What You Should Know About Buying Land Before You Build Your Home

by Ellen Johnson 11/15/2021

Image by Paul Brennan from Pixabay

Have you always wanted to design your dream home at a location of your choosing? If so, buying a plot of land to build your customized home on is probably your best option. Before getting started, you'll want to do your due diligence to ensure you're making a smart investment.

Find a Property to Build on

The concept of customizing your home is an ideal one, but the reality of finding the perfect plot isn’t so simple. You can check listings, but there are several other ways to find ready-to-build-on land.

  • Ask locals about available land in the community you’re considering.
  • Look at expired and withdrawn land listings.
  • Ask your real estate agent about land purchased by previous clients but never built on.
  • Investigate classified ads to find sellers listing property independently.
  • Check realestatesales.gov to see if the government is selling off repossessed land.
  • If you find land approved but not yet suitable for build, you’ll also want to take clearing and grading the land into consideration.

    Understand Local Zoning Laws

    Some municipalities are stringent about how land can be used. Before you buy, it’s critically important to understand local building restrictions and zoning criteria. Any number of scenarios might prevent you from building your home. Here are just a few.

  • Property is zoned for agricultural or commercial use.
  • Size of the house you plan to build exceeds the maximum size septic tank allowed to be built.
  • Parcel of land is designated an environmentally-protected parcel (i.e. wetland).
  • Someone other than landowner owns mineral or timber rights.
  • Easement or access rights are attached to the land.
  • Be certain to understand every possible building restriction or zoning requirement before you purchase land. It would be disastrous to discover you can’t build your dream home the way you planned.

    Utility Hookups

    Does the land meet local criteria or have the right terrain for these necessities to be installed? Utility hookups are a detail you don't want to overlook—ensure you'll have access to water, sewer, electricity, natural gas and Internet. If no public water or sewer lines exist, you’ll need to learn about wells and septic tanks.

    Understanding the Financials of Buying Land

    Obtaining funding to buy land is a little different than taking out a mortgage to buy an already existing home. You’ll typically have a few options including paying in cash or getting a loan. Types of loans include land or lot loans, construction loans and seller-backed loans.

    These loans are usually short-term and involve high-interest rates because lenders generally perceive land purchases a riskier gamble than home purchases. As with any major purchase, carefully evaluate your financial situation and consider future expenses and other contingencies before committing to a loan to purchase land.

    Building your home on a plot of land takes additional planning because there are numerous details to explore before you can even begin to get started. While building a home is a more complicated process than buying an existing one, customizing a new home is a far more fulfilling investment for many people.

    About the Author
    Author

    Ellen Johnson

    I am a longtime time resident of Plymouth, I started my love of the area as a summer resident who was lucky enough to spend summers at the beautiful Priscilla Beach. I am a successful business owner who owned the first salon and day spa in Plymouth. I sold that business and started a highly successful women's clothing and accessory store also located in Plymouth.  My love of the area and real estate brought me to a new chapter in my life full time real estate sales.

    Leveraging my experience as a business owner known for outstanding client service, high tech marketing and a personal touch that is needed in a real estate transaction I have guided my sellers and buyers through the complicates process of a real estate transaction. I am proud to say that I received the International Diamond Society designation, awarded to the top 11% of all Coldwell Banker Affiliated Sale Associates consecutively the most recent year 2020.

    I am grateful for my wonderful husband and 3 beautiful children. Also, to live on the South Shore of Massachusetts. I can truly say there is NO PLACE LIKE HOME!