Our guide to buying a block of land and building later
Hunting for a beautiful design is half the fun of building a new home.
You can spend hours on end scrolling through hundreds of designs, taking virtual tours, taking actual tours and imagining what life will be like in your new home. Then, there’s the excitement of watching the fantasy come to life — seeing each stage of the building process come and go until the builder hands over the keys.
Building a new home is a big deal — but there’s one crucial factor that you need to consider for the building project to go off without a hitch.
You need to purchase a vacant and viable block of land in a great location, not just for the builders but to ensure you have a wonderful life in a good neighbourhood that’s close to shopping centres, schools, public transport and more.
The buying land process can be a real challenge, but we’re here to help. Here, we share our guide to buying a block of land and building later.
How to choose a block of land?
Finding the perfect block can be challenging if not frustrating — there are lots of little things to consider before making a purchase. There are a few general rules that will help when looking for land:
- Get pre-approval on a home loan first. Pre-approval provides an indication of how much you can borrow from the bank and gives you the confidence to start shopping around. You’ll have a budget in mind and the means to make a purchase when you’re ready.
- Look where you want to live but don’t limit yourself to the CBD. We all want the convenience of being close to work, exciting restaurants and events, shopping centres and more, but sometimes living in or near the CBD can be unrealistic — especially in Sydney. Consider quieter neighbourhoods further out from the CBD — you’ll find larger blocks of land at a more affordable price.
- Consider the future worth of the land. Take a look at your surroundings and do some digging to find out what will be built in the neighbourhood in future (schools, shopping centres, sports fields etc). Consider whether this will increase the value of your new home.
- Get good advice. The right sales consultant will have lots of local knowledge and will be able to talk you through all the local planning requirements before building or purchasing. You don’t want to purchase a block only to find it’s not viable to build on.
- Consider environmental issues in the area. Before purchasing, take a look at the geography of the location, its relative height above sea level and nearby drainage areas. Find out if flooding is a common problem, or if the area has a high Bush Fire Attack Level (BAL) rating.
- Find out what kind of soil is on the block. The soil has a critical impact on building plans. If soil is more likely to shift, building a home can be more complicated.
- Consider where your home will be placed on the block. No one wants neighbours peeking in through their windows. Take a good look at the land and think of the home designs you’ve been looking at — will the design fit within the parameters of the land? Will people be able to see in?
Steps to buying a block of land
Once you’ve found the perfect block of land, it’s time to make a purchase. If this is your first time purchasing and owning land, you might be feeling a little intimidated or confused by the process — but there’s no need to be!
Below, we outline the seven most common steps to buying a block of land.
#1. Sign the contract of sale
The contract of sale is a written agreement outlining the terms and conditions of the sale including how much you’re offering and how long the settlement period will be. It will either be a conditional offer (containing specific sale conditions) or an unconditional offer (when you have the funds immediately available for purchase).
#2. Exchange contracts
Once the price and conditions have been agreed upon, you can sign the contract of sale document with the seller.
#3. Pay a deposit
The deposit is held in a trust account and can’t be accessed by the developer until the sale has been settled.
#4. Find a settlement agent/solicitor
The next step is to find a settlement agent or solicitor who can handle the paperwork involved with your purchase. You will have to clarify the terms and conditions of the sale with the seller, as well as your solicitor.
#5. Finalise the loan
You will need to talk to the bank or your mortgage broker and finalise your mortgage documents. Your lender or broker will then help with the process.
#6. Sign transfer of land documents
After the contract has been exchanged, you’ll be asked to sign a transfer of land document. This is then registered with the Land Titles Office or Register of Titles by the owner or developer so the property can be transferred to your name.
#7. Register the land
This is an official record of your ownership of the land. Once the purchase has been registered and the final settlement takes place, your mortgage becomes active and the land is yours.
Alternative building options with Montgomery Homes
Buying a block of land and building later is just one option for aspiring homeowners. With Montgomery Homes, you also have the option to purchase a pre-built home to knock down and rebuild — this is a popular option for homeowners looking to build and live closer to the CBD where vacant land is scarce.
Simply choose your home design and organise the demolition of the existing building and we’ll do the rest!
Alternatively, you can also choose a convenient house and land package, so you can get everything you need to build in one simple purchase. We have house and land packages available in Sydney, Newcastle and the Central Coast!
Whether you have a block of land, want to knock down and rebuild, or you’d like a house and land package from Montgomery Homes, get in touch today!
Explore our other blog posts
- All Articles
- Styling & Inspiration