When it comes to building a house there are a lot of decisions to make, and one of the biggest is whether to design and build, or purchase a house and land package. In this post, we’re taking a look at what these two options mean, and why one might be better for you than the other. Whether you’re looking to own your very first home, or you’ve been in the market a few times before, either of these options could be viable for getting you the house of your dreams. Let’s get started.
House and land packages
First, let’s take a look at house and land packages. These essentially consist of pre-arranged plots of land which a home has already been designed for. The sections that these houses are built on are typically owned by the builder, which means you are purchasing both the land and the house directly from them. This makes the transaction simple and straightforward – the prices are often fixed, and there are much fewer details to consider then when designing and building a home from scratch.
House and land packages are often an attractive option for those who are looking for a first home, and plan to work their way toward a different property. It also suits those with very busy schedules and lifestyles as there are less decisions to make. With the structure and layout taken care of, all that's left for you is to add your personal touch with colours, fixtures and fittings. Some house and land packages may already be underway and have move-in dates, making it a great option for those who want a brand new home without the wait. Another major reason people tend to go for house and land packages is the price. As we mentioned before, these packages are usually pre-arranged and fixed, but the practical upshot of this is that what you see is what you get; there’s no chance of the build turning up unexpected costs as it goes on.
Design and build
On the other hand, design and build gives you much more control. You buy your own plot of land before building, and so you are afforded the chance to choose a location yourself. Once the land is purchased, you are free to design and build your home along with a builder according to your lifestyle, budget and preferences. This process obviously takes much longer than just buying a house and and package which has already had most of these initial decisions made. However, to some, the freedom to create a plan tailor-made to suit their tastes and style outweighs the costs.
While there are enormous benefits in having control over the minor details, it’s very important to be aware of budget when choosing design and build. The nature of building a house is inherently complex that it’s impossible to predict all of the factors that might get in the way of the project, most of which incur extra construction costs. When choosing to design and build, it’s vital to think ahead about how to keep your budget under control and create contingency plans when you do need to go over budget. It’s also important to partner with a builder who has the experience and capabilities to plan and forecast thoroughly, eliminating as many unforeseen costs as possible to give you an accurate quotation and schedule of costs up front.
On that note, let’s talk about financing – arguably the most important factor of any building project or home transaction. No matter which of the two options above you decide to pursue, you need to know how and when you’ll need to pay. Design and build usually involves multiple payments that are made as progress develops – these progress payments are triggered by hitting certain milestones in the build. House and land packages, however, require a deposit upfront and no further payments until the build is complete.
When speaking with your bank about mortgages, you may note that many banks prefer to encourage buyers to look into house and land packages, as it makes their job easier. When your bank knows the exact price up front, they tend to be more willing to commit to loans. That said, banks cover design and build projects all the time. If this is the avenue you decide to take, it’s important to make the details clear with them and make sure you are both on the same page regarding whether or not they will cover extra costs incurred during the build.
Still need help deciding?
Getting into the housing market isn’t easy, but we can help. If you’re still not sure which option is best for you, you can talk to the expert team here at Classic Builders. We can assist you as early as step one, and we’re happy to examine your specific situation in order to give you a range of options to achieve your goals. For the help of the best house builders NZ has to offer, give Classic Builders a call!