It is not common for many homeowners to actually buy land and then build their home. The key is knowing when and how to buy land. Most of the population in America tend to buy from a home builder. In these situations, the land is owned by the builder and you are purchasing the land plus the home plans to be built in a single transaction. All of the leg work has been done by the builder to make sure the land is in build-able condition and that it also meet state and local building requirements.
Some people will do their homework on how to buy land. They are not interested in settling for a lot and cookie-cutter set of home plan designs from a home builder. These same people are confident enough to take on the challenge of buying a piece of land independently and building their own home. This probably have you asking should you build your own home? What’s to stop you if you are determined? If you decide to take on the task, let’s get you on the path of buying land before you purchase a set of house plans.
How To Buy Land To Build A House
Do you know the things to consider in order to make a wise land purchase? Well, if you intend to buy land, you should know what to look for so you can be sure about the purchase you are making. If you’ve already purchased a piece of property, continue to read. You may find some things that you’ve missed or maybe didn’t consider.
Below are a list of items on how to buy land. They are in no particular order, nor do they need to be. Just know that these factors should be consider.
Land Value
The most important aspect of searching for land is to determine the value of the property to you. Let’s just forget about the appraiser for a moment and think in terms of human value. Do you like the location? Is it ideal for the type of home you plan to build? This is the value that you must must first consider when buying land to build a home.
Depending on who is looking at the property (owner, appraiser, lender, you), the values will not always fall in harmony and this is common. Just remember that the most important value is the one you determine. If you are comfortable with the agreed upon price, then you should be comfortable with your decision to buy the land. You have time between the purchase and actual settlement to do your homework on the property. You can rescind your offer if you change your mind.
Land Zoning and Restrictions
Know the lot zoning ordinances (city or county), private covenants, HOA (homeowners association). Be aware of the property zone and if it may be rezoned in the future. Check the land record in the courthouse of your local city or county to go over the covenants prior to buying or before you close on the land. In addition, if you buy in a neighbor or subdivision, you have to also consider the bylaws of the homeowners association and see what else may be restricted on your property.
Topography and condition of the soil
A topography is of high value. It outlines the usable and unusable areas of your property. These highlights include potential drainage problems, easements, ingress and egress, and trees. Soil conditions must also be considered too. A soil scientist can help you with this and tell all you need to know. Whether you have to deal with rock in the soil (which can be expensive to remove), junk soil (soft soil usually a mixture of sand and clay that’s unable to support a foundation), or the emitting of radioactive radon gas, you should know these things because it goes back to the value of the land and affects the overall cost to build on the land.
Is the land conducive to your proposed home design? Consider whether you will need to add (fill) or remove (cut) significant amounts of soil. Is there enough room for a septic tank (if needed)? You must also think about the positioning of the building with reference to home orientation for passive solar and water drainage. Determine if the property is located within a 100 year flood zone? You don’t want your home subjected to the possibility of flooding.
Trees
Trees are another factor to consider when buying land to build a home. While they can produce a delightful setting, chances are that you will have to remove quite a few. Removing trees can be an expensive proposition. This is often overlooked in terms of cost for site preparation.
If the land is saturated, you will have to consider the cost of removing many of these trees which can be an expensive undertaking. Make sure there is a spot on the property that isn’t loaded with trees which reduces the cost on your part to prep the land for building.
Zoning
Make sure that you are buying land that is properly zoned. In the case of building your home, the zoning classification must be residential. It is also important to note that the city or county can change the zoning on a piece of property anytime after you have made the purchase. It is usually a change made from a lower zone to a higher zone (i.e. from residential to commercial). If it is raw land in this instance, you will not be able to build your home at that point. However, this does make your property more valuable.
Water and Sewer
Are you able to tap into the county public sewers? If access is not available for the property, you will have to install a septic tank for your sewage. In addition, the county has to determine if the land is even acceptable for a septic tank as the aforementioned soil condition explains.
Subdivision lots
Looking at buying land to build a home in a neighborhood can prove tricky. If you buy a vacant lot in a neighborhood and the homes fall within a certain price range, the home your plan to build must be in that range too. If homes in the subdivision average $150,000, you are not going to get a lender to supply you a loan to build a $350,000 home. You should price your proposed home within the scope of surrounding homes.
Covenants
Check to see if there are rules that govern the use of the land. They are included in the deed or referenced in the land records. Covenants are private restrictions set by the sellers (owners such as developers or builders). Unless it is unconstitutional, it is enforceable. Some property sales do not include these private restrictions, especially when the land is not a part of a community development. You typically find them in neighborhoods where the developers have them in place. Covenants are later transitioned into what we all know as a neighborhood homeowners association also know as HOA’s.
Taxes
Know the cost of ownership in the long run. The property may be the right price, but are the taxes too high? Consider that when a home on that piece of land because things like schools, insurance, and impact fees come into play. A Impact fee implies an forceful entry on the community. In that case, a one-time fee is charged when you apply for a building permit. The fees are to help fund the police, fire department, and schools of the local area.
Transportation
Do you require the presence or absence of public transportation? Also, do you know if the city or county has a 5, 10, 15, or 20 year plan that includes a road in what was once a beautiful view from your property location? You should know this before you buy. The county office can tell you if your land will be affected by long term plans.
Moratoriums
On occasion the county may put a moratorium on building. If that is the case, you will not receive a building permit to build your home on your own land. Moratoriums are issued for several reasons; however, common causes may be the lack of water, roads, schools, police and fire departments. In other words, the county or city has to reduce building until local facilities can meet the growth needs. They are not permanent, but it can delay the building of a home on your land for a few years in the worse case scenario.
Conclusion
There are several other things that can be looked into such as site preparations, variances, and so on. However, the aforementioned list is a solid foundation on how to buy land to build your home. Using the services of a land realtor is advisable. Buying land to build a home takes a great deal of research, patience, and knowledge about the process. You may feel a little nervous about making the purchase, especially when it involves a big ticket item such as land. However, if you devote a little time, effort, and due diligence, you can work your way through the apprehensions. In the end, you will realize that this can be a very good investment if done right.