What is the main difference between a one-part contract and a two-part contract when buying a property?
The main difference between these two contract types, lies in how the land and construction components are managed.
One-Part Contract (Single Contract)
- Description: Combines the purchase of land and the construction of the property into one single agreement.
- Payment: Typically, you make one payment upon settlement, covering both land and construction.
- Benefits:
- Simpler financing: You only need one loan approval process.
- Reduced financial stress: No progress payments during construction.
- Streamlined process: Fewer contracts to review and manage.
- Who It’s Best For: Buyers seeking a seamless and straightforward purchasing experience.
Two-Part Contract (Dual Contract)
- Description: Involves two separate agreements—one for purchasing the land and another for the construction of the property.
- Payment:
- Land is paid for upfront or on settlement of the land contract.
- Construction is paid for in stages (progress payments) as the build progresses.
- Benefits:
- More flexibility: Buyers can choose different builders or modify construction terms more easily.
- Control over timing: Allows for separate negotiations and planning for land and building.
- Challenges:
- More complex financing: Requires separate loan approvals for the land and construction.
- Higher involvement: More contracts to manage and coordinate.
- Who It’s Best For: Buyers who want greater flexibility and control over the building process.
In Summary:
- A Single Contract is ideal for those who prioritize simplicity and convenience.
- A Dual Contract suits buyers who want more customization or flexibility in selecting their builder and planning the construction process.
If you would like more details about financing, timelines, or other aspects of these contract types, please don’t hesitate contact us.
What should I do?
At Crest Property Investments we specialise in sourcing brand new and off the plan properties for buyers. We also do not charge fees to buyers! We can assist you by providing a recommended builder to build your new home.
We would welcome the opportunity to help with your property purchase. Our YouTube channel and Market Insights also provide a wealth of information to assist you with many areas relating to property.
While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.
January 2025
