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How to Buy Land and Build a House


Have you ever had a dream to build your own home? You’re not alone! Building a custom home that fits your every need and fulfills your entire wish list IS a dream come true. Getting to that point of the dream can be a long and frustrating process if you don’t know where to begin. This guide from BC will help walk you through how to buy land to start the home building process.


Step One: Find Land For Sale

Undeveloped land is actually a little difficult to come by. In some areas, you may have to approach land buying creatively, such as buying a home that needs a lot of TLC in a location you love, only to completely tear down the home. This can get costly fast, though, so leave that as your last resort.


We first recommend starting online, like on Zillow or Realtor.com. You may find some good options, but you also may not find the best deals. If that’s the case, then ask around or check out our off-market property site! Well-connected community members may know some sellers, and real estate agents may have the inside scoop on some undeveloped land for sale. Real estate agents will also know more about zoning, any restrictions, and zoning changes too, which is invaluable information to have when you’re looking for land.


If you’re still coming up dry, dig a little deeper!


Look Expired Listings

Another great way to find land for sale is by looking beyond active listings to those that are expired and withdrawn. Just because a listing is expired, doesn’t necessarily mean the owner isn’t interested in selling it!


Selling land is much slower than selling a home — it could take months, to even years, for sellers to find the right buyer. An expired listing could simply mean that the seller is taking a break from looking.


Filter Out Inappropriate Lots

You’re likely going to find a lot of land that won’t work for your future home. It could be a zoning issue, a location issue, a weirdly shaped boundary, or just suitable for building the home of your dreams.


Take a look at the location and the comparable prices of homes in the neighborhood as well. This will let you know if your home will be priced out of the area, or if it will fit in nicely.


Step Two: Vet the Property

Once you find the perfect piece of land, you’ll need to determine if it really is as perfect as it seems. Here are four important questions to ask.


1. How Is It Zoned?

Zoning affects what can and can’t be built in an area. You can’t build a residential home in a commercial zone, for example! It also affects how big of a home you can build, as it must fit within the setbacks of the property.


Setbacks are restrictions that determine where you can and can’t build on the property. A title search can reveal any easements associated with the land!


2. Are There Utility Hookups?

Undeveloped and raw land likely won’t be connected to any utilities, so you’ll need to work that into your budget. Do your due diligence to understand if the utilities you need are available: water, natural gas, sewer, etc. You may want to pass on a home if you have to do extensive work to get running water or electricity to it!


3. How Much Preparation Will The Lot Need?

Connected to our last point, undeveloped land will likely need more preparation, such as clearing, grading, and adding utility hookups. If the lot is in a flood zone, you’ll need to consider drainage costs as well.


In addition, if there are any existing structures that need to be demolished, you’ll need to get an estimate for the work and debris removal. This can all add up quickly, which may shatter the illusion of the “perfect” land.


4. How Much Time Do You Have?

Finally, think about your timeline. Building a house takes a long time, but building a house on undeveloped land will take even longer, thanks to all of the land surveys, bids, and preparation that will need to occur. If you have the time for this project, then go forth! If you don’t, then you may want to look into developed land first.


Step Three: Finance Your Land Purchase

Financing land is not like financing a house. Many banks may not even want to give you a loan, though there are a few options to consider.


  • Land loan: If the property is undeveloped, or considered “raw land,” a land loan may be best.

  • Lot loan: If the property is already connected to utilities, or has at least been surveyed and permitted for construction, you may be eligible for a lot loan.

  • USDA Rural Housing Site Loan: If your desired plot is in a rural area, consider applying for the government-backed USDA Rural Housing Site Loan, which might be more accessible

Step Four: Prepare To Build

Once you have the land ready, it’s time to make sure your net time and investments pay off with a quality home. Don’t underestimate the importance of hiring the right professionals to make the process as smooth as possible.


Hire The Right Professionals

Buying land and building a house can require quite a bit of juggling. You’ll likely want to assemble your team in advance to ensure the best professionals are available to inform the type and size of home you are building.


You will want all of the following on your side:


  • A land developer

  • An architect

  • A general contractor

  • A builder


We recommend looking for a company that can do it all, like us at BC! It will make everything much more convenient to you and will simplify the process in general, as you won’t need to keep track of different teams and contractors — just us!


Get The Permits

The right general contractor and land developer will be well versed in what permits you’ll need to get. Once the permit is in place for them, the professionals become the “responsible party” for the work being done. So if it’s the contractor, that means they – not you as the homeowner – are on the hook for making sure that the permitting process was done correctly.


They will also be able to help estimate permit costs, which will vary depending on your home size and costs imposed by your specific municipality.


Start Planning!

Now that everything is in order, it’s finally time to start planning and developing the land. This is where everything starts to feel real — the developer and architect will survey the land to determine the best place to build, and the architect will start sketching. From here on out, all you need to do is keep up with meetings and payments, and stay patient. Your dream home is underway!


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