Understanding the House and Land Purchase Process: A Guide for First-Time Buyers

Buying a house and land package can be exciting, but for many first-time buyers, it can also feel a bit overwhelming. One of the most important things to understand early on is that the land developer and the builder operate as separate entities. Their contracts are not linked, and they're usually not prepared by the same agent.

Land and Builder Contracts: Separate Paths, One Destination

When you find a block of land you love, don’t worry—you won’t lose it just because you haven’t chosen a builder yet. Developers typically have standard contracts ready for every lot in a development, and your agreement with the builder can be signed later. It’s completely normal to go under contract on the land first, then finalise your building plans.

Finance and Timing: Keeping Everyone in the Loop

As you approach the finance and settlement stages, it's critical that everyone involved is kept up to date—especially the developer. The mortgage broker will work with your settlement agent to inform the developer that the land and construction will be financed together. Unconditional finance approval typically requires both the land contract and the signed building contract, and requesting an extension to the finance clause is a common part of the process.

The Preliminary Works Agreement (PWA): Locking in the Plan

Before your full building contract is prepared, the builder will usually offer a Preliminary Works Agreement. This document outlines your chosen plan, includes initial estimates (such as for site works or upgrades), and details the deposit terms for the build contract. Signing this secures the design you're working from and begins the next stage of planning.

From there, you’ll collaborate with your builder’s sales representative to finalise the design, make changes, and receive updated pricing. Only when you're happy with all aspects of the build will the full Building Contract be prepared.

Submitting to the Lender: Bringing It All Together

Once the Building Contract is signed, your mortgage broker submits it along with the land contract to your lender. The lender then orders a valuation to assess whether the overall package meets their requirements. This is standard practice for house and land finance applications.

Know Your Terms: Read the Fine Print

It’s important to remember that every builder has slightly different terms in their Preliminary Works Agreement. Before signing anything, make sure you clearly understand all conditions, refundability of deposits, and any charges that could apply later. Your builder’s representative should be able to walk you through this in plain terms.

Experienced Support Makes the Difference

Going through the process for the first time can feel daunting. But with an experienced settlement agent and a proactive mortgage broker working together, you’ll have the support you need to navigate it smoothly. Strong working relationships with developers and builders help keep everything on track and in line with your contract terms.

Simple Step-by-Step Guide to Buying a House and Land Package

1. Choose and Secure Your Land: Select your block and go under contract with the land developer.

2. Engage a Builder and Sign a Preliminary Agreement: Pick a builder and sign a Preliminary Works Agreement to lock in your home design and get cost estimates.

3. Finalise the Building Contract: Make design changes if needed, then sign the formal Building Contract.

4. Submit Both Contracts for Finance: Your mortgage broker sends the land and building contracts to the lender, who will arrange valuations and assess your loan.

5. Receive Unconditional Approval and Proceed to Settlement: Once finance is approved and land titles are issued, settlement takes place and construction can begin.

And always—before signing anything—make sure you understand the terms, what’s refundable and what’s not. A good builder and broker will always walk you through it.

Have questions or need help with this? Feel free to reach out here https://www.tarrasoletang.com.au/contact — happy to help!