We have sold many properties, some of which have been lots and land. There are many people who would rather buy an open space and build their dream home, and hey, we get it. However, as with any dream, you'll need to be prepared for all outcomes. We've compiled a list below to make things a little easier for you.
1. Ensure the Land is a Proper Building Site.
Now this one may seem obvious but you'd be surprised by how many people buy land without doing their research. This is one of the most important things you can do. Do you really want to buy land to find out you have to put more money into fixing the site than building your home? You have to research everything from slope to grading land and tree removal. You'll have to consider things like driveways and access to the land itself. Once you've done your own research, it will be good to get a second opinion.
2. Pick Your Builder, Architect, & Contractor.
This step may be first or second depending on how much experience you have with lots & land. You can get the gist on your own but if you're a complete novice, I'd pick your team first. They'll be able to walk you through the building process and give you advice on your land.
3. Conduct a Soil Test
You will absolutely, without a doubt need to conduct a soil test to determine if if you'll be able to set up a septic system as well as proceed with the development phase. If the soil is too soft, your home could risk a multitude of issues.
4. Get All of Your Permits
Your local jurisdiction will be able to show you on a zoning map which piece of land can be used for in terms of single-family, commercial, etc. You will still need to do some of your own research on this and then confirm with your local jurisdiction on which zone your land falls into.
5. Plan Your Financing
We recommend this as one of the first steps before even making an offer on the land. You should have a rough estimate of what this build will cost you so you can be prepared. If you don't have enough financing as a cushion then you should probably avoid buying the land in the first place. It's better to be over-prepared than under-prepared. You can even get multiple loans such as land loans (to purchase the land), a construction loan (for building), and then you can get a separate loan for the mortgage.
6. Consider Utilities
Living remotely may seem fun in the movies but realistically, not everyone is going to want to rough it. You'll want to ensure that you can get power, gas, water, and internet. This can be done by simply calling the local utility companies.
7. Obtain a Recent Survey of the Property
A survey will basically explain the exact lines of the land you own. It will help you determine exactly what you're buying in terms of your surroundings. If your seller doesn't have one, it's worth investing to obtain one yourself.
8. Conduct a Title Examination
Have an attorney review the title for you. They can research through county records and review the chain of title to ensure you have one without liens, excess mortgages, encumbrances, easements, etc. That way you'll know exactly what you're signing up for.
9. Appraisal of the Property
Your realtor will be able to verify the true value of the property but if you'd rather get a second opinion, you can place a appraisal contingency in your purchase contract and a pay a couple hundred dollars to have an appraisal done. That way if the appraisal is lower than your purchase price you can renegotiate.
10. School Districts
This won't apply to everyone which is why I made it last but if you do have children to consider, you'll need to call your district to see which school system you were in and do your research!
I hope you see the recurring theme of DO YOUR RESEARCH and take this list as a beginner's guide to buying land. If you have any questions or concerns, please reach out to us and our licensed, experienced realtors will be happy to help!