Want To Buy Land And Build A House
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Due diligence, in which a buyer has the opportunity to make sure the land they are purchasing is actually buildable, should be part of the negotiation and built into your offer when you find land you want to buy.
Some buyers purchase land through a builder; in these cases, the property is already subdivided, zoned, and ready to build. This provides the option of more traditional financing, as well as not having to worry about testing soil yourself and avoiding issues such as adding well and septic systems or navigating zoning problems.
If the land you want to buy is in a rural area, you may qualify for a USDA construction loan. USDA loans, which are funded by the United States Department of Agriculture, are intended for low- to moderate-income individuals who are purchasing homes in specific rural regions.
Leyba says that for buyers planning to build soon after buying the land, trying to do two separate loans on the land and the house can be a challenge. In this case, a new construction loan might be the way to go.
Like land costs, building costs vary greatly by region. Builder and developer Chris Beucler, President of Blue Heron BH Nexus Division in Las Vegas, says that in his area, new construction costs can range from as low as $175 per square foot, to more than $750 per square foot. Land costs in his region can also vary by quite a bit.
Soil engineers: Soil engineers do the soil tests on a property, which gives you an idea of things like the type of soil, moisture levels, and how much fill might be needed in order to make the land buildable.
The couple put down a deposit with the builder, who carried the construction loan while the home was being built. Upon completion, the Ragsdales obtained a traditional mortgage loan to purchase the house.
Again, this is where having an experienced agent makes all the difference. An agent who knows all the ins and outs of buying land and building, will be able to answer any questions you have on both your purchase and a potential sale down the road.
According to HomeAdvisor, the cost to clear land and prepare it to build a home is between $1,281 and $4,705. Developing lightly wooded areas could run $500 to $2,000 per acre, and up to $5,600 for heavily wooded areas. Costs depend on the land topography, how easily crews can get to it, and how much debris there is to remove.
Other options include buying a teardown house for the land, or looking for homes on very large lots that could be subdivided and contacting the owners to see if they are interested in selling you a part of their land.
In addition, there may be limitations on building based on the slope of the property, or on tree removal and/or replacement (especially in heavily wooded areas). Consider hiring an experienced property surveyor to investigate the land rights and restrictions with respect to natural resources.
Depending on the size of your property, you may also have to have it surveyed to determine the boundaries of your property lines. The cost to have a survey performed will vary by location and the size of the property, but marking the legal boundaries of your new property now can save you considerable grief in the future. Surveyors may also work with your builders to make sure the land is properly leveled before building can begin.
Buying land and building a home gives you much more flexibility and freedom than purchasing an existing property. But, the process is a LOT more complicated, so it's important to start working with an experienced real estate agent as early as possible.
If you don't qualify for a construction loan or don't have a firm building timeline, you may have to finance your land purchase and construction separately. Lot land loans allow you to finance land that is already prepared for residential development.
When purchasing an existing home, you can be reasonably confident that it was already zoned for a residential building. This isn't necessarily true when buying land to build a house, so it'