Buying Land

turtie22 · Jul 17, 2007 2:04 pm

Hi,

I'm coco. It's the first time i'm posting in this forum. I have been reading a lot and learning frm everyone here.

My partner and I are considering buying a block of land and building the house that we want in the western part of Melbourne. We're first time property buyers so we totally have no idea what to do.

We are keen to buy this block of land which will be released for sale by the developer in the coming weeks. It was stated that on the day of release, the contract will have to be signed and a 10% deposit to be made in order to secure the purchase of the block.

I have a few questions which I hope someone in the forum could provide some advise or comments:

1) is a 10% deposit common? I have looked at other estates where the developers are only asking $5k for deposit.

2) is a contract usually signed on the day the land were released for sale? can i ask to take the contract back for a solicitor to review before we sign it?

3) can i ask the developer if i could place maybe a $1k deposit and ask them to hold the block until my partner and i discussed it over properly and confirm that we want the land.

4) can i add in the contact that the purchase of the block is subjected to favourable soil tests results?

Any comments or advise will be greatly appreciated. This forum rocks!

many thanks,
coco

Amber · Jul 17, 2007 2:40 pm

wow. we got a good deal obviously and only had to put $1k on as a deposit to hold the block until settlement.

i would definitely be questioning this but then again maybe it depends on who the developer is.

lots of other people on here have bought in the West so it will be interesting to see what they had to do.

good luck :-)

rellie · Jul 17, 2007 2:45 pm

We are also building in the west of Melbourne.

We also only had to leave $1k as deposit until settlement. They did require confirmation from the bank that funds were approved/available for the purchase.

vanderlay · Jul 17, 2007 2:59 pm

turtie22

1) is a 10% deposit common? I have looked at other estates where the developers are only asking $5k for deposit.

2) is a contract usually signed on the day the land were released for sale? can i ask to take the contract back for a solicitor to review before we sign it?

3) can i ask the developer if i could place maybe a $1k deposit and ask them to hold the block until my partner and i discussed it over properly and confirm that we want the land.

4) can i add in the contact that the purchase of the block is subjected to favourable soil tests results?

Any comments or advise will be greatly appreciated. This forum rocks!

many thanks,
coco

1) 10% is pretty common for many real estate transactions, though as you have seen many developers selling many blocks in a development will allow less than this.

2) You can take the contract to be looked at by whoever you want...dont be rushed if you arent sure of anything in the contract - the sales person will put the pressure on by saying you might miss out....but if in doubt, have it looked at by a professional!

3) Yes...they should let you put a small holding deposit on the block...

4) Yes...again, dont them pressure you or say we cant do that....make sure the wording is how you want it - not just a standard wording they use. Putting this into a contract saved us from buying a block that would have had about 30k in site costs.

Good luck!!

ewan · Jul 17, 2007 4:43 pm

In regards to Q4, you can also put more conditions onto the contract than that.

Such as subject to crossover, if your land doesnt have one.

But the more conditions you put on it, the slightly more complicated it gets.

Furthermore, definately put the subject to soil test on the contract. I've seen site costs above 30K before.

turtie22 · Jul 17, 2007 4:58 pm

thanks everyone for your comments and advise.

ewan, pardon my ignorance but could you explain what is a crossover?
also, it is better to get a block with no easement?

i think i'm hopeless! hahaha.... but i'm learning a lot from everyone's experience.

turtie22 · Jul 17, 2007 5:01 pm

thanks everyone for your comments and advise.

ewan, pardon my ignorance but could you explain what is a crossover?
also, it is better to get a block with no easement?

i think i'm hopeless! hahaha.... but i'm learning a lot from everyone's experience.

vanderlay · Jul 17, 2007 5:05 pm

Yes...its better not to have an easement, but its not necessarily a problem if you have one. You wont be able to build over it, and anything you put on may need to be dug up one day if access is required - pretty uncommon though.

A crossover is where you drive over the gutter/footpath onto your block - ie where the concrete slopes down to the road and across the nature strip etc.

sneakersss · Jul 17, 2007 5:29 pm

From what I have seen before I think when they ask you to sign on the day and put a big deposit down is usually when the developer releases the land for the very first time. I think on the first day you can get a really good deal by being able to bargain a really good price and/oror they only offer that price for that day. Hence they want you to sign and put a deposit so you can't change your mind.

But we only put a $500 holding deposit. Then the rest of the 5% just before settlement.

stonecutter1309 · Jul 17, 2007 5:37 pm

Even if the contract must be signed on the day the land is released - ask if you can get a copy of the contract before hand to take to your solicitor.

We have paid a $1k holding deposit (as we purchased in a pre-release). When the land is officially released to the public, we must pay 10% on exchange of contracts. Then 6 months later at settlement we pay the remainder.

turtie22 · Jul 17, 2007 6:44 pm

yes the land will be released for the first time. i was attracted to a particular block cos i like the location.... it's just opposite the park. and i like the street name too! haha... my nickname is coco... and the street name is coco ave!! *please dont laugh at me*

anyway am not entirely keen on it cos of the street name only. my partner and i have been looking around for land recently, so coco ave got us excited abt it.

i called up the agent to arrange for an inspection this weekend. he told me that he has several inquiries abt the block i was interested in. anyway we can't afford the 10% deposit at this time. so if we are really keen on getting that block after the inspection, i might ask if i could put a smaller deposit. if i can't then i'll have give it a miss. can't possibly buy under pressure or on impulse.

Vlad76 · Jul 17, 2007 6:48 pm

turtie22

can't possibly buy under pressure or on impulse.

You're right about "under pressure" bit, but IMO there is nothing wrong with buying on impulse, when it comes to your home. Not so with investments, as you have to calculate the return carefully etc, but with your home, it is a place you will keep coming home to for years to come, so the way I see it, sometimes it doesn't have to be done by the book.

Nothing wrong with a bit of emotion attached to it. Properties appreciate over time, and even if you overpaid a touch for the block you really like, it will not matter much in 10 years time.

off2theburbs · Jul 17, 2007 7:05 pm

We only had to pay a $1000 deposit for the land and the rest was paid at settlemnet. Sound like we got a good deal. We just made it conditional to finance meaning if the money for the land and house fell through that was it and we got our deposit back.

Cookiemonster · Jul 17, 2007 7:24 pm

turtie22

he told me that he has several inquiries abt the block i was interested in.

This is a common ploy by agents to get you to commit. Use your head and your heart but don't ever be pressured to make a decision.