Purchasing Land to Build a House
If you’ve got a vision and a mission, then purchasing a vacant lot may be the best way for you to make your dream home a reality. Whether the current properties on the market don’t fit your style or aren’t up to functionality, buying land gives you the opportunity to start from the ground up. On top of that, you have the full freedom to live in that home, turn it into a cash flowing long-term investment, or even start your own business.
While the potential is limitless for a vacant parcel of land, you’ve got to keep in mind all the regulations and rules that could revolve around it. Staying within guidelines requires some real estate knowledge, which is why we have everything you need to know about land purchasing.
What to Consider Before Buying the Land
Regardless of your intentions, there are countless benefits to owning your own piece of land. It allows you to escape the ever-competitive housing market and frees you from the more restrictive neighborhood governances. However, this freedom doesn’t come without a cost in terms of the factors you’ll have to consider. Take a look at some of the most important points and keep them in mind as you conduct your research:
In the world of real estate and construction, you’ll need a permit for just about everything. Even though these permits can seem like a huge hassle, try not to think about them as roadblocks. Instead, view them as a quality check to ensure that your building isn’t built haphazardly and won’t fall apart as soon as you move in. They’ll offer peace of mind as well to know that whatever you’re constructing is well within the legal requirements and won’t get you in trouble.
- Road Access
Imagine stumbling upon a gold mine of a vacant lot, only to discover with disappointment that it doesn’t connect to a nearby road. While this problem is certainly more common in rural areas than urban, it’s certainly one that you don’t want to neglect. What a lack of roads can indicate is also a lack of access to public maintenance such as waterworks and sewage systems, which can add up on a hefty construction bill. If, however, you see that there are private roads that you could possibly use, you could enter into an easement. This type of agreement will allow you to access a private road through a neighbor’s land upon their approval.
While any plot of empty land might look the same to you, it’s absolutely crucial to note its underlying resale value. On top of that, you must consider the land in the context you want to use it for. Want to create a successful business? Don’t build far away from your impressionable customers. Desire to construct a home for your family to grow in? Don’t purchase a plot of land only to find out that its conditions aren’t suitable for construction. To tackle these questions, you should do some research around the area you’re thinking about. Take a drive around and use tools such as Google Maps. Don’t be afraid to explore around to ensure that your purchase is worth it.
- Surveying & Insurance
Throughout the mortgage and lending process, it’s recommended that you purchase title insurance. This can not only help shield you against legal complications but can also make up for any damages and losses that you encounter. What you should also know before closing the deal is what the boundaries of your land are. To get a clear idea, that’s where conducting a land survey comes in. It can help you in the constructing process and determine whether your land is suitable to be built upon.
- Zoning Restrictions & Ordinances
Once you buy your land, you might think you could do anything you wanted with it. However, you’re forgetting that zoning laws and certain ordinances can put a halt into your vision before you even begin. In a nutshell, these restrictions dictate what can and can’t be done on your plot of land. Certain areas are designated for residential building, so you should consult your local zoning office or do some research online to find records on your parcel of land. At the same time, make sure to also weigh what the county plans to do with the surrounding land into your headspace. It could mean the difference between a calm home environment and the inability to sleep because your property is located right next to a highway.
The Basics of Purchasing Land and Building a House on It
Now that you have background knowledge on some of the most important considerations to keep in mind, you’re now ready to explore the step-by-step process to acquiring your own piece of land.
- Find Your Plot of Land
There are plenty of home buying websites where you can track vacant lots, as well as websites such as LandWatch and LandFlip that are specially created to help with land purchasing. For more in-person help, you can also work with your local real estate agent for quick alerts and tips.
- Financing Options and Cost
Because financing a parcel of undeveloped land is different from buying your average home, there are several special loan options that you can explore and take advantage of. A new construction loan, for instance, will allow you to plan for the land purchase and the construction of your home. On the other hand, a lot of land loans allow you to finance a piece of land that’s already prepared for residential development. If you’re unable to qualify for any of those loans, you’re still able to finance your land with the options of a raw land loan and seller financing.
- Understand Zoning Restrictions
As noted before, zoning restrictions are crucial to understand before you make any final purchase. Do your own research, ask your local county office, and reach out to your trusted real estate agent to get the most of your planning.
- Suitability for Construction
Even though a parcel of land might look perfect for home building, what goes on below isn’t always obvious to the naked eye. By having a professional conduct a land survey, you’ll be able to get a full gauge on the land’s exact boundaries and its potential to be constructed on.
- Utility Cost
After you budget out your money for the land buying itself, you shouldn’t forget to add in the cost of utilities — especially if the land is undeveloped. Be sure to add the cost of a well, septic system, and electrical lines into the equation to make sure you know the full extent of what you might have to shell out of the wallet.
- Obtain Quotes
At last, you’ve finally arrived at the last step! With all the research you’ve done, it’s time to approach multiple contractors and compare the in-depth quotes that they give you. Pay attention to all the details, including the timeline and the expectations. Having a real estate agent alongside you can be a great resource in determining which quote best fits your needs to get started constructing.
And with that, you’re now empowered to find the land plot of your dreams. To properly ensure that it’ll offer you all the flexibility and freedom you’ve desired, a real estate agent can help you at every step of the way. Here at Brian Burds, you’ll find that our team of experts have the capacity to turn your vision into a reality.