Buying Land to Build a Home? Here’s what you should know.

Are you building your own home? If so, are you buying land to build a home or are you buying a home with the land included? There is a difference. Securing the land first will make the process of finding or developing a perfect set of home plans a much more productive adventure.

Buying a plot of land, raw land, is not the way most people go into building their home. The normal process for a majority of home buyers is to buy a home in which the land is apart of. Many home owners do not have an ideal of the work that the builders or developers put into acquiring the property on which their home sits.

You will find the following information valuable to your process if you are buying land to build a home. To be sure of your decision, you must know what to look for when buying land to build a home. Below are a list of items that you should be aware of in order to protect yourself. The list is not exhaustive, but it includes some key advice on purchasing land and should be a part of your home planning checklist.

Checklist For Buying Land to Build a Home

  1. The value relative to you – 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.
  2. Land zoning – You must determine if the property is for residential use. It is crucial that you know this information. You wouldn’t want to be buying land to build a home and later find out that you can’t build your home because it isn’t classified as residential. Land is generally zoned as agricultural, commercial, industrial, environmental, as well as residential. This also dictates whether you can build a one story house plan or two story house plan.
  3. Land Restrictions – Buying land to build a home does not give you free will to do whatever you please on the property. The local city and county have restrictions by which you must adhere to. These restrictions are known as zoning ordinances. Get a copy of these ordinances before you purchase the land. You may have to pay a small fee. The ordinances will detail what you can and can not do to the property in that particular city or county.
  4. Property Topography – The lay of 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 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.
  5. Condition of the soil – If you have issues dealing with the physical land itself, a soil analysis may be in order before buying land to build a home. Actually, it’s just a good idea to have this done anyway. Sometimes the owner of the land may have already had one completed. You should invest a few hundred dollars for this if the owner hasn’t. Subtract the cost from your offer on the land. You should know the content of the soil before buying land to build a home. Does it have an abundance of rock? It can prove too expensive to remove. Is it junk soil and lack a degree of sturdiness? You may find yourself digging deep to find hard soil to support your homes foundation. Maybe the land emit radon gas. If so, you should know so you are able to properly ventilate or prevent entry into your home. The county usually requires a perk test to determine if the soil can filter if installing a septic tank. In case it doesn’t, you can not build.
  6. Public 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.
  7. Subdivisions – 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.
  8. 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.
  9. Cost of ownership – How much will it cost you to own the land? Some areas are more expensive than others and this will be noticeable when you receive your property taxes.
  10. Moratoriums – Check with the county to verify if you are able to obtain a building permit to build. You might discover restrictions in place to slow the growth of areas that may be outpacing the resources (roads, schools, police, fire dept) and facilities (sewer, water) of the county. This can happen at any given moment. It is wise to find out if this would affect the land you are considering for purchase. Moratoriums are not permanent, but it can delay the building of your home for months or years.

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.

Last Updated on July 12, 2023

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