Buying Your First Home & Land in WA

How house and land packages generally work

A house and land package brings together two separate things: a block of land, and a home to be built on it. Sometimes they are sold together under one arrangement. Sometimes you buy the land from a developer and contract a builder separately. Occasionally you buy a home that has already been built on a lot.

Knowing which of those you are looking at matters more than most people expect, because it determines how many contracts you sign, how the deposits work, when you start paying interest and what happens if one part is delayed.

• Two contracts (land and build): common in new estates. The land settles first, then construction begins. You may hold the land for a period before building starts.
• One combined arrangement: often presented as a single price. Ask what is actually being signed and what each component costs.
• Completed or near-complete home: fewer decisions and a shorter wait, but less choice about design and inclusions.

Understanding the land and build components

The land component is about the block itself: its dimensions, orientation, levels, soil conditions, easements, and whether the title has actually issued. The build component is about the home: the design, the specification, the allowances and the inclusions.

Problems usually appear at the join between the two. A design that fits on paper may not fit a specific lot once setbacks and easements are applied. A quote based on a standard site may not survive contact with the actual soil report. Ask for both to be reconciled in writing for your specific lot before you commit.

• Confirm whether the land is titled. If not, ask for expected timing and what happens contractually if it slips.
• Ask for the lot dimensions and confirmation from the builder that your chosen design fits.
• Ask whether a soil test and site classification have been done, because they drive the slab and footing cost.
• Check for easements, retaining requirements and finished lot levels relative to neighbours.
• Ask which services are connected and which are still to come.

Budgeting beyond the advertised headline price

The advertised figure is rarely the amount you need. Building a realistic budget means listing every cost, not just the two contract prices, and it is far easier to do before you fall in love with a design.

A practical approach is to write down three numbers: the total of the contracts, the total of everything outside the contracts, and the amount you will spend while you wait to move in. The third one catches most people by surprise.

Finance, pre-approval and deposits

Talking to a lender or a mortgage broker early tends to make everything else simpler, because it converts a vague budget into a number you can actually work with. Construction lending also works differently to a standard home loan, with funds released in stages as the build progresses.

Deposits vary by arrangement. There is generally a deposit on the land, a deposit on the build contract, and there may be a holding deposit before either. Ask what each one is, when it is due, and what happens to it if your finance is not approved or the land does not title.

HomeLot does not arrange finance and does not provide financial advice. Lending criteria, interest rates and product features change, so rely on your lender or licensed broker rather than on general information.

• Ask what pre-approval actually covers and how long it lasts.
• Ask how a construction loan releases funds and what you pay during the build.
• Confirm what happens to deposits if finance is declined or titles are delayed.
• Understand how lenders mortgage insurance may apply to your deposit size, if relevant to you.

Site costs and other possible additional costs

Site costs are the most common source of unexpected expense in a new build, because they depend on the specific block rather than on the home design. Sand, clay, rock, slope, fill depth, retaining and the position of services all affect the figure.

A generic site works allowance in an early quote is a placeholder. Once a soil test and contour survey exist for your lot, ask for the figure to be updated. If a builder will not update it, that itself is useful information.

Inclusions and exclusions — reading the specification

The specification is the document that tells you what you are actually buying. Two homes with the same floor plan and a similar price can have very different specifications, and the difference shows up the day you move in.

Read it as a list of questions rather than a list of features. For each line, ask whether the amount is fixed or an allowance, and whether the item is the standard product or an upgrade shown in the display home.

• Ask which items in the display home are standard and which are upgrades.
• Check whether flooring covers the whole home or only part of it.
• Confirm the standard of fixtures, tapware, appliances and cabinetry included.
• Confirm insulation, glazing and any energy efficiency provisions.
• Ask about the fixed-price period and what triggers a price adjustment.
• Ask how variations are priced and approved once construction starts.

Choosing a location

Location decisions tend to be made emotionally and justified afterwards, so it is worth setting your criteria before you start looking. Work travel, family connections, school needs, block size and how established you need the area to be will narrow the field quickly.

Visit at different times of day and on a weekend. Check the walk to the nearest bus stop or station rather than trusting a map. If a masterplan shows a park, shops or a school, ask what is built, what is funded and what is only proposed.

Our area guides cover what buyers commonly weigh up in each of the locations we currently focus on. Most first home buyers in the southern corridor start with house and land packages in Kwinana, because it combines established services with a range of newer and older pockets.

Questions to ask a builder or consultant

You are allowed to ask direct questions, and a provider comfortable with their offer will answer them in writing.

1. 01What is the total estimated cost for me to move in, including everything not in the build contract?
2. 02Which figures in this quote are fixed and which are allowances?
3. 03What is the expected build duration for this design on this lot, and what happens if it runs over?
4. 04What are the site conditions on this lot, and has a soil test been done?
5. 05What warranties and statutory protections apply, and how does the defects process work after handover?
6. 06Who is my point of contact during construction, and how often will I hear from them?
7. 07Is anyone in this transaction receiving a commission or referral fee, and from whom?