To show the process we will use a typical 4 bedroom home as an example.
4 Bedroom, 4 Bathroom Home This caters for 3 tenants/participants and 1 onsite overnight carer $640,000
Initial Deposit on signing an Expression of Interest is $1,000. This secures the land (No Commitment) but held for the client whilst the contract process takes place.
It takes 2 to 5 working days for both land and build contracts to be prepared and they then go out to be signed by purchasers:
Once contracts are returned, they are signed by the land developer and builder.
Contract dated after last person signs the land contract.
(This is usually the land developer or his solicitor). From the date of contract there are 5 working days cooling off period and if the contract is not Subject to Finance now becomes unconditional.
(usually a Cash Contract)
If the contract is still subject to finance, it becomes unconditional after finance approval. (Usually 21 Days STF but extension granted where lenders take longer than expected).
Now the balance of the deposit is due on the land including the $1,000 initial deposit. Normally this is 5% of the land value.
Land contract is now unconditional
Builder may invoice for 1st progress build deposit 5% (Refer to progress payment (1) of build contract) this may sometimes happen at unconditional or after the land settles. Council, usually 2 weeks for approval plans (can Vary) after approval footing payment due etc – Refer to build Contract for progress payment schedule to settlement.
Usual deposit conditions 5% deposit on both house & land Balance land deposit to 5% on unconditional.
The land is land tax-exempt and stamp duty is only payable on the land
When the land contract is unconditional
The plans are ready to submit to the council.
The land contract settles -The builder has confirmed by letter from the certifier that the plans are compliant, the builder will lodge plans and wait for approval of drawings from Council.