Buying land or a land and house package in Australia is exciting, but there is paperwork and due diligence involved before you can pop the champagne to celebrate.
If you’re buying, it can be such a relief to find a solution that works for you, and you may feel tempted to add your signature to the contract without a second thought. However, it’s crucial to pay close attention to what you are agreeing to.
Before you purchase land or a home and land package in Sydney or elsewhere, take a look at some must-know information about exchanging contracts.
1. Read your contract carefully
A home and land package in Sydney or elsewhere gives you a vacant block that is ready to build on or will be ready to build on soon. Generally, you will sign a contract for the land purchase and one for the builder to complete the construction work. These are separate documents, even though you are paying one price as part of the package.
If you are only buying the land, you will only have to deal with one contract until the time comes to build.
Land only contracts
The list below shows some of the key items included in a land contract:
- The conditions of the sale. This should include financing information and necessary inspections and the dates they must be completed by
- The names of both parties
- The date of the contract
- The address of the land
- The deposit amount and when it must be paid by
- The sale price
- The settlement date
- Whether or not the land will be vacant at the time of settlement
- If you need to start building your home by a particular date
Keep in mind that the contract is a lengthy document and will also include other information, such as taxation details and financial information. It may also have sections for foreign investment approval or other variables depending on the sale.
Ensure you read through your contract thoroughly and consider any clauses you may add.
Construction contract
The contract for the construction of the home is called a Home Building Contract/Agreement.
When you buy a land and home package you will need this contract and the land contract described above.
You should read over this contract just as carefully. It is more complex than a basic land or home purchase because it involves construction work over an extended period of time. For a thorough list of what to expect from a Home Building Contract/Agreement, head to the Fair Trading NSW website and review their checklist to make sure you are ready to take on a contract.
The checklist includes essential points like ensuring your builder is licensed and insured and that they represent a reputable new home construction company with a strong performance history. You should also take the time to review things like cost variations, builder warranties and what will happen if either party decides to terminate the contract.
Some contracts specify a fixed price for the build, others don’t. This is something to check carefully; you don’t want to end up spending more than expected or end up with a bill you are not prepared to pay.
2. Understand the cooling-off terms
Technically speaking, there is a five-day cooling off period before a contract of sale goes ‘unconditional’. However, this is often waived in NSW with the help of what’s known as a Section 66W certificate.
Before you sign as part of a buying agreement, be aware that if Section 66W applies, there will be almost no option to back out and reclaim your deposit. In this case, it’s best to arrange a building and pest inspection before you have your offer accepted rather than afterwards.
You may be able to negotiate a five-day cooling-off period, but this allows the seller to back out as well. If either party changes their mind during this time, a small fee will apply.
3. Time is of the essence
The Sydney property market is competitive at the moment, and there are lots of interested buyers looking for homes. For this reason, you will be expected to sign your contract reasonably quickly after having an offer accepted. Set aside some time in your day to give this task your full attention to avoid overlooking any important details.
4. Professional help is essential
It makes sense to have a licensed conveyancer or solicitor to help you sign your new home or Sydney house and land package contract.
This expert will be able to look closely at documents including the plans and site specifications. They know how to spot red flags like a deck or swimming pool isn’t up to code.
A professional can also help you add clauses to the contract and take the right steps to ensure that your builders are above board.
Want to buy land or a house and land package in Sydney so you can build your dream home? Talk to Landen today.