Deposit Process on a Land and Home Package

LBigfuzz on 07/10/2017 - 16:14
Last edited 07/10/2017 - 21:12 by 1 other user

Hi guys,

My partner and I are looking around for a house ATM and we came across a Land and House package that we really liked.
The way I understood the process is that we put a holding deposit on the block and then the actual deposit will be payable at Titling.

The company we are going with are doing things slightly different
Land:

• $1,000 initial holding deposit
• Contracts signed within 1 week
• 10% payable at contract signing minus the $1,000 already paid
• Balance of land payable at settlement which is expected to be December 2017

Build:

• $3,000 initial deposit on signed quote
• Contracts & Working drawings prepared within 3 weeks
• 5% payable at contract signing minus the $3,000 already paid
• Balance of construction cost split into 5 x Progress payments during construction

Just wondering if anyone has done it this way before?
I understand December is not very far off but I don't know how firm that date really is and I am a bit hesitant to put all that money up in the air until they actually build.

• 

  djkelly69 on 07/10/2017 - 22:53

  That process sounds normal for split contracts. Just paying a deposit then the balance at completion as you initially described is how a single contract or off-the-plan purchase is structured.

  It can be done either way.

  • 

    Bigfuzz on 08/10/2017 - 10:54

    Awesome, thanks so much for replying

• 

  boomramada on 08/10/2017 - 12:02

  +1

  Make sure you got your pre approval sorted before make a deposit.
  Although it is a split contract, bank need to know the actual build plan before loan approval for land.

  Make sure your plan is approved or can get approved to build within the block.

  I went through this process once, I wouldn't do it again. Painful. Hopefully yours will be smooth.

  Get a good conveyancer.

  • 

    chumlee on 08/10/2017 - 12:07

    The company most likely has plans approved by council being that all houses will be much the same just depends on which of the pre approved plans you go with

    • 

      boomramada on 08/10/2017 - 13:51

      Not always, they saying, they are approvable plans, and you got selection of blocks, and you can pick which plans goes with which block. Once you select and pay the deposit, builder go ahead and approve. Well that was my case anyway.