This is an interesting situation and like so many things in life you need to compare apples with apples. One common situation is when a builder offers a house and land package. The builder owns a number of blocks and for the one price you get your block of land and your house built on it. At first sight it sounds like a darn good idea. You don’t have to go around looking for a block of land and then, having purchased it, start looking for a builder. With a house and land package you may well be dealing with the one person.

But every house and land package is not the same. Every builder is not the same. So what are the pros and cons in this situation? Let’s talk about changes to the contract, let’s talk about variations. Some builders who offer a house and land package have a very fixed view on what you get for the price. They would argue that the price is as low as it is because they don’t allow for variations. You may want to change the colour scheme or have higher ceilings or a different type of floor covering or you may not want to have the landscaping which comes with the contract.

Some house and land packages won’t allow for any changes, even minor ones. The builder works to a formula and buys the materials probably in bulk thus saving money thus enabling the builder to offer the complete package at a low or lower price. If what they are offering suits you to a T and the price you believe is good value for money, go for it. But if you want changes and the builder says ‘no changes’ then walking away might be your best option. Of course if the builder does allow variations you need to know what if any cost increase is involved.

You then have to be sure with a house and land package that the block you like will take the house you like. What if there are dozens of blocks available and they are not all the same shape or size? The builder may stipulate that only plan A can go on the block you have chosen. If you want plan B, you will have to choose another block. That’s just another possible disadvantage of taking a house and land package.

What about buying separately?

Many people do just that. But finding a block of land can be more expensive than with a house and land package. The vendor of the land, unless they can offer building services, only makes money from one source – the land. You may pay more than if you buy the complete package.

And by buying land by itself, what tests have been to your block? Has the soil been tested? Are there rocks or other substances which will make building more difficult and more costly? If so, that’s down to you. But if you buy the house and land package, it’s up to the builder to cover the cost of unforseen problems with the land.

If you are buying land by itself and then finding a builder, there is also the possibility that it will take longer for you to finally move in. You have a block of land that may have difficulty finding a builder. With a house and land package, the builder has already been chosen and in most cases Council approval already given. As such you will move in sooner and stop paying rent sooner assuming you are renting.

Remember if you take out a mortgage to have your house built and there are delays, you will be paying both your mortgage and the costs of your temporary accommodation. With a house and land package you are less likely to be in this situation.

It’s a tricky set up. Remember to compare apples with apples. There are happy home owners who took the house and land package just as there are happy homeowners who bought the land separately and then chose a builder. Weigh up the possibilities and choose the method which best suits your needs.