Buying Land and Building Your Dream Home?

Danielle Davenport
Sep 3, 2024
3 min read

Updated: Aug 4

Thinking of Building? What You Must Know About Land Purchase

Finding your dream home can be a challenging journey. You may spend countless hours browsing online listings, attending open houses, and exploring neighborhoods, only to come up empty-handed. If your perfect home simply doesn't seem to exist, perhaps it's time to consider building it from the ground up. Purchasing a vacant piece of land might be the ideal solution.

However, before you start envisioning your dream home's foundation, it's important to recognize that buying land can present more challenges than purchasing an existing home. From easements and zoning restrictions to environmental conditions, unexpected surprises could turn your dream project into a sizable headache.

Whether you're buying vacant land to build your forever home or to make a profitable investment, it's essential to approach the process with care. Here are some key do's and don'ts to guide you:

Do's:

Work with a Real Estate Agent: An experienced agent can help you find the right piece of land and navigate the complexities of the purchase.
Get Your Finances in Order: Make sure your financial situation is solid before moving forward, as land purchases can come with unique costs.
Consider the Neighborhood's Value: Research the value of homes in the area to ensure your investment makes sense in the long term.
Check Utilities and Road Access: Ensure the land has access to essential utilities and is easily accessible by road.
Look into Incentives: Some areas offer incentives for building new homes, which could be beneficial to your budget.

Don'ts:

Don't Rely on a Traditional Loan: Securing a loan for land purchases can be difficult, so explore alternative financing options.
Don't Skip Environmental Tests: Conduct thorough environmental testing to avoid costly issues later.
Don't Overlook the Survey: A detailed land survey is crucial to understanding property boundaries and potential issues.
Don't Neglect to Talk to Neighbors: Nearby residents can provide valuable insights into the land and the community.
Don't Assume You Can Rezone the Property: Zoning laws are often strict, so verify that the land is zoned for your intended use.

By following these guidelines, you can make a well-informed decision and avoid buyer’s remorse. Building your dream home on vacant land may be the perfect way to achieve your vision, but it requires careful planning and consideration.

When purchasing vacant land, thorough due diligence is crucial to avoid costly surprises and ensure your project’s success.

What are the key Due Diligence items?

Property Condition Assessment

✔ Plans and Specifications

✔ Flood Map

✔ Seismic Report

✔ Capital Spending Analysis

✔ ADA Compliance

✔ Code Compliance

✔ Engineering Report

✔ Geotechnical Report

✔ Maintenance Logs

✔ Utilities in Place

✔ Area Calculation

✔ Inventory of Personal Property

✔ Parking Analysis

Environmental Site Assessment

✔ Historic Phase I Reports

✔ Indoor Air Quality

✔ Water Testing

✔ Phase II, if applicable

✔ Mold Assessment

✔ Lead-based Paint Assessment

✔ On Site Hazardous Materials

Legal, Entitlement, Insurance

✔ Zoning Certification

✔ Conveyance Deed

✔ Certificate of Completion

✔ Certificate of Occupancy

✔ AIA Certification

✔ Warranties

✔ List of Legal Actions

✔ List of Insurance Claims

✔ Notices of Condemnation

✔ Survey Review

✔ Title Report

✔ List of Structural Modifications

✔ Service Contracts

✔ Insurance Certificates

✔ SNDA from Major Tenants

✔ Estoppel from Tenants

Is Buying Vacant Land Worth It?

Purchasing vacant land offers the chance to build your dream home or make a smart investment, but it comes with challenges. Unlike buying a house, where you know what to expect, land can have hidden issues like zoning restrictions, utility access, and building code limitations.

To avoid costly surprises, it's crucial to thoroughly research the plot and work with a land expert. A land expert can navigate the complexities, identify potential pitfalls, and ensure that the land meets your needs, making your investment worthwhile. With their guidance, you can confidently move forward with your plans.