Step 3: Finding Land for Your New House

The first, very important step in building your new house is finding the right place for it. Do you want a lot in a new community for your semi-custom home? A remote acreage in the mountains? Something on the lake or near the ocean? Consider how close to the city center you want to be. If you choose land that’s a bit more remote, how far away is the nearest shopping area?

If you’re going with a semi-custom build, the neighborhood likely already has road access, an electrical grid, and a system for water and sewage. However, if you’re looking for land for a custom build, you’ll want to consider how you’ll gain access to these things. You may have to pay the power company to install electric poles near your property. If you’re close to a city or town, you might be able to get access to the municipal sewage system; if not, you may need to install a septic system.

Start looking online for properties. If you’re using Homes.com, search the area in which you want to live, then, on mobile, navigate to the filters at the top of the screen. Scroll down to “Home Type” and select “Lots/Land” from the drop-down. On desktop, simply select “Home Type” at the top, then click “Lots/Land.” You’ll be able to see the property size, the location, and details on utilities, taxes, and features.

Find the Right Real Estate Agent

As you start looking at property, find a real estate agent with experience in dealing with land. An agent who specializes in land deals can help you find and compare properties that will best fit your needs and help you with things like zoning regulations, local laws and building codes, and environmental concerns. They’ll also help you find the right location and the right price. If you spend a large amount on land and design a house that’s out of step with the area’s home values, you may not be able to get a construction loan. Your agent can work with you to make sure you aren’t overspending for the area.

If you’re buying a lot for a semi-custom build, it’s still important to have a real estate agent on your side. Your agent will likely know the reputations of area builders and can guide you toward the ones that would best suit your needs. And while builders are often firm on their prices, your agent might be able to negotiate upgrades, design changes, or closing costs.

Building a home is a complicated process that involves a lot of paperwork — far more than what’s involved in buying an existing house. A real estate agent who is familiar with land deals can help you navigate all the forms, disclosures, and agreements you’ll have to fill out and sign. They can also assist you during the walk-through and inspection process.

Buying Land for a Custom Build

As you begin searching for land, be on the lookout for these three words: raw, unimproved, and build-ready. Raw land is nowhere near ready to build and may not be for years to come. Unimproved land won’t have any basic services or utilities, so it could cost you a lot to gain access to these, not to mention the time it will take, which could be several months. Land that’s build-ready has everything you’ll need to start construction once you’ve pulled your permits. You may find it a bit easier to get a construction loan for a build-ready lot since there’s less risk involved for the lender.

Check the zoning for any land you’re considering and make sure it’s zoned residential. Then, check the land around it and make sure it’s also zoned residential. You don’t want to buy land only to have the property next to you zoned commercial or agricultural. Make sure the zoning is correct because it could take years to get a zoning change approved, depending on where you live.

Check to make sure the property isn’t in a flood zone. Even if the property isn’t in a high-risk area for flooding, consider purchasing flood insurance anyway, since flooding can happen anywhere. Also, get the land inspected to make sure there’s no soil or water contamination.

Choose a location in an area that is either high-growth or has the potential to become high-growth, especially if you plan to sell the home in a few years. You’ll want the property value to increase over time, so find an area with a growing number of new residents and businesses. Your real estate agent will be able to help you find these types of communities.

Selecting a Lot for a Semi-Custom Build

When selecting a lot for a semi-custom build, the builder will provide you with available plots. They’ll probably give you plot plans and maps for the neighborhood that show you where the clubhouse, parks, and other community amenities are or will be located. When looking at available lots, pay attention to the following:

  • Location: An interior lot faces just one street with the back yard behind the house and neighbors on either side. A corner lot will be larger with less proximity to neighbors, but you may deal with more traffic and have more lawn to maintain. If you choose a lot at a T-intersection, oncoming headlights might be an issue.
  • Access: Lots near the entrance of the subdivision or close to a major roadway means you’ll get in and out of the community faster, but you might experience a lot of road noise. If you prefer walking or taking public transportation, being farther from the entrance might make it more difficult to get where you want to go, whether it’s the corner market or the bus stop.
  • View: Lakefront or mountain views come at a premium. If you can’t afford the higher-priced lots directly on the lake or those with the best mountain views, consider land that’s farther away but still close enough to enjoy the scenery, such as directly behind those lots.
  • Slope: Will that steep slope leave you with less usable backyard space or a driveway that’s impossible to navigate in ice/snow? On the other hand, a gentle slope might be ideal if you want your build to include a walk-out basement.
  • Exposure: If you plan to do a lot of outdoor entertaining or gardening, you might want a lot that faces southwest so you’ll have ample afternoon sun. If you’d rather have a low-maintenance yard that’s cooler in the summer, a northern exposure may suit you better.

Questions to Ask When Buying Land

  • Is there an HOA? What are the restrictions and fees? Ask this question if you’re looking at lots in developed or developing communities.
  • Can you show me the title? While it’s quite rare, there are scammers out there who will try to sell property they don’t own. Always check the chain of title.
  • Are there any back taxes or liens on the property? Make the property hasn’t incurred any outstanding debts.
  • Where are the property lines? You’ll want to get a survey of the property. One might be on file in the county deed records, or you can have one performed so you know exactly what you’re buying.
  • What will the property taxes be? This depend on your location, but your real estate agent can help you determine what the taxes might be.
  • Is the land buildable? You may need to have a soil percolation test done; these tests are sometimes required by the county health department. If the property doesn’t pass this test, you may not be able to build on the land.
  • Can I see the property in person? Pictures only show so much. It’s important to visit the property so you can see how close it is to the main road, what traffic noise is like, and what sits around the property.
  • Is any part of the property under conservation easements? A conservation easement protects natural resources, and you may not be allowed to build where these easements exist.
  • Are there any other easements on the property? An easement gives other people or entities access to your property for limited or specific purposes. Some are necessary, such as the utility company having an easement to access power lines. But you’ll want to know what those easements are and how they might impact your build.

Your real estate agent will be a valuable resource as you search for land but do your own research and ask questions along the way. Since location is so important, don’t rush this part of the process. Take your time and make sure you’re completely satisfied with your property. Depending on whether you’re going with a custom or semi-custom home, the pre-building process varies. If you have a contractor, they will pull the necessary permits. You might also have to get the property cleared if you purchased land for a custom home.

Once you’ve found and prepared your property, you can begin selecting all the elements, features, and finishes that will make your dream home a reality.