HELP!!! Buying Untitled Land

My partner and I have just put down a $1,000 deposit on a piece of land here in NSW.

We have been told the next step is that contracts are drawn up, we have a couple of weeks to review them before signing them and "exchanging". On exchange, we have been told we will need to pay a 5% deposit (roughly $10,000).

However! A construction certificate is yet to be issued (have been told in the next week or so) and the land isn't due to title until next year (possibly January but who knows).

What concerns me the most is the contours on the block. The block at the moment has a 5m slope down across the block (which is 18m x 30m) and whilst the sales agent says it wont get any steeper and they are going to try and level out the blocks when the put the roads in, there is just no way of knowing at this point what the final contour of the block is going to look like.

Because of this, I can't get anyone out there to provide me a quote for a house AND I have no idea what site costs I could potentially be up for.

My question is, how can they possibly take a $10,000 non-refundable deposit on a block of land that no one really knows what is going to look like? We are first time owner builders but common sense tells me I am missing something.

Untitled Land is a minefield.

With that sort of slope you are likely to be up for site costs well in excess of $30,000.

Another thing to consider is you should look to require the deposit to be refundable if the land is not titled by a certain date. Titles have a way of dragging out for many months particularly if the block are difficult to sell because of potential high costs.

Thanks bashworth for your reply.

Whilst we are not too stressed about getting a house on there quickly (more time to save and decided on a floor plan) we will have a sunset clause put in the contract.

Are you able to tell me whether it is normal to put a non-refundable deposit down on a piece of land without knowing what the final contours will be?

It wouldn't surprise me but I have only ever bought titled blocks as easier and quicker.

Hi,

I'm not sure about others, but for me I found this quite normal.

I've exchanged contracts and paid 5% deposit on land that will title April next year. I did this on purpose as I needed more time to save for the build.

That being said, my land is quite small and very flat. I've already spoken to three or four builders who were able to look at the plans and give me fix site costs around 5k-10k.

There may be some changes before the land is ready, but the builders seem pretty comfortable in setting a price on site costs. See if a builder can look at the plans and give you a rough estimate maybe?

I'm about two weeks from signing my building contract, though we won't be building until April/May. We do have sunset clause on titles, I think its 24 months.

Your situation sounds trickier, because you already know the land is sloped, I think you have to go off what the land is now, not what the developer "may do". If they level it, great, but don't count on it.

I bought unregistered 2 months ago, they wanted 10% deposit of $22,200 however my solicitor negotiated that down to 5%. The land is due to be registered in February however they are currently ahead of schedule. It's a gamble, you get the land cheaper however it may drag out for weeks, months or years.