We are considering whether to buy an established house, or a new home and land package. What are the risks involved when buying a home and land package? Any tips for doing this?

watch out of an advisor who is all bells and whistles that wants to fly you up to Queensland to sign up immediately: quite often this person can be getting a kickback from the land sale, the mortgage broker, the builder and everyone in between. There are a LOT of shonky operators out there, so some healthy skepticism wont do you any harm. Ask a LOT of questions, there is no such thing as a dumb question when you are fixing to spend over $500k
good luck
Brendan

Hi Ansopny

The biggest plus point of buying an established house is that you see what you get. With a house and land package, you have to visualise how your house is going to turn up. It might be good on paper and in your mind but the end product might be different than what you may have pictured (for the better too at times).

Also the biggest thing about home and land package these days seems to be the fact that all the builders are too busy and so are their contractors and they are rarely keeping their promises they make about the completion timing (some of the big and reputable ones too).

Home and land package also has it’s set of advantages such as you having a say in some aspects of the layout and appliances, etc.

Also the stamp duty payable might be lower if you buy the land separately from the building contract.

Hope this helps as a start.

Hi Ansopny,
From your previous question, I am assuming that you plan to live in this house. In that case, the main risks and benefits mentioned will still apply.
The cost of new can be up to 20% more than a similar sized existing home just for the privilege of getting a new home and it will potentially take 5 years for the market to recognise that price.
It can take 12 months from start to finish for a volume builder to move in to a home and up to 2 years for a smaller builder or even more. There is a risk that it won’t turn out like you expected.
If you buy established, you can get in to the home in around 60 days and you get what you see. Here, the trap is that you also get its problems that can be quite costly down the track. Get a qualified building and pest inspection on any existing home as part of the contract of sale (not possible at Auction).
My personal preference for an owner occupied property is to buy established where the infrastructure is already in place like schools, medical, transport and shopping.
Best of luck with your search
Regards
Scott