Property developers will buy land the moment it is released by the government so that they can provide different house packages for buyers. The two most popular options are taking a loan to construct the home and buying a home that is already completed on the developer’s land. You can find out more about the turnkey solution at Reward Homes.
One of the greatest benefits of turnkey solutions is there is a fixed price on the property. You don’t have to worry about a dishonest builder calling in the middle of the night just to let you know that the materials you had budgeted is not enough for the project. You have the peace of mind because of the smoothness in construction and that is why it is a great alternative for first time home builders.
It is important that you shop around and some research before you settle on a provider. You’re likely to come across a house and land packages advertised alongside properties that are on the market. There are a ton of questions that you should be asking the developer and you can only proceed with the engagement once you’re completely satisfied with the answers.
The Process of Buying a House and Land Package
The biggest difference between buying house and land package and an already existing home boil down to the financial arrangement. In case you bought the land first before building, you’ll be involved in two contractual obligations if you can’t afford to finance the project in cash. Ideally, you will be dealing with a mortgage and a construction loan. The two loans could be bundled together or could be separate.
For a construction loan, it can be broken down in stages and an amount is agreed depending on the needs at a particular stage. The four main construction stages include:
- Pouring of the concrete slab
- Erecting the walls and the roof
- Securing the house
- Project completion
If it is a turnkey package, the project is simplified. The two main contracts can be plastered together since the price for the house and land is fixed. You’ll definitely have more control over the design of the home should you decide to build it on your own. The property developer should take you through a couple of designs and you have to option to provide suggestions on improvements to reflect your style and personality. You should be careful at this stage as additional upgrades could significantly increase the final price of the house.
Factors to Consider When Buying a House and a Land Package
There are a couple of factors you should consider when buying a house and a land package and we’re going to highlight some of them.
Infrastructure: The infrastructure might not have been planned out well if the project is still on going. You might have to commute for longer hours if the roads are still in the development stages. Such factors need to be weighed before you consider the option.
Utilities: Are the basic and necessary utilities on site? Most real estate developers offering the turnkey package know the pain points for potential buyers will ensure that all the necessary facilities are on site before the start selling.
One of the perks of building a home is you will not have to worry about maintenance issues for a couple of years. There are no hidden costs with turnkey packages as you get what you pay for.
Finances Needed for a House and Land Package
Like any other loan, you need to prove that you can pay the money that you’re borrowing. You will need:
- Six months’ pay slip
- Recent tax returns
- Savings History
You will also need to be approved by the council before you can start building. You should have an emergency fund for the project as things don’t always go according to plan. You should not be working with just any one especially when it comes to choosing a builder. Make sure that you have written contact with the builder. Does your research before you put everything to pen and paper as changes to the contract could lead to a rapid increase in the cost of the construction.
To sum it up, you should be open to new ideas as far as home ownership is concerned. Make sure you’re doing your due diligence before you enter in any sort of agreement. You’ll be surprised at the available options which could be cheaper that what you’re used to.