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 Home    First New Home Buyer Question Time

Hi All

I’m constantly being asked the same questions from people entering the new home for the first time. There is of course a plethora of information on the net about this subject but there is also an abundance of misinformation as well. For the purposes of this blog I will concentrate on the top 5 questions that relate to purchasing a House and Land package (H+LP) as a first home. I will cover “Contract Builds” in another blog as they have there own specific questions.

Its fair to say that every builder has their own way of packaging house and land so I will try and cover some of the broader questions that relate to most builders. I will also point out some pitfalls that could potentially cost you thousands if you don’t do your homework.

1. Is this a fixed price package?

This is by far the most common question I get when it comes to H+LP. There is no simple answer to this one. Technically speaking and if we lived in a perfect world, then yes, it is a fixed price BUT there are a few variables that may cause the price of a H+LP to change from when initial deposit is made to final total of the package.

The biggest issue to affect fixed pricing these days is land registration. I would say that at least 90% of packages on the Sydney market are being sold off the plan on land that is yet to be registered. Whilst the land may be DA approved by council, the developer would not have completed the civil works and therein lies the problem. When developers or agents make agreements with builders to package up land, they are given an”expected” land registration date. From experience this date is rarely accurate and usually you can expect another 3-4 months after the initial expected date.

So where does this fit in with pricing? Quite simply we cannot fix the price for ever. We can only rely on the information at hand and price accordingly to a specific date. We are constantly (along with all other builders) being hit with supplier and contractor price increases which unfortunately we have to pass on once we have reached the fixed price date. We pass this on as a monthly percentage until registration occurs. We feel this is a much fairer system than building an extra 6-8-10-12 months of price increases into the package from the start that, more than likely, will not be required. Pricing of this nature could have you paying $8,000 to $12,000 more than you needed to pay on a package……..possibly more!

Another factor that can change a “fixed price” package is site costs. This once again could have the potential to cost you thousands more if you don’t find out at the start if the builder is paying ALL site costs. Jandson cover all site costs in our packages regardless of what we find once we take possession of the site for the purpose of construction. Check the building contract first before signing anything or paying any large sums of money.

Question your sales consultant on specifically what inclusions you will be receiving in the package and what you will not. This can have a huge effect on final pricing. Inclusions will vary dramatically between builders as some builders will put the bear minimum in so they can maintain a low price point in the market but the reality is you are going to have to put money back in to bring it to the level of a liveable home. Things like pre-ducting for ducted Air Conditioning in two storey homes needs to be considered if your package does not include A/C. It is VERY difficult to put in once the construction has finished.

Check the building contract and make sure the builder has made provision for possible site conditions such as B.A.L (Bushfire Attack Level) and if so who will be liable for the additional costs/items required to satisfy specific B.A.L levels. This once again can be costly.

I can’t stress enough that you need to engage a legal representative to read the building contract VERY carefully so you are fully aware any additional costs that you may incur. As a side note I would recommend using a Conveyancer rather than a general Solicitor took look over your contracts. From past experience they tend to be more thorougher as its their speciality. Don’t get me wrong there are Solicitors that specialise in property law who would be perfect for the job. But generally speaking most Solicitors have a general knowledge of all law (much like GP’s with Medical knowledge) so land and building contracts that contain very specific clauses may not be familiar to them. I’ve had Solicitors in the past phoning ME to clarify clauses to THEM……………if you had a specific illness you wouldn’t go to a GP for treatment, you would go to a specialist. I’ll leave it at that:)

2. Is this a single contract or split contracts for the house and land? What are the benefits if any?

The majority of packages Jandson sell are split contracts. As a first new home buyer there are a number of advantages to this in that you will only pay duty on the land (if applicable). A single contract would have you paying duty on the full contract price (once again, if applicable). Recent changes to the First Home (new home) Buyers grants and concessions has made it a little easier for people to enter the property market for the first time. These include a duty exemption on new and existing homes valued up to $650,000 and vacant land valued up to $350,000 and a duty concession on new and existing homes valued between $650,000 and $800,000, and vacant land between $350,000 and $450,000. Duty calculators can be found here

The first home (new home) buyer grant still applies. A single $10,000.00 grant is payable to purchasers who enter into a building contract to construct a new home where the total sum (house and Land) does not exceed the $750,000.00 cap. Compare this to a new home purchase where the cap is only $600,000.00, it makes sense to buy off the plan.

3. How does the payment plan work?

I have uploaded a generic payment plan to our website which can be found here for those that are interested. Please note this is just a sample plan and actual payment amounts will vary with different developments. As mentioned before, every builder has their own way of doing things but essentially the end result is the same. Where you will see a difference is where a builder has the land and house under one contract. Under these circumstances the builder may except 5 or 10% initial deposit and then balance on completion. This has its pros (no progress payments) and cons (increased payable duty) but its really up to the individual to assess their financial situation and see which payment plan is best suited to them.

4. Can we change the floor plan to suit our needs?

Ahhhhh this question will have our drafts team out for my blood:) In a word yes BUT there are boundaries to what we will do. We can turn a Living room into a Media Room by adding some plasterboard walls and double cavity sliding doors, extend a Kitchen bench or change under cupboards to pot draws, replace hinged doors in the wardrobes with mirrored sliding doors, reconfigure bathrooms to suit personal taste, move adjoining walls to create a larger/smaller room if required BUT don’t ask us to create the Media Room and then move it from the middle of the house to where bedroom 3 is and then put bedroom 3 where the laundry and main bathroom are and then put the laundry and main bathroom where the Media room was and then……..you get the picture! Generally speaking we do not allow changes to the overall foot print of the home or the basic internal layout. When we site a home on a block all the area calculations are made so we know it works. Adjusting the foot print can cause issues with site coverage and landscaping requirements. I always remind people that one of the reasons they selected a specific package is that they liked the layout of the floor plan. If you alter it too much you may (and often do) lose the functionality of the original design and it can dramatically effect the final price and potentially push you over budget.

5. Can we pick all our colours, fixtures and fittings?

Yes. Some builders offer a fixed number of colour palettes for external and internal colour selections on packages. We believe that since its your home you should be able to select the colours you want and the level of inclusions that you would like to change to. Most builders who offer this service have a dedicated place that you will visit and sit down with a qualified colour consultant who will go through the entire package with you. This is usually a 2 to 3 hour process for external and internal colours.

You will also meet with your Electrician to discuss lighting and electrical options, data and internet options, security systems etc. A further meeting with our tile and Carpet suppliers, Beaumont Tiles and Accent Carpets Castle Hill, maybe required if you have chosen to do your flooring through us. Most builders will offer similar services.

So I hope this helps. There soooo many more questions I could list here but these typically are the most common ones. If you have any that would like answered email me and I’ll put them into a blog further down the track. Until next time good people, take care.



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