Buying Land for Building...

Almost everyone dreams of building their own home. In must be something innate in us the declares the need to create, personalize or perhaps it is the understanding of built-in equity. Whatever it is, there are several things to consider before jumping in.

Benefits to purchasing land

The primary benefit to purchasing and developing your own land is cost
Also, picking everything to floorplan to details makes the home feel like yours.
Ensuring the design takes into account your values; for example, green built homes, fung shui, or specific hobbies like gardening or working on muscle cars.
Space, land usually is purchased for larger lots/acreage.

Drawbacks to purchasing land

Lending

working with the landscape requires adjustments to the original design idea, and all the decisions can be overwhelming. I counsel many people that the stress of these decisions is where you build your equity.

cost of custom changes

Time

Development costs are not set in stone, a bid today is not always what will be approved for with the final permit to start construction

Factors to consider before purchasing land:

Utilities

Water and sewer are the top priorities. Most lenders will not allow any financing if water is not available. Sewer or septic cannot be established without taking where and how water is made available to the parcel.

You can save money by digging the utility trenches yourself. Call the power company, telephone company, and cable company and ask how much per linear foot, connection costs, and any other fees or restrictions to get an idea.

Financing

Financing can be tricky. Lenders do not like vacant land because it is easy to walk away without paying your bills so there is a higher rate of default. You credit score must be good, most of the time you need downpayment of at least 5%, although there are a few local companies that do an all-in-one kind of construction loan that is a bit more forgiving.

Water must be available and potable for almost every lender around. This is to ensure you are not buying a high risk property.

Zoning

Easy information to find, but don't skip. You want to ensure that the land fits your needs. Very important to know if the county is redefining its zoning in the near future.

Location

While looking at the zoning, take a look at nearby zoning. Is commercial creeping in, is there industrial just down the street? Are they putting in a park nearby or a mobile home park or condominiums? Each of these answers will help you decide if it falls in line with your dream home.

Geo-tech

You will be required to hire specialist for several parts of the development. Topography is imperative to take into account. The county can give you a map of what is known about the soil and any hazards or environmental concerns that are already mapped, but you will likely need to hire a surveyor and a geo-tech to ensure the bumps in the road will not cause a stop order.

Easements

You will need to review the title report for easements already recorded and likely need to have new ones made and recorded for the utilities and access.

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