Buying Land

You’ve found the perfect house, but the land it sits on isn’t quite what you have in mind. Or maybe you’ve seen a great piece of land, but the house doesn’t fit your needs. If nothing really says home to you, it might be time to consider building. Buying land may seem intimidating at first, but it really isn’t difficult at all if you plan a course of action and stick to it.

Know Your Budget
Talk with a loan officer to find out how much you can afford. Both down payments and interest rates can be higher for land than for homes, so it’s important to get the facts before you go shopping. If you plan to build soon, the loan officer should explain construction loans, including the closing procedures you’ll encounter while the house is being built.

Building Costs
Talk with area contractors to determine the average price you can expect to pay per square foot for the type of home you wish to build. Include estimates for building a driveway or road to the homesite. Don’t forget estimates for well digging and septic installation if your home will not be connected to community water and sewer.

How much will it take to construct the home?
To find the maximum amount you can spend for land, deduct building costs from your total budget, then deduct a bit more for unexpected expenses.

Target A Location
If you’ve already looked at homes in the area, you may know where you want to build. List locations by order of preference. If you’re undecided, become more familiar with the area by driving around, reading newspapers, and talking to locals.

Your Wants and Needs
Make a list of all features that would exist on the ideal piece of land. Review the list, highlighting your must-haves, such as a great view, privacy, or a waterfront building site.

How Much Land Do You Need?
What’s the minimum size lot or tract of land you are willing to consider? Keep in mind that a heavily wooded, 1-acre lot may be more private than a 3-acre lot that’s all lawn. Tour a variety of neighborhoods and pay attention to the environment.

Land Use Considerations
How will you use the land? If you plan to build a duplex, you must choose a site where zoning or other restrictions allow multifamily dwellings. If you know you want a manufactured, consider only tracts of land where those structures are allowed.

Consider Restrictive Covenants
Developments are governed by guidelines called Restrictive Covenants. I know of one development where cats are not allowed, even if they are indoor pets. Some dictate paint colors or have an architectural review committee that must approve your home plans. Study covenants carefully to determine if you can live with them.

Start Your Search
Look for ‘For Sale’ signs as you browse the area. Search for properties on the Internet. If you see interesting tracts of land, note their exact location. Find a real estate agent who likes to work land sales. Talk with the agent about all of the categories above, and any others that might help you locate the perfect parcel.