The Ultimate Guide To Buying Land To Build A House

Finding vacant land is often more challenging than it appears to be. Numerous factors may affect your decision while purchasing land for the new construction. Let's look at some of the most common ones.

Find Land Available For Sale

Finding the perfect land for your dream home is just as complicated as any other property decision. First, you need to consult multiple real estate agents for full options. Real estate agents will show you all the active listings.

Once you filter out properties with the most potential, with the help of an experienced real estate professional, pick a land that is most cost efficient. Also, according to most property experts, the land cost should only be 20-30% of the construction costs. Do the math before making a final decision!

Additionally, make sure the land you have chosen is the right one before getting it approved. A tip is to make sure the land has utility lines since many lots in rural land have terrible cell phones or internet reception. Some lands don't come with utility hookups, and you will have to dig a well or share it with another property. Don't forget to check if the lot has a power supply, water, sewer, or septic systems.

Preparations And Approval

Finding vacant land in a decent area is not the only step, but it is also a very important one. To obtain approval, go to the local zoning authority to determine if the land can be used to build a house before taking any other steps.

Financing Options

Most people don't have the cash readily available for land purchase or construction. If the land you want to purchase is considered undeveloped or raw land (land with no utility lines and fixtures), you are eligible for land loans.

If you already have the money to pay for the land purchase, you won't have to go through extensive financing procedures. However, if you don't, there are financial options available. Keep reading to learn more about how you can afford to buy land to build a house.

Building Process

Once you have found land and figured out the finances, research professionals in your area that can help you build your dream home! These are some of the key professionals you need to consider.

Building a house on vacant land requires a ton of responsibilities, not the least of which is getting the perfect land and having decent building skills. When building a home, you need to create a bucket list to minimize extra costs. Here are a few things to keep in mind:

The first question for many that pops up when building a dream home is, “how much land should I buy for the house?”

This varies from person to person, with some people preferring large lands to raise animals by their house while others may not be able to afford that. 

This brings us to the other crucial point - comfort and affordability. The bigger the land, the more you have to pay upfront (down payment), and the higher the property taxes.

Close your eyes. When you imagine your perfect home what do you see? Do you see beautiful scenic views? Can you hear the birds chirping in a woody wilderness? Or do you imagine a posh neighborhood with high-end mansions? Based on what you have imagined, ensure the area you choose matches where you want to live for the next few years (or even after retirement).

Once you decide where you want to buy land and build your new house, you need to determine what will make this house unique. 

Most individuals want to build their own house and want to customize it fully to their liking, and many times, they have been unable to find something they like constructed already on the market. Let your contractor know in advance whether you want to raise animals in your backyard or enjoy a mini-golf course.

Before actually moving forward with purchasing land, look into the by-laws of the state you are building in.

You need to do your research beforehand to have an idea of what you are getting yourself into. Is there anything you aren’t allowed to do? Ask your real-estate agent to help you figure out the details in advance.

When it comes to building a custom home, one of the main issues is electricity. If the property is raw land or, in other terms, completely undeveloped, you will need to look for an electric service that will provide electricity to your home.

If you purchase undeveloped land, you must go to your local municipality to check if you have to drill a well or need a permit to share it with another existing home. If the vacant land you purchased doesn't have a sewer, you may need a septic system that includes a septic tank and a drain field.

Now that you have decided what type of house you want to live in, you should start looking into the property market.

Finding the perfect property takes time. While it may seem like there is a lot of land available and you are bound to like something, do not wait until the last minute to start looking.

Make Use Of Real-Estate Website

One of the most accessible options is to open your computer, log in to a real estate website and filter your searches. Once you find the property that matches your description, call your local real estate agent and ask for a showing.

Word Of Mouth Is More Helpful Than You May Realize

Talk to people around you that are buying land or have bought land in the past. They have experienced the steps that you will be sharing soon! If you have no one around you that has gone through this, search for groups on social media. Make the connections so you have others to reach out to if you want advice or have questions.

Search For Expired Listings

Another way to buy land is to look into expired listings. A real estate agent has access to these listings and will help you. After some time, if there is no market activity, the listings expire and are no longer available on the realtor sites. This may be a brilliant option as not many people know about the property, and there are fewer chances of a bidding war.

Drive Out To The Area You Are Interested In

Just like you would go to a mall to buy something for yourself. Similarly, you can search for land by driving to the area you want to settle in. Some sellers put "for sale" signs on the property, so get searching!

Hire The Best Real Estate Agent

Hiring an expert real estate agent you trust is much more important than you think. A real estate agent can assist with finding you the perfect land and helping you make the final decision. The entire process is long and could get complicated, so a professional needs extra help to guide you. This is especially true if you are a first-time buyer, where you need an expert to make sure you do not become a fraud victim. A realtor can also help you save money on the land.

As soon as you find the plot, the main concern is how you will make the purchase. The first option is to buy it in cash, but not everyone has disposable money lying around in their bank accounts, so the other option is financing. Some of the alternatives are listed below.

Cash

More often than not, the land has to be bought in cash, especially in the rural areas. There's an upside to paying in cash, mainly the fact that the lender is more likely to finance the construction of a house on the plot.

Types Of Loans

If you don't have the money available, you can always get conventional loans. Talk to your real estate agent and your bank to find out what loans you are eligible for or whether financing is an option for you.

A building permit allows you to begin the construction officially. Having the permit proves that the building plan has been approved. To start the construction, you first need to finish closing the land. To obtain the permit, you may need to prove that you are legally the owner of that land.

Once you get the permit, you are good to go and ready for construction!