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Hi everybody - George Sourris, Empire Legal.
Today's topic: Buying a block of land in QLD - pro tips you need to know!
All right - so you've finally saved all your pennies and you're ready to buy a block of land to build your dream home. Maybe it's at Park Ridge, Logan, Yarrabilba, Pallara, or even Sky Ridge on the Gold Coast. Wherever it is, you need to make sure you're equipped with the right knowledge and tools to succeed.
With build costs skyrocketing since COVID due to material price increase, a lack of tradespeople, and an unbelievable level of demand, you really do need to be prepared. And it all starts with land. Let's say you found that block of dirt that looks like the one. Don't just sign a contract to buy. There are a few things you need to do before signing the contract, or at least account for in the contract, by including a special condition.
For starters, let's make sure you get a soil test. This is a special condition that gets put into the contract and allows you a right to terminate in the event you are not satisfied with the results of the soil test. New players do not think of this one. If the ground is harder than normal, or there are rocks etc underground, this can significantly impact the cost of the build of the home.
Even a big tree on a property - it may be protected. This is not the vibe if it's in the middle of the block where you want to build your house. Sloped land is another thing you need to consider. Standard homes may not be able to be built on a sloped block and will require custom engineering and architecture.
Another thing to watch out for is overlays, such as flood or bushfire. It's always best to speak with the local council, or even better engage a local town planner. They'll be able to alert you of anything that's out of the ordinary that may affect your ability to build, or the cost of the build. If there's something out of the ordinary that appears, you won't be protected. If you haven't done all your research before you sign a contract, we recommend considering a due diligence clause, to allow you time to do the research.
Keep in mind, this is often not attractive to the developer or seller. So the shorter your due diligence period is, the more attractive of an offer it is to the seller.
We also suggest that you find your builder and get a cost to build ASAP. There's no point buying your dream block if you cannot afford to build your dream house, or if the builder you want to use can't start the project for years. You don't want to end up pitching a tent on your new block.
A quick story.
My cousin bought a block of land that backs onto the forest in the Blue Mountains. Due to prior fires destroying the houses on the street, the cost to build was astronomically higher. They had to, as part of the council laws, have fireproof shutters, independent sprinkler and firefighting systems installed on the property, and even obliged to plumb in large water tanks as a firefighting tool for off-grid water.
Obviously, this is to minimise the chance of the house burning down in the future, like the old house did, and all of the houses on the street for that matter. They had to pay extra for the firefighting upgrades to the house. Moral of the story - do your research.
Imagine if they had no idea about the costing, settled the land, and then found out they had to find an extra $100k, $200k to be compliant with council regulators for the build, that had not been factored into the budget.
Also guys, make sure your finances are in order. Do not buy a block of land unless the banker or broker has given you the green light. If it's not all tidied up before you sign, then make sure you get a finance clause that will allow you to make sure you're approved for the cost to build the house and the land.
Keep in mind, if you're buying off the plan, sometimes there can be lengthy waits between signing the contract and settlement. Finance approvals can expire, or the lender may not issue you with an unconditional approval until they can see the land is registered. A common special condition we like to request to add into the contract with a developer is: subject to valuation after registration clause.
This allows the buyer's bank access for the purposes of a land valuation, after the developer has given notice that the plan has registered. If it doesn't stack up, i.e. the land value has gone down since the earlier finance approval was given, then the clause will allow the buyer to terminate.
Keep in mind, the developer has to agree to this. We also have access to a local tool called PropCheck - developed by a Brisbane Town Planner, that allows us to search properties currently only in Brisbane City Council, and prepare a comprehensive report that includes town planning considerations - at no cost to you. You can also get access to Before You Dig, a product that supplies mapping for things such as electricity lines, sewer lines, manholes, etc. Here is the link. There's a lot of free town planning overlay tools that you can access through the local councils.
However, we suggest you chat to a local town planner, as they know what they're looking for. If you need help with recommendations, we have friends we trust in all areas surrounding property - from town planners, to flood experts, to builders.
We do not receive any kickbacks from these people, we just genuinely refer them because they do a great job. We want you to win.
If the land you're buying is your first property (land) and it's valued at under $500k, you may be able to get the benefit of the First Home Vacant Land Concession for transfer duty. Also, do your research as there might be State or Federal grants that can help you out. Your mortgage broker or banker may be able to help here.
If you need the soil test or due diligence conditions, we can help you out and provide this as part of our service to our buyers. Do your research people - do not get caught out. Please. Get in touch with us so we can HELP you.
We are Queensland Property Experts. We do this all day, every day. It's obligation free. Pick up the phone, send us an email, DM, whatever you like!
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George Sourris. Empire Legal.
If you have any questions, you can email me: george@empirelegal.com.au.
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Thanks for reading everybody. See you on the next one.
Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Brisbane, Queensland, Australia.
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Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.