Selling As House And Land Package

Hi all,

We have two blocks of land for sale as part of a splitter subdivision and the current plan is to sell one as vacant land and use the funds to build on the remaining one, to sell as a completed house. Both would be through a REA.

It came up in conversation with a major homebuilder that we could sell the vacant land as a house and land package through them, presumably instead of through a REA. Has anyone had any experience selling land this way? Does anyone have any opinions on it being an inferior selling method and why?

Thanks in advance.

 

Its quite common to sell land through either a house and land builder or the equivalent builder broker service (a middle man between builder and buyer). Selling land is a different proposition to an existing house and these companies know how to present it to buyers. Can work either way in that they may not put in as much effort to sell the land as an agent. However they have a proven, systemised approach to walk buyers through the process of the end-to-end build. Often H+L companies will list their designs for your site as soon as your listing goes up anyway.

 

do you still get your asking price if its a H&L package? do they get different commission?

 

It depends.

A builder will just have what they save in their build.pric3. Depending on the area, a buyer even might find it more lucrative to buy house and land than buy from market.

They dont keep anything in land. If your expectations are in line with the msrket and you are not fussy dropping expectations if market changes suddenly, you are doing good. I have done that before.

Regards

 

So can you tell the building company what you want to sell the land for, they then add their build cost and it gets marketed at that price? Any discount on the sale then comes off your land price i.e. build price doesn't change? Do they charge a commission for this or is getting the building business their commission?

 

Thanks a lot for your help.

 

Hi,

Let me know how you went. I'm in a similar situation, selling Land with a house for free on it. Land can be subdivided in two. Land alone is worth more than H + L.

Builders/developers/investors don't offer a lot as they want to maximise their profits (even though they stand to gain a huge profit if bought at sale price). Families wanting to live next door to each other, I think, are the best buyers and will save the most doing subdivision and building themselves. Just need to find these buyers. Had one (one family was in, but waiting on second family) but previous agent did not come back to me on the outcome.

That's one of the reasons I have gone now to another Agent. So far so good with this one.

 

Have you had tax advise about doing this, you could be up for GST and vacant land isn't a CGT asset.

 

Good point. If selling as H + L and you have lived in it whole of the time, then there shouldn't be CGT. However, if you subdivide, rebuild and sell, then probably CGT will apply. If you sell one block and live and build on the other, then CGT on sold block but no CGT on lived in house. Accountant and ATO are best to dicuss with. ATO web site has some examples and calculations that best suit.