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• Look at expired and withdrawn land listings.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 the build, you’ll also want to make clearing and grading the land into consideration.
Some municipalities are stringent about how the 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.
• The size of the house you plan to build exceeds the maximum size septic tank allowed to be built.
• A parcel of land is designated an environmentally-protected parcel (i.e., wetland).
• Someone other than the 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.
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 the 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 slightly different from 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 as 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.
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Dedicated to providing exceptional, personalized service, Real Estate Broker Mike Flannagan takes pride in the relationships he builds, working relentlessly on your behalf. Mike is a Northern Virginia real estate expert with extensive experience in Fairfax, Loudoun, and Arlington Counties. Click here to get to know him better.
