How to buy Land?

So as you can tell, we are first home buyers.

I have my eye on a block of land, am yet to convince my husband, but if I did want to buy it, what do I do? I have no idea where to start!!

We have always rented so no idea on house buying/building. I am scared about the whole thing but don't want to miss out on the opportunity.

Also, we are in SA.

Thanks in advance 😉

Hi Tash,

Congratulations on your desire to buy your own land and build.

We recently did this and it’s the best thing ever!

We were also first time purchasers but the process was super easy. Basically we just contacted the land sales office for the area we liked, found a specific block that we wanted which was available (yet to be registered but not far off). We then got the contract read and once we were happy we placed our deposit. The contract was subject to finance but in all honesty the whole process was fairly straightforward and simple. You generally will also need a conveyancer as well. Note: we bought in QLD, but I doubt the process is much different in other states.

You can also get Pre-approval from your bank / broker to determine how much you can borrow.

Good luck with your journey!

Thanks Nathan.

The block actually has a Real Estate Agents For Sale sign out the front.

I'm more worried about what do we need to look out for? I'm guessing the selling agents aren't going to tell us the negatives, so wondering how do I find this out? Do we contact the local council?

A good little tip for buying any property is to put in a Dial Before you Dig request on the block. They send you back all the known service's and easements on the land. Best thing is it's a free service.

Not at all an expert, just based on what I’ve learnt. You need to look out for anything that will increase your site costs or reduce resale value, this should impact the amount you’re willing to pay for the land.

- look at other sales in the area
- ask real estate agent if they know soil type, any easements/covenants, where the services/sewer is
- talk to a builder (some are willing to come out to the property, some can just give you thoughts based on satellite/council maps) or developer in the area (developer should know soil type and typical costs to develop land)

Things to watch for
- level of land and whether you’re higher/lower than neighbours. Stand on the corners and look, I would be wary of anything other than a gentle slope.
- shape of land, people prefer rectangular blocks
- frontage
- overhead power lines
- council trees (council in general never cut down trees)
- if you can figure out what the land previously was used for (my council maps had satellite pics for each year)? I looked at one subdivided lot and it used to have a swimming pool on it. Or if it used to have trees check that the stumps were removed.
- have a look at R codes, if it’s a battleaxe you’ll need to think about turning circles, otherwise have a think if minimum setbacks and minimum outdoor % will work for you (Mine is 50% versus a lot directly behind me which was 45%)

Which direction does the block face? Is it an average size? What are the neighbouring blocks like.

My number one pointer would be to choose a block that faces the right direction. As you really want to build a home orientated correctly, with living areas facing north.

https://www.yourhome.gov.au/passive-design/orientation

This is why a premium is paid for blocks with southern frontages. As living areas which face the backyard will face north.

Living areas facing north will be brighter, warmed by the sun in winter & shaded (by eaves) in summer.

https://www.yourhome.gov.au/passive-design

The perfect block - when all other things, like privacy, typography & views are equal - a wide southern frontage block. As it will have great access to northern light.

The other end of the scale, a narrow northern frontage block. Usually the garage will block much of the northern light from the home, & the living areas will likely face south, making them dark, & cold in winter.

An eastern or western frontage block, somewhere in between. Could be good, could be bad, depending on what's to the north. A large northern neighbour could overshadow the block. North facing living areas will likely face a neighbour in any case, reducing privacy.

The block faces north with neighbours all on the left and behind. The block is kind of triangular but with a flat back. The leftside of the block is a lane way which has garage entries for the rear of properties. All surrounding houses are single storey. This block is 910sqm and is quite large for the area. They are advertising for it either to be sold as one or 2 properties. But hubby would like a larger block.

There is also a meter box at the front left of the property.

Thanks for the info everyone.

How does it work with paying a deposit to hold the land? I was told it is fully refundable if we don't go ahead with the purchase? Is this true and how much?

Oops! Sorry neighbours all on the right hand side and behind.

Yes! Anyone can purchase land to build on in Australia, as large as their purchase is confirmed by the FIRB (Foreign Investment Review Board). Usually, this is very easy to obtain and will rely on you buying to complete the construction within four years of buying the land, and on providing proof of that finish within thirty days. Remember that if there was a house on the plot, even if it’s a ruin, it doesn’t include as free! In that kind of case, you’d just need to apply for a household redevelopment investment.

Another thing you should do is speak to a few builders. Most will be able to tell you the site costs in the area you are looking at. They can also tell you what size house you can build on the land. Also many conveyances will look over section 32 for any red flags for free.

Thanks for your help i really appreciate that great tip.. thanks again

When looking for a block to build I think you have a great opportunity to plan for a passive solar design. I would highly recommend looking into ddarroch's post and the yourhome link. Learn the basic principles and let this guide your decision on buying a block. Some sites are very unsuitable for an energy efficient house and consequently it will be an uphill battle to design a home that is not grappling with hot and cold temperatures throughout the year (not to mention costly). You will also be much more comfortable in a passive solar designed house

What ddarroch has said is key. Also look for potential shading from large trees or buildings that will block any northern sun in the winter. Also look for any potential shading from the east and west that could be a benefit in the summer. We said no to a block simply because it was very likely that the single storey house to the north was going to be knocked over for a block of townhosues (as most sites were on that street).

Don't be afraid to go and spend time at the block at different times of the day. This is an opportunity that you can't usually get with buying an existing house. You can really test out what the neighbours are like.

The other things I would advise is to get a report on any easements or encumbrances that may affect what and where you can build. Also a soil report may be worth the upfront cost as it may turn out that the soil is very reactive or perhaps contaminated. I was lucky in that the previous owner had already had one of these done. It was an extra reassurance that the soil was sound for building and for growing things. Ask the agent if there are any reports or even building plans that the previous owner may have had done. The council is another area to consider. They may have strict building restrictions and you could end up having to build something that is different from what you intended.

This is all time consuming but dilligence now can save you a lot of money and stress in the future. You can also end up with a very comfortable and livible home

Thanks everyone for your advice.

I was more after advice as to how to go about the actual purchase.

Do you just start with making an offer? Ie. If you want to pay a lesser amount than what is advertised.

How do you put a deposit down? Eg. Who decides how much? Is it refundable if you decide not to go ahead?

How long is it held until you must pay balance?

Does the deposit have to be made in person by both buyers, eg. My husband and myself?

Thanks again in advance

It's the same as an established house.

If you think you know what it's worth and are willing to make an offer, just ask the agent for a letter of offer. On that, you specify a price and usually other details like preferred settlement period and if the offer will be subject to anything like getting finance approved etc. You should also be able to nominate a deposit (only has to be enough that you wouldn't easily let it go. Doesn't have to be a set %). You only pay that deposit once the offer has been accepted, you have signed a contract and the cooling off period has ended (can just transfer to the agent's trust account). That then gets used as a part of your payment AFTER settlement has finished.

You are not bound by an offer. Even if they accept you can just tell them no thanks.

It's up to you what strategy you take with the offer. Agents are incredibly deceptive people and will spin you all sorts of nonsense to get you to offer more. But as the buyer you never really know.

Good luck but make sure to do your diligence as well.

First thing I would recommend show the section 32 to a conveyancer who can check for red flags and advise you. Deposit is usually $1000 and make the contract subject to finance if you are getting a loan. You are best to contact a conveyancer as soon as possible, they should be able to guide you. Usually you can nominate a settlement period of say 4 weeks so you have that time for the bank to approve the loan. That is for titled land if you buy untitled land from the developer it works a bit differently.