The main difference between off the plan and house and land package is that in an off the plan package, the buyer doesn’t own anything until the end of construction, whereas in a house and land package, the buyer owns the land at the beginning of the process.
In both off the plan package and house and land package, the buyer has no way of physically inspecting the property until it is built and the contract is completed. Therefore, they have to rely on plans and specifications. This involves considerable risk.
Key Areas Covered
1. What is Off the Plan
– Definition, Features, Benefits
2. What is House and Land Package
– Definition, Features
3. Difference Between Off the Plan and House and Land Package
– Comparison of Key Differences
Key Terms
House and Land Package, Off the Plan Package, Real Estate
What is an Off the Plan Package
An off the plan package involves buying a property that is yet to be built. Since there is no real property to inspect, the buyers have to depend on the developer’s plans and renderings of designs that show how the future house would look like. Buying an off the plan package has several benefits. The main benefit is affordability. Often, buyers end up paying less for potentially more valuable property. This happens because the buyer and the developers agree on a purchase price first, but by the time the house is completed, the house may have a higher value due to increasing real estate prices.
But there are drawbacks of this type of packages as well. Sometimes, the development might not go ahead, or the development may be delayed for a long time. When signing for an off the plan package, it’s very important to review the contract well and seek legal or expert advice. Furthermore, buyers often tend to pay an advance to secure the property and then pay the balance upon the completion of the project.
What is a House and Land Package
House and land package is also like an off the plan since it involves a property that is not yet built. A house and land package usually involves two contracts: a contract for the sale of land contract and a contract for the building. In this type of package, the seller of the land and the builder may be two different vendors.
In house and land packages, the buyers have the freedom to choose their own designs and incorporate their ideas into the plan. Therefore, the buyers are not constrained by designs imposed on their property. Moreover, these types of projects are usually funded and completed in stages or phases. However, buyers may experience cash flow issues with construction in phases. Generally, buyers seek two types of financial aid for this house and land projects. For the land, they pay with a regular mortgage, and then to finance the construction of the house, they go for a construction loan. But in this method, buyers will have heavy loans accumulating in their account with every stage of building, so they have to be very careful with financial planning and managing the cash flow.
Difference Between Off the Plan and House and Land Package
Definition
Off the plan package refers to buying a house before the building work have been completed, whereas house and land package refers to securing a block of land and then constructing a house on that land.
Contracts
Off the plan package has only one contract and it includes both the land component and the house component, whereas the house and land package involves two contracts: one for the land and one for the house.
Ownership
In off the plan packages, the buyer becomes the owner at the end of the construction. But in house and land packages, the buyer becomes the owner of the land at the beginning of the process.
Vendor
In off the plan packages, the seller of the land and builder tends to be the same, whereas in the seller of the land and the builder may be two different vendors.
Conclusion
The main difference between off the plan and house and land package is that in an off the plan package, the buyer doesn’t own anything until the end of construction, whereas in a house and land package, the buyer owns the land at the beginning of the process.
Reference:
1. “Buying Property off the Plan.” CommBank.
2. “What Is a House and Land Package?” Plantation Homes.
Image Courtesy:
1. “Blueprint-floor-plan-architect-plan-354233” (CC0) via Pixabay
2. “New Home, Home, Construction, Construction, Site, House, construction, site, home, estate, architecture, residential” (CC0) via Pxfuel
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