Have you always dreamed of owning a home in a quiet corner of the countryside away from the city? If so, building a house on a plot of land might be the best option for you. That’s why Land Resellers would like to provide you with everything you need to know about finding and buying land to build a house on.
Searching For Available Properties
While designing your own home may be a dream come true; finding land to build it on isn’t as easy as you may think. While you can always keep your eye on the market with land listings on Zillow or Realtor.com, these listings aren’t always the best deals.
Instead, sometimes the best way to find available properties is by word of mouth. This includes reaching out to brokers in the local area that you’re interested in living in. People who live in the community or an agent or online platform like Land Resellers that specializes in land will know more about local land buying opportunities.
Another great way to search for available properties is to look beyond active listings and focus on those that are expired or withdrawn. Why? People often purchase land but determine the process is too hard to develop and build, so they decide to sell the property. They then find out that selling land is equally as difficult. If their listing expires several times, they eventually give up until someone approaches them about selling it.
That’s why it’s always a good idea to drive around the area where you want to build and scope out vacant properties. Once you identify a potential lot, you can find the owner via property tax records and contact them directly. This process has helped many buyers identify and purchase vacant parcels with success.
However, it’s important to remember that you don’t want to purchase a cheap lot to build an expensive home on it. Why? You may diminish the value of your home in the long run. The same goes for purchasing an expensive lot and building a small, cheap house, which would lower the land value. Instead, you should plan to build a house of a size and price range that’s common for the local area to prevent any valuation problems down the road.
Do Your Research
Finding land that you love isn’t enough. Additionally, you will want to do plenty of research to ensure a property can accommodate your building plans in a cost-effective manner. These include:
Zoning
When it comes to buying land, the first thing you need to do is check the zoning of an available property to see how it can be used. You don’t want to be stuck with a commercial property if you plan on building your dream house. Zoning is a legal term used to describe how a plot of land can be used. You don’t want to be tricked into thinking you can purchase land at a low price, but you can’t do anything with it. To check the zoning of a property, contact a local zoning board or planning commission.
Utilities
If you’re purchasing land, it’s essential to know what utilities it comes with it, and what you will have to install or hookup. This includes water, gas, power, sewer, etc. You may have to dig a well, install a septic tank, and run power, which can cost you thousands after you purchase the land. It’s also important to be wary of listings that state that utilities are located nearby. These hookups could actually be miles away, and the costs to run them will vary widely based on where your property is located. Instead, do your research on what comes with the land and what it will take to develop, so there are no unwanted surprises.
Clearing & Grading
Clearing and grading of raw land can be extremely expensive. In fact, landowners can expect to spend thousands to clear a property depending on its location before a house can be built. In addition, if there are any existing buildings or foundations that need to be removed, this can cost you even more for the work and debris and removal.
Land Financing Options
While some people are able to pay cash for land, not everyone is so lucky. Below are a few land financing options to consider:
Land Loans
A land loan is financing you can obtain to purchase raw land. However, the rates for a land loan are often much higher than a typical mortgage because these loans are much riskier for lenders to give out. If you purchase a property but walk away from it, a lender will have a much harder time selling it. Therefore, down payments, interest rates, and defaults tend to be much higher.
Construction To Permanent Loans
A construction to permanent loan is based on the construction of a home that will become a regular mortgage once a house is completed. This basically means two loans (a land loan and construction loan), which are combined over time.
Owner Financing
One of the biggest advantages of owner financing is better financing options. Unless you had all the money upfront, you wouldn’t purchase a home without securing a mortgage from a bank. Large investments like these require backing, and most people can’t purchase a house without a loan. In fact, many land owners provide their own financing options so that they attract more buyers with a hassle-free opportunity to purchase their land.
Benefits of landowner financing include:
- Lower interest rates
- A lower down payment
- No stringent paperwork.
That said, it’s extremely important to have legal guidance when going this route. You don’t want to have to deal with any surprises like back taxes or liens. There are plenty of desperate land sellers out there that want to scam buyers. That’s why it’s important to do your research and make sure everything is done legally before handing over your hard-earned money.
The Bottom Line
As you can see, the process of buying land can be a bit trickier than expected. However, by having a good understanding of everything that goes into it, you’ll avoid unwanted surprises when it comes to building the house of your dreams.
Need some help searching for land properties? Land Resellers can help. As an online marketplace designed to buy and sell land, we can help you search for specific land properties in different parts of the country that match your unique criteria and budget. With detail-rich listings, you can also view important information like land type, location, acreage, price, and other specifications. You can also compare different properties using numerous filter options and side-by-side comparisons to find the ideal property you are looking for.