Land Buyers Beware: The True Cost of Cheap Land

22nd July 2024

Finance & Budgeting Pre-Construction During Construction Post-Construction Legal & Contracts First Home Buyer Investor Upsizing & Downsizing Design & Trends Sustainability & Energy Efficiency Smart Home & Tech News & Industry Insights

This article uncovers the hidden costs of cheap land purchases, offering practical advice on evaluating site conditions, understanding engineering plans, and avoiding costly surprises when building a new home.

Land Buyers Beware: The True Cost of Cheap Land

Buying a block of land is an exciting step towards building your dream home. However, not all land is created equal, and the initial purchase price can sometimes hide costly surprises. In this episode of the Home Building Hub podcast, hosts Colin Bischof and Darren Brennan delve into the hidden costs and potential pitfalls of purchasing cheap land. Their insights can save you from costly mistakes and help you make informed decisions.

The Hidden Costs of Cheap Land

While a low price tag on a block of land might seem appealing, it’s crucial to look beyond the surface. Some of the main hidden costs to watch out for include:

• Site Costs: These are expenses related to preparing your block for construction. They can vary significantly based on site conditions.
• Fill and Fall: The amount of soil moved around (fill) and the slope of the block (fall) greatly influence site costs. The higher the fill or fall, the more expensive your site costs are likely to be.
• Retaining Walls: Necessary for managing slopes and providing a stable foundation for landscaping.
• Easements: These underground services can restrict where and how you build, potentially leading to additional construction costs.

Four Common Oversights When Buying Land

1. Inaccurate Engineering Plans: Ensure the site’s engineering plans accurately reflect the block's conditions. Discrepancies in fall measurements can lead to unexpected costs.

2. Side Fall Considerations: Most buyers focus on the block’s front-to-back slope but neglect to consider side fall. This can increase the need for retaining walls and complicate landscaping.

3. Retaining Wall Requirements: Builders who do not include landscaping might not factor in the need for retaining walls, leaving you with unexpected expenses later on.

4. Easement Impacts: Building near easements may require additional peering (foundation support), driving up costs.

Essential Tips Before Buying a Block of Land

• Consult a Builder: Before signing any contracts, have a trusted builder or sales consultant review the block.
• Ask the Right Questions: Speak with the person selling the land about site conditions, engineering plans, and potential costs. If a land agent quotes low site costs, double-check with an experienced builder consultant to be sure.

Key Takeaways

• Cheap land can lead to expensive site costs if not properly vetted.
• Always review engineering plans and consult with an experienced builder before purchasing.
• Look beyond the sales pitch and focus on practical aspects like fill, fall, retaining walls, and easements.
• Asking the right questions upfront can save you thousands in unexpected expenses.

Glossary of Terms

• Site Costs: The expenses involved in preparing the land for building.
• Fill and Fall: The soil movement and slope of the block, impacting construction complexity.
• Retaining Walls: Structures that hold back soil and create flat spaces on sloped land.
• Easements: Legal allowances for underground services that may affect building placement.

Frequently Asked Questions (FAQ)

Q: What are site costs, and why do they vary? A: Site costs cover the preparation of your land for construction, including excavation, leveling, and dealing with soil conditions. They vary based on the block’s fill, fall, and specific requirements of the build.

Q: How can I avoid buying a problematic block of land? A: Always consult with a builder or a trusted new home sales consultant before purchasing. They can review the engineering plans and provide an accurate estimate of potential costs.

Listen to the Full Episode

For a deeper dive into the true cost of cheap land and more expert insights, listen to the full episode of the Home Building Hub podcast: Land buyers beware: The true cost of cheap land.

About the Home Building Hub Podcast

The Home Building Hub podcast, hosted by industry experts Colin Bischof and Darren Brennan, is Australia’s premier resource for new home buyers. With weekly episodes featuring special guests, the podcast provides objective, high-quality insights into the home building process—completely free and without sales pitches. From understanding financing options to navigating the complexities of building a new home, each episode is packed with actionable advice and tips.

Explore more episodes at www.homebuildinghub.com.au and join our growing community of informed home buyers.

Disclaimer

Whilst we’re all about providing value to you, this article should not be considered as legal or financial advice. It contains general information only and is based on the content discussed during the podcast episode. This information is relevant to the episode’s release date and may not be applicable at the time of reading. Always seek independent professional advice tailored to your personal situation before making any legal or financial decisions.