How to buy land for new home

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 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 settings.

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 prohibit metal roofs, which are very popular on log homes. 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. A visit to the county tax office is usually all it takes to find the owner.

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 her locate the perfect tract.
Does the Land Suit Your Home Plans?
Ask a builder to accompany you to your top choices, to offer advice about the best building sites, and to suggest home plans that will work with the topography.

Utilities
Be sure to consider well and septic installation expenses for land without community water and sewer hookups. Check availability of electric, gas, and telephone services.

Easements
An easement is the right to use another person's land for a stated purpose. Does someone else have the right to use the property you want to buy? Find out before you make an offer, or add a contingency to the offer that you must approve of existing easements or the offer is void.

One way to find easements is to take a look at past deeds for the property you are considering and for surrounding parcels, but a real estate attorney or other title researcher can give a more accurate opinion.

Surveys
Does the bank require a survey? Updates to existing surveys can often be used, and are less expensive than a new survey. In our area, surveys are most important for tracts of land that are not part of a development, since plats for developed lots are typically on file at the courthouse.

If there's a question about the number of acres in the tract, your offer can be stated as "X dollars per acre as determined by a new Now, you'll need to word it a bit better, and state who will pay for that survey. This method can work to either the buyer or seller's advantage, depending on how the acreage count turns out.

Locating the Boundaries
Look for iron pins at the corners of property, or at any point where the property line makes a turn. You might find iron pins flush with the center of the road, too.

In wooded areas, watch for cut-throughs, pathways cut by surveyors when they marked a property line. Cut-throughs that go through wooded areas are often visible for many years.

Sometimes trees or bushes that border property lines are marked with brightly colored paint or plastic wrappers.

Road Maintenance
If the property is accessed from a private road, there should be a formal Road Maintenance Agreement. Some banks will not lend without a recorded agreement that shows all owners have promised to help with road upkeep Restrictive Covenants normally cover road maintenance issues.

Environmental Liabilities
If homes or other structures were on the land in the past, ask for a signed statement that discloses facts about buried items, such as oil or gas storage tanks. Their removal and cleanup can be expensive.

Contingencies
Before you make an offer, think about the what ifs--things that would make the property unusable for your purposes. Add these to the offer as contingencies, which means if they do not happen, the offer or contract is void.

All offers for land without sewer hookups should be contingent on your ability to obtain permits for a septic system.

If an architectural review committee must approve your home design, the offer should be contingent on obtaining that approval.

The offer should be contingent on obtaining the type of financing you desire.

There must be a deeded right-of-way to the property.
You get the idea. Your buyer's agent, contractor, or real estate attorney can help you determine if other contingencies should be added.

Searching for land can be a fun adventure. If you look hard enough, you may find a perfect building site just waiting to be cleared from an overgrown jungle of brambles and weeds.