This page will run you through some of the terminology you’ll come across on your journey of buying land and building your home.

Registered vs Un-Registered Land

When a developer acquires a parcel of land, they’ll submit a development application to divide it up into several smaller lots which will then become available for sale. Once the land has had its construction program complete with individual services to each lot, along with roads and other infrastructure, the local council will determine that the developer has constructed what they planned to, and the titles office will issue individual titles to each of the new blocks of land. This is called registration of titles, or simply registration.

Anyone should be aware whether the land they are looking at is either registered or not, as it will have a significant bearing on when they will be able to start building their new home. Another piece to be aware of is some financiers will not assess a clients file until the land is either registered, or close to being registered with its individual title.

Most blocks of land are sold off-the-plan, meaning registration has not yet occurred, and the development will be in it’s planning or construction phase.

 

The Typical Land Sales Process

For the most part, buying land and building a home will be done in two parts consisting of the land component, and build component. While your builder and land sales consultant will work closely in the background to ensure a smooth operation, you’ll be dealing with each separately as the process moves along.

Once you have found your block of land, you’ll secure it by filling in an Expression of Interest (EOI) form and paying an initial deposit, usually between $1,000 to $5,000 to a trust account of either the developer, or the developer’s solicitor. The EOI form has all the details the consultant will need to draw up the land contract which you’ll sign usually within a week.

Some contracts will have a 21-day finance clause to allow your bank or broker to assess the contract, and your personal circumstances and give you formal approval. Should you not obtain formal approval within 3 weeks, you can always apply for an extension of your finance clause. The reality is that build contracts can take a lot longer than 3 weeks in some cases and you’ll need to apply for extensions until your financier can assess both contracts at once. If you have a finance clause and finance doesn’t get approved, you will get your initial land deposit refunded. You’ll need to speak with your builder about their deposit policy as certain milestone payments will be non-refundable.

Once your finance has been approved, the nominated balance deposit will be due for the land contract, and you’re all ready for settlement.

If you don’t have a finance clause, you’ll pay your balance deposit after the cooling off has passed, and you or your solicitor will simply need to turn up for settlement.

 

What do soil classes mean when building on vacant land?

Soil ratings will affect the cost of your build. If your soil is more reactive, your builder will need to put in more footings, and deeper footings into the ground to make sure your home doesn’t move too much. Without these, and with too much movement of the home, your home would likely crack.

Builders will already include footings up to a certain soil class rating in their standard build cost. Though they will need to test your land to see if it’s more, the same, or less reactive than their standard inclusion. You’ll need to ask your builder what their policy is should the rating come back better than their standard inclusion. Some will credit back the difference to spend on other items, while others will provide fixed price.

koti does it’s best to take all soil classes into account when proving a price for your house and land.

The different soil ratings can be found below.

A - Acceptable

S – Satisfactory (Slightly reactive)

M – Moderately reactive

H – Highly reactive

E – Extremely reactive

P – Problematic site

 

What does a BAL Rating mean when building on vacant land?

The acronym ‘BAL’ stands for Bushfire Affected Lot. Some land estates, especially those close to bushland, may have a BAL rating over part of the project. The ratings are as follows: 12.5, 19, 29, 40 & FZ (Flame Zone).

The increasing ratings represent an increased threat of fire attack to a home on that block of land. While actually experiencing a bushfire would be unlikely, your home will need to be protected to the appropriate standard should a fire occur. The extra materials will add costs to building your home and may start as small as $3,000-$5,000 for extra seals garage doors, or extra glazing on windows, through to $50,000 for a compliant BAL-FZ home. It's worth noting that some builders may already build to a BAL 12.5 as standard.

koti does it’s best to take all BAL ratings into account when proving a price for your house and land.

 

What does an Acoustic Rating mean when building on vacant land?

An acoustic rating will determine how much noise is inflicted on a block of land. These are measured in Categories from 1 to 5, often referred to as Cat 1, Cat 2 etc., and come from building in flight paths, or near highways or busy roads for example.

The higher the category, ultimately means more materials are required in your home and vary from extra seals, through to needing air gaps between 2 panes of glazed window glass in extreme cases.

koti does it’s best to take all acoustic ratings into account when proving a price for your house and land.