor and relevant searches were carried out.
4. Got finance approved after providing bank with the signed contract.
5. Builder notifies us that house is completed.
6. Building/pest inspection carried out (Bank may also need to carry out inspection if finance is subject to valuation of home)
7. Provide builder with building/pest inspection report – builder to fix up any problems outlined in the report.
8. Settlement date arrives – solicitor handles the transfer. You go and collect keys.Hope the above info helps. Good luck with your purchase.
Another tid bit to add is that you pay for the house and land package in stages of the build. The bank usually takes care of all of this. There are something like 6 stages (not certain on this):
1 buy land
2 slab poured
3 frame
4 lockup
5 fixtures & fittings
6 handoverFind out when each stage is due to complete and the rough amount you will pay at each point. Unless you have a different loan to the basic variable, you should only have to pay interest per month on what has been handed over to the builders up to that point. The first portion you pay usually includes your entire deposit.
Not sure what your getting but if it’s one level, brick with tiles then you’re looking at 5-6 months build. I’m buying a 4 bdr h&l package from a company called Kaizen property sales but there are other great mobs in Brisbane like Ozinvest, etc. I couldn’t neg the price down but the bank has valued it $10k more than the purchase price anyway, and I’ve heard it’s a common result with H&L packs at this time of year.
Originally posted by lil:Hi Jason,
Is the home already almost complete? Or are you choosing a block of land and then a particular house plan to go on the block?
2. Sign contract and pay deposit (5%-10% deposit). Contracts were subject to finance and building/pest inspection
I am planning to choose the block of land and build on it,
With the deposit is it mandatory for a 5-10% I? I rather have my money in my 1st property offset account saving me on interest.
Jason
Final Inspection – Collect keys, Give them to Property Manager, Make Money on Investment…
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