In the current housing market with its inventory shortages and escalating sales prices, you may find your dream home now costs more than your budget allows. In fact, you might find it less expensive to build your home. While it may seem overwhelming to find a place to build, secure a reliable (and available) contractor, and make a lot of decisions about the appearance of your new home, for many, building may be better than buying.
First things first, however—you need to find land on which to build. We’ve got some tips on how to do it:
Start the search
Real estate websites, such as Zillow, Trulia,and Realtor.com, offer a variety of listings and provide search filter options that allow you to search exclusively for land in specific neighborhoods or regions. Just be careful to research options thoroughly before you schedule a site visit. Here are some things to consider:
- The property’s total acreage or square footage
- Price per acre, and how does that compare to similar properties?
- What’s the neighborhood like?
- Are there amenities are close by?
- How far is the property from work or school?
- Is the property on a public sewer system? If not, did the previous owner conduct a perk test? If so, what type of residence can the land support?
- Is the home infrastructure, such as electric or plumbing, in place? If not, are electricity, water, cell service, and Wi-Fi easily accessible?
- Is there a proper location for drainage?
- Does the property’s current zoning allow for home construction?
- Are there any building restrictions in the area?
- Does the property offer road or street frontage, or will you require an easement to access it?
Talk to a real estate agent
If your answers to the above questions suggest this piece of land might be right for your new home, it’s time to reach out to a real estate agent (if you haven’t done so already). An agent can not only help you find properties that meet your criteria but can also help you negotiate the best price.
Make sure you work with an agent experienced in the buying and selling of undeveloped land. You want someone who is aware of any potential issues with the properties that interest you, such as ordinances that don’t allow second-story homes or how far away you must build from a property line.
Find a general contractor you trust
Choosing the right general contractor will make life easier during your home building process. Before reaching out to potential candidates, develop a wishlist for your new residence, including architectural style and home features, which will also help inform your budget.
Then interview three to five contractors to gauge your chemistry with them and confirm they have experience building the type of home you want within your budget needs. Find someone you feel comfortable talking to, who understands your needs, and can counsel you on proper decision-making. Ask friends, neighbors, or co-workers for recommendations, and also ask your candidates for references.
Here are additional questions for contractors:
- What is your availability?
- Can you share a realistic timeline for my project?
- With what subcontractors do you work?
- Can I review your standard contract?
- What kind of down payment do you require?
It’s important to check a general contractor’s current licenses as well as any past complaints or litigation history. You can conduct license searches at Virginia’s Department of Professional and Occupational Regulations or through the North Carolina Licensing Board for General Contractors.
Plan your budget
Of course, the price of land and building the actual structure aren’t the only costs to consider. The expense of establishing a home site and its infrastructure vary based on a property’s characteristics. For instance, you will pay more to clear trees from a heavily wooded site than an open parcel.
Other variables that could affect initial costs include:
- Proximity to electric and telephone lines
- Distance between your home and its drain field (if the property is not on public sewer)
- Accessibility to your home site for construction workers
- Driveway installation
- Land topography
- Debris clean-up
Before purchasing land, walk the property with your general contractor to discuss potential home sites, access points, or any concerns the contractor might recognize. If your contractor is familiar with the area, he or she will likely know of any potential hurdles, such as rock or low-water access, which can drive your construction costs up.
Once you’ve found that dream home site and have a budget lined up, it’s time to think about financing that land purchase and home build. OVM Financial can help you choose the right financing option, communicate any budgetary considerations you haven’t identified, and provide a checklist for items you’ll need to apply for a mortgage loan.
We can help you create a personalized mortgage plan
Our team of experts will design a mortgage plan that’s unique to your goals.