How to Buy Land and Build Your Dream Home

Building a home is an exciting venture, and the first step is finding the perfect plot of land. This article will guide you through the process of buying land, ensuring that you make an informed...

Building a home is an exciting venture, and the first step is finding the perfect plot of land. This article will guide you through the process of buying land, ensuring that you make an informed decision and avoid costly mistakes. From where to find land for sale to financing options, here's everything you need to know to turn your dream home into a reality.

Where to Find Land for Sale

Finding land for sale has never been easier. Most real estate websites, like®, have dedicated sections for land listings. Start your search there and filter for land sales. These websites offer a wide range of options and allow you to explore different locations and price ranges.

The best real estate sites allow you to filter for land sales. (Image source:

However, finding a piece of land you love is just the beginning. It's crucial to ensure that the land meets your specific requirements for real estate use. Working with a real estate agent who specializes in land deals can be immensely helpful. They will negotiate a fair price for the land and assist you in checking local zoning ordinances and building restrictions.

Additionally, it's important to determine if the land has access to utilities such as electricity, water, and cellular and Wi-Fi networks. Failing to consider these factors could lead to costly expenses after the purchase.

Questions to Ask When Buying Land

When considering a piece of land, there are several key questions to ask:

  • Does the land have street access?
  • Are there any setbacks or limitations regarding the placement of structures on the land?
  • Are there any view ordinances that may affect your future plans?
  • Are there any restrictions on the type of home you can build?

Neglecting to address these questions before buying land could result in the inability to build on the property.

Understanding the Cost of Land

The cost of land varies depending on location, development, and other factors. According to the U.S. Department of Agriculture's Land Values Summary, the average cost of an acre of land is $3,100. However, this is just the cost of the land itself.

It's essential to consider land development costs, such as clearing the land and preparing it for construction. These costs can range from $1,281 to $4,705, depending on the land's topography and existing conditions. If utilities, wells, or septic systems need to be connected, the cost could increase by $20,000 or more.

To estimate the overall cost of your project, consult with a builder who can provide insights based on the specific characteristics of the land and potential obstacles.

Financing Your Land Purchase

Financing the purchase of land can be more challenging than financing a home. Not all lenders offer loans for land, and the type of loan you'll need depends on your plans for the property.

If you already have plans and a contractor to build your home, it's advisable to apply for construction financing. This type of loan allows you to roll the cost of the land into your mortgage.

Alternatively, you can opt for a land loan if you haven't yet finalized your construction plans. There are three types of land loans: raw land loans, unimproved land loans, and improved land loans. Each has different qualifications and requirements.

It's important to note that land loans are considered riskier by lenders, so they often require higher down payments and offer higher interest rates. Plan ahead and budget accordingly to avoid financial strain.

Seek Expert Advice Before Buying Land

Before making any real estate purchase, it's crucial to consult experts who can guide you through the entire process. Consider seeking advice from a builder, land surveyor, or real estate agent to evaluate the investment potential of the land and estimate costs accurately.

Additionally, hiring an attorney who specializes in local building laws and zoning ordinances is highly recommended. They will ensure that your plans comply with legal requirements and prevent any costly delays or complications.

By following these guidelines and seeking expert advice, you'll be well-prepared to buy land and build the home of your dreams. Remember, a well-informed decision now will lead to a successful and fulfilling building experience in the future.