Where do you start??

I'm really sorry if there are other threads about this, but if there is, please feel free to point me in their direction!

I'm basically wondering where to start regarding building a house? I mean, other than the financing, that's a whole other story. *lol*

Say you have a budget, a location in mind, and a house layout suggestion. Who do you approach first? Do you go to a builder that does house and land packages even though they don't offer the floorplan and location combo that you want? Do you go to someone who sell land and house plans separately, if this option even exist? Or do you approach land sellers and house builders separately; if so, which one first? Can you approach a house builder with a floor plan and ask for a quote? Do you need finance or loan pre-approval sorted before building and/or land companies will take you seriously?

Are house and land packages necessarily much cheaper than buying them separately?

I'm in Brisbane, and we're wanting to built north or west, preferably Fernvale or North Lakes. Can anyone recommend builders and/or land sellers for these areas?

It's all so confusing!!

Hi MalinViktoria,

Welcome to the awesome forum!

The quick answer is, everything, everywhere and everyone is different. Most people have different experiences with the whole building process and it's different in each state and different building companies offer different things. I was able to put an offer on a block of land separately, and then build with my builder who was offering "house & land packages". But not all building companies are the same.

Not helpful? Yeah, sorry about that. And you are correct, many people have asked the very question you are asking. There is a forum search function, so they shouldn't be too hard to find Sorry I don't have links for you, it's a bit tricky to do that from this iPhone app (maybe not possible)

I'm in WA. I freaked out about the whole building process order. Do I find a builder first, or get a finance pre-approval first? After the initial anxiety, you come to realise that people at building companies, banks, land sales offices are all really keen to help (wonder why) and aren't as harsh as you'd expect. The most valuable resource for answering your questions on the whole process is this very forum!!! Well done for finding it!

Good luck!

We started with our land, designed our own house - with the assistance of a draftsman, then put the job out to tender with half a dozen builders.

It's up to you how you want to proceed, if your options are open then finding the perfect place to build would be a good start, then depending on if it's a package deal take things from there...

Good luck!

We purchased our land (our land is 1/4 acre so knew we would not have any problems fitting any size house on there) then found a house design we loved.
If you will have a small block I would look at house designs first as you would hate to find your dream house only to find it won't fit on your block.

Thanks everyone! Sounds like it's a very individual process indeed. A few more questions...

As far as buying home and land packages, is doing this any cheaper in terms of $$, or is it mostly convenience? We don't have a big budget, we need to fit everything under $300k, so we're really looking for the cheapest option.

Also, I keep seeing people talking about different companies; is there a list anywhere of home builders and/or home and land package companies in QLD?

Lastly, I've been told that it's a good idea to stay away from the largest companies because they tend to take longer to build the houses; is this something people in here agree with?

Hi,

We bought a house and land package (in SA) last year and the total cost was $296K (after selections and footing variations) so it is doable. To keep it to a budget you either need to be flexible with your requirements or have the patience of a saint.

In terms of what is cheaper there is no real general rule it is strictly about what is available, but remember there is always wiggle room in the price of land.

They will always offer the combination you want, constraints excepted.
But if you find a plan you like, and you have a block, and it will fit (and there's nothing legal preventing it being built), they'd rather have your business.

My advice is to just start looking at displays. Enough of their sales people will rope you in to sitting down with them to tell them what you want - you'll eventually get given enough options. You can certainly go to them and tell them "I want this style of plan" or "I want three large bedrooms and a study" - they'll be able to tell you what they have available.

You don't need a full pre-approval - I didn't when I did mine, though I had at least gone through the online instance pre-approval things to give me an idea where I sat. I would recommend you at least sit down and go through that so it will give you an idea.

The other advice I'd give is tell them about 5-7% less than what you actually want to spend. Eventually, when you add options, you're going to eat in to that buffer.

You have to be fairly careful when buying house and land packages they can be cheap but there can be some downsides especially if you are going to live there rather than rent it out. You may well find that all the other houses are rented out so the neighbours may not be as interested in keeping the street as nice as you are. there are a few other thoughts at my blog here:

http://www.anewhouse.com.au/?p=996

I think house and land is more for convenience rather then it being cheaper.
Ask your local council for a list of builders as they will let you know who they deal with meaning you know they will build in your area. A lot of volume builders just send out info and don't bother to check if they build in your area before they post it , so if your unsure get them to check.
I would have thought volume builders would be quicker then smaller builders, ours should take 5 months plus they had a month off over Xmas.

I would not have really thought it would be cheaper as house and land packages are usually still two contracts so you are buying available land from a vendor and then contracting a builder to build on it.

Thanks everyone!

Okay, so I can see how it's more about convenience now. However, I have another question about land that just occurred to me as I was reading through some other people's building experiences... Once you buy land, there is a bunch of stuff they need to do to the land before it's ready to be built on, is that right? Which is why it takes months for people's land to settle before they can build on it? So when you buy land in a package, the land is already prepared and ready for building, is this right? But when you buy land separately, it's not? I guess the main problem for us is that we can't afford to keep paying rent on top of land interest for months and months even before the house has started getting built... Can you buy land that is ready for building straight away?

I'd always start with the block of land first - it's the one thing that is A) in short supply and B) dictates what sort of house you are going to build.

Have some house designs in mind when you start as well - don't just settle on one design right from the start as it may not be the best for the block you eventually purchase.

From there explore both buying your own block and getting a builder to build on it and purchasing a house+land package from the builder.

Bear in mind that the builder takes a profit margin on everything so you might end up paying a bit more for a block of land in a house+land package than you would buying the land yourself, but that can be offset by the bundling together that most builders do in house+land packages.

In the past some builders haven't even required the customer to make the progress payments that would be scheduled in a normal build, meaning essentially that aside from the deposit there were no progress payments until the end of the build - I'm not sure if that's still the case nowadays with the tighter financial circumstances we are currently experiencing though.

As for purchasing land that is already titled vs purchasing land "off the plan", well you're paying a premium for land that is already titled and the cheapest price for a block is usually going to be when the stage that it is in is first released.

It's a gamble either way, but if you cannot afford loan repayments while you are paying rent then you need to give some serious thought as to whether you are in a position to enter into a house build or not.

I'd probably suggest starting with a mortgage broker and working out what you can and cant afford.

Personally I'd also recommend steering clear of the seemingly attractive "you don't need a deposit" offers as they have often a sting in the tail and if you genuinely can't afford to save for a deposit while paying rent then you're going to be under mortgage stress almost right from the start once the mortgage repayments kick in - your mortgage repayments will be higher than your rent in most cases (for example our rent is about $1600 a month, whereas our repayments on a $350k mortgage are around $2300 a month).

You're much better of having a significant deposit (20% would mean that you avoid having to pay mortgage insurance premiums) and some extra cash to work with after the build is complete (and you will need cash for things such as fencing, landscaping, service connections, etc after the house is finished)

Thanks, that's useful information!



First of all, waiting until we have a 20% deposit isn't an option for us, but we're definitely not going to opt for a no deposit option either. We're hoping to have 10% + a little bit extra for things like landscaping, etc.

Secondly, we know we will be able to make the repayments; when the house is built our repayments would be about $2,000 a month, but as far as I've researched, the last few interest repayments before the house is completed would be around $1,600-1,800, and plus our rent of $1000 a month, that's going to be a bit tricky (that's $600-800 more than we'd be paying in repayments). And I'm not saying this will be impossible for us, but in regards to my previous post about time of land settlement, etc, the longer it takes for everything to be finished, the more money we pay, and obviously that's not an ideal situation. Most people I know never had to go through this because they either had family they could stay with for free while their house was being built, or they bought an existing house first and then built. Anyway, if the whole process took 6 months, that would be fine, which I believe is the case with house and land packages, but I was wondering if it would take longer if you're buying land and house separately due to preparation of the land before you can build on it.

Let's brea this up into the different topics.

Finance:

One thing you may not be aware of is that you'll be paying interest only repayments until the construction i complete and the land loan/construction loan are consolidated into a single house mortgage.

We have drawn over 90% of our loan now and our interest-only repayments are about the $1650-$1700 mark (remember that our normal repayments are going to be around the $2300 mark).

If you're worried about being able to service the mortgage towards the end of the build then you can either A) make hay by saving your butts off now and have a little extra to throw at the repayments towards the end or the build or B) go for a house+land package where scheduled repayments aren't required until the end of the build (if indeed builders do still offer those types of deals as was the case a couple of years ago).

It's good to hear that you'e going for a 10% deposit, but you will need to factor in a bit extra for mortgage insurance as you'll be above the 80% LTV threshold - be prepared for at least another $5-$10k worth of stuff you might need to get done after the build (unelss you go for a "turn-key" package with a volume builder that includes most o the extras you would normaly sort out after the build, but at a slightly higher price).

Land:

It's basically a case of first in-best dressed. Titled blocks tend not to stay on the developer's books for long as they shift their focus to selling off the plan for the next stage(s), so even in many house+land packages you will more than likely be buying "off the plan" anyway to some degree.

Be a little wary of blocks that are already titled - do your homework and see what similar sized blocks are selling for in the new stages of the development you are looking at and try to get an idea of the "off-the-plan" prices that people were paying for similar sized blocks in the stage the block you are looking at was part of if you can.

Real estate agents trying to sell you a vacant titled block will be jacking up the price a bit (after all they need their commission and advert costs covered too), but that issue can be trumped if it is the "perfect" block for your house design in a location you like and you're happy to pay a little extra for the block and the convenience of already having titles.

dont count on the entire process from signing up with the builder to completion only taking six months

My advice to you is that make sure you have more than enough for your budget in first place, ie:a comfortable zone of 5%~10% for the price you going to pay for the house + land as you can always assume something will pop up here and there where you will need the extra money for it. And you better think about delays etc.. as it does happen often. Especially for land that need to be titled for subdivision. Sometimes that can be long than you think.

Buying land + house package surely is convenient. Getting them separately will give you flexibility and sometimes surprise. SO good luck on your search

Thanks for all your helpful comments, everyone! I would love to be in a situation where we have about $15,000 left over after we sign the contract and pay deposit, some for upgrades we'd like for the house, and some for extra rent money if the building process takes longer than expected. Definitely need all the luck we can get! I'm working 2 jobs at the moment just to help us save up, but we're still almost $20k short.

Don't be too scared off by this. Seeing 'interest only' looks crappy at first until you run the numbers. Just be sure to get a home loan that has 100% offset, and it works out massively in your favour.
For example, I have to pay (OTTOMH) $380/ftnight for the land only during the construction phase, as interest only.
But I'll be in the habit of putting aside a full $1,000/ftnight.
That extra $620 accumulates as an amount that won't accrue interest.

That has three things in its favour.
1. Less interest is paid on the overall loan.
2. The interest rate is higher than the high interest savings account rate, so in effect it's saving me money.
3. By putting the 'final' amount aside rather than just the 'required' amount, when it gets to the end of the loan I'll have a massive pool sitting there not only not getting charged interest, but to act as a buffer/emergency amount if/when needed.


One other thing to just make sure if to not get too optimistic in either the house size, land size, or land proximity to the CBD. Those are the three things people get carried away with.
If you're happy to buy a 16sq single garage place on a 10.5x25 block a fair way from the CBD, you'll easily get it in.

Rule of thumb, add about $40-50k for developer costs, site costs, and required extras over the 'list' price, then add your land.
So if you took a basic Henleeeeeee place at $134k and add $45k, you've got about $120k to play with. That's not a lot at all for land
But you get the idea. Plenty of places will build small houses for just shy of $100k (Dennis come to mine), just check what they include.

What cmhamilton says is really good - but I really agree on two things:
1. Buy the land first, because that dictates what you can build and
2. If you can't manage 20%, and will struggle with mortgage payments while not living at home, maybe consider whether this is actually an affordable exercise.
IMO, Banks even allowing LVR<80% mortgages is just irresponsible

TBH you cannot really be budgeting all your available funds for a build with no margin for blow-outs or unforeseen incidents as it could end well and truly in tears and then some.

Like I've said a couple of times, we are planning on saving up for the extras that has been mentioned.