So you’ve found the perfect house and land package. The home design looks amazing, the location ticks all your boxes, and the price seems reasonable. But then someone mentions “two contracts” and suddenly things feel a bit more complicated.
Here’s the thing: buying a house and land package isn’t quite the same as purchasing an existing home. You’re actually entering into two separate agreements, and honestly, this trips up more people than you’d expect.
Why Two Contracts Instead of One?
The reason is pretty straightforward when you think about it. You’re buying land from one party (usually a developer) and a house from another (the builder). Sometimes they work together, sometimes they don’t even know each other that well. Either way, legally speaking, these are two completely different transactions.
The land contract comes first. This covers the actual plot where your future home will sit. Then there’s the building contract, which covers everything from the foundation to the final coat of paint.
Sounds simple enough, right? Well, it mostly is, but there are a few things that can catch you off guard if you’re not prepared.
The Land Contract: More Than Just Dirt
When you sign the land contract, you’re committing to purchase a specific block. But here’s what many people don’t realize: that land might not be ready for building yet.
Picture this: you sign the contract in January, expecting to start building in March, but the developer is still installing sewerage connections or waiting for council approvals. Your building timeline just shifted by months, and there’s not much you can do about it.
The other day, someone mentioned they’d been waiting eight months for their land to be titled and ready. That’s not unusual, especially in growing areas where infrastructure needs to catch up with demand.
Make sure you understand when the land will actually be available. Ask about title registration, utility connections, and any potential delays. Your builder can’t start until the land is properly ready.
The Building Contract: Where Things Get Detailed
The building contract is where most of the complexity lives. This document covers everything about your future home, from the type of bricks to the color of the bathroom tiles.
But here’s where it gets interesting: changes to the building contract after signing can be expensive. Really expensive. That upgraded kitchen you decide you want halfway through? It’ll cost significantly more than if you’d specified it upfront.
The truth is, most people underestimate how many decisions need to be made. Flooring, fixtures, paint colors, electrical points, landscaping allowances. The list goes on and on.
Take your time with this contract. Walk through the inclusions carefully. If something isn’t specifically mentioned, assume it’s not included.
Timing and Finance: The Tricky Parts
This part’s a bit tricky, but worth understanding. Your finance approval needs to cover both contracts, but the payments happen at different times. You’ll typically pay for the land first, then progressive payments for the building as construction milestones are reached.
Some lenders handle house and land packages differently than traditional home loans. Others are completely fine with them. It pays to shop around and find someone who understands this type of purchase.
For those considering house and land packages in Perth, the market has some great options, but each comes with its own timeline and requirements.
Before You Sign
Actually read both contracts. Yes, they’re long and occasionally boring, but they’re binding legal documents. Consider getting legal advice, especially if anything seems unclear.
Ask about timeframes, what happens if there are delays, and what your options are if circumstances change. The more you understand upfront, the smoother the whole process becomes.
Two contracts might seem like double the paperwork, but they’re really just reflecting the reality of what you’re buying. Take the time to understand both, and you’ll be much happier with the outcome.