That beautiful, untouched parcel of land for sale at a surprisingly low price might seem like a steal, but it’s often a red flag. In real estate, you truly get what you pay for, and a bargain price on land can signal hidden problems like difficult access, restrictive zoning, or the inability to install a well or septic system. To make a smart investment, you have to look beyond the price tag and understand the property’s true potential and limitations. This is where knowing what to look for when buying land becomes your most valuable asset. We’ll walk you through the essential checks that ensure you’re not just buying a piece of dirt, but a viable foundation for your future.
Key Takeaways
- Look beyond the view: A property’s true potential lies in its legal and physical details. Before you commit, confirm that local zoning allows for your plans, verify legal access, and ensure the land can support essential infrastructure like a well and septic system.
- The price tag is just the starting line: Your total investment will be much higher than the purchase price. Create a realistic budget that accounts for the significant costs of site preparation, utility connections, surveys, permits, and ongoing property taxes.
- Assemble your team of professionals: Land transactions have unique complexities that require specialized knowledge. Working with a team—including a real estate agent who understands land, a real estate attorney, and a surveyor—is the most effective way to protect your investment and avoid costly mistakes.
Why Your Land’s Location is Everything
You’ve heard it a million times in real estate: “location, location, location.” When buying land, this mantra is more critical than ever. The perfect plot of land in the wrong spot can quickly turn your dream project into a frustrating challenge. The location dictates not just your future address but also the land’s potential value, the lifestyle you can have there, and even what you’re legally allowed to build. It influences everything from your daily commute and access to amenities to your long-term financial return. A secluded, wooded lot might seem ideal, but if it’s an hour from the nearest grocery store or has poor internet service, it might not fit your life.
Before you fall in love with a beautiful piece of property, it’s essential to look beyond its boundaries. You need to investigate the surrounding area with the same care you’d use to inspect the land itself. Think of yourself as a detective piecing together the full story of the property. What is the access like? What are the neighbors doing? What are the county’s plans for the area? Answering these questions will help you make a confident and informed decision, ensuring your investment is sound and your future home is exactly where you want it to be.
Check for Access and Road Frontage
It might seem obvious, but you’d be surprised how many people overlook it: can you actually get to your property? You need to confirm there is legal, year-round access to the land. A dirt path that’s been used for years doesn’t count unless there’s a documented easement giving you the right to use it. Find out if the property has frontage on a publicly maintained road. If not, you’ll need to understand the terms of any private road agreements. Also, consider the practical side. If there’s no driveway, you’ll have to budget for the cost of building one, which can be a significant expense depending on the terrain and length.
Research Future Development Plans
The peaceful woods bordering your property today could be a bustling subdivision or a new shopping center tomorrow. That’s why you need to investigate the area’s future. Head to the local planning and zoning office to review the community’s master plan and check for any proposed developments nearby. Understanding local zoning regulations is also key. These rules determine what can be built on your land and the surrounding parcels. Knowing what’s on the horizon helps you protect your investment and ensure the neighborhood will still fit your vision in five, ten, or even twenty years.
Analyze the Neighborhood
A property’s location is also about the community. Before you commit, spend time in the area. Drive through at different times of the day and on different days of the week to get a feel for the traffic, noise levels, and general atmosphere. Take a look at the condition of neighboring properties—are they well-maintained? This can tell you a lot about the pride of ownership in the community. If you can, strike up a conversation with a few potential neighbors. They can offer invaluable firsthand insight into what it’s really like to live there, from local happenings to any issues with the area.
Look at Property Value Trends
Buying land is a major financial investment, and you want to be sure it’s a wise one. The location is one of the biggest factors that will influence its future value. A plot in an area with a growing population and a strong job market is more likely to appreciate over time. On the other hand, land that is difficult to access or has limited use may not see much growth in value. We can help you analyze the market trends for the area, looking at historical data to see how property values have performed over the last several years.
Conduct Local Market Research
To make a smart offer, you need to know what similar properties are worth. This involves researching comparable sales, or “comps,” in the area. Look at the recent sale prices of land with similar acreage, features, and zoning. You can start by browsing current listings on our property search page to get a baseline. This research helps you understand the current market value and ensures you don’t overpay. For a truly accurate valuation, getting a professional appraisal is a crucial step before you close the deal. It provides an unbiased opinion of the land’s worth, giving you peace of mind in your purchase.
Evaluate These Key Property Features
Once you’ve zeroed in on a location, it’s time to put the land itself under a microscope. The physical characteristics of a property will dictate what you can build, how you can use it, and what challenges you might face down the road. Think of this as getting to know the land’s personality—its quirks, its strengths, and its potential deal-breakers. A beautiful view is wonderful, but it won’t mean much if the ground beneath it is unstable or prone to flooding. Taking the time to carefully examine these features is a non-negotiable step that protects your investment and ensures the land can truly become the foundation for your dreams. Let’s walk through exactly what you need to look for.
Inspect the Topography and Drainage
First, get a feel for the lay of the land—literally. Topography refers to the property’s shape, including its slopes, hills, and flat areas. This directly impacts where you can build, what kind of foundation you’ll need, and how much site preparation will cost. Pay close attention to drainage. Does the land slope gently away from your potential build site, or are there low spots where water might pool? Poor drainage can lead to a soggy yard, a flooded basement, or even serious foundation damage. The best way to assess drainage is to visit the property after a heavy rain, but even on a dry day, you can spot clues like water-stained soil or stressed vegetation in low-lying areas.
Test the Soil Quality
The ground beneath your feet is just as important as the land itself. Soil quality affects everything from your foundation’s stability to your ability to grow a garden. Different soil types have vastly different properties. For example, expansive clay soil can swell and shrink dramatically, putting stress on structures, while sandy soil might not be stable enough for certain projects. If you plan to install a septic system, you’ll need a percolation (or “perc”) test to see how quickly water drains through the soil. For building, a geotechnical report from an engineer will give you a detailed analysis. You can also use the USDA’s Web Soil Survey for a preliminary look at the soil composition in your area.
Assess Natural Resources
When you buy land, you need to know exactly what you’re buying. This includes not just the surface but also what lies beneath it and grows on top of it. In many areas, rights to resources like timber, minerals, oil, and gas can be sold separately from the land itself. This is known as “severed rights.” It means a previous owner might have sold the mineral rights to an energy company, giving them the legal right to access your property to drill or mine. Before you buy, it’s essential to have a real estate attorney review the title and deed to confirm who owns the mineral rights and any other resources. Don’t leave this to chance.
Confirm Boundaries with a Survey
That old fence line or row of trees might seem like an obvious property line, but you can’t rely on assumptions. The only way to know the exact legal boundaries of your land is to get a professional survey. A licensed land surveyor will locate and mark the property corners, creating a legal document that shows the precise dimensions and acreage. This is a critical step that prevents future disputes with neighbors over where their property ends and yours begins. It also ensures you don’t accidentally build your dream home, garage, or fence on someone else’s land. A survey provides the certainty you need to move forward with your plans confidently.
Identify Easements and Rights-of-Way
An easement is a legal right that allows someone else to use a portion of your property for a specific purpose, even though you own it. It’s a common and often necessary part of land ownership, but you need to know what you’re agreeing to. For example, a utility company might have an easement to run power lines across your land, or a landlocked neighbor might have a right-of-way to use your driveway. These property easements can restrict where you can build, plant trees, or install a fence. Your title report should list all recorded easements, so review it carefully with your agent and attorney to understand how they might impact your use of the property.
Look for Environmental Hazards
Protecting your health and your investment means doing your due diligence on potential environmental issues. You’ll want to check if the property is near any landfills, industrial sites, or other areas known for contamination. Look for physical signs on the property itself, like stained soil, strange odors, or old barrels that could indicate illegal dumping. For larger parcels or land with a questionable history, a Phase I Environmental Site Assessment can identify potential liabilities. You can also use the EPA’s MyEnvironment tool to get a snapshot of environmental conditions and facilities in the area. Uncovering these issues before you buy can save you from costly cleanup and legal trouble.
Check for Protected Species and Habitats
That beautiful stream or patch of old-growth forest on your potential property could be a protected habitat. Federal and state laws, like the Endangered Species Act, protect certain plants, animals, and sensitive ecosystems like wetlands. If your land is home to a protected species, it could significantly restrict what you can do with it. Development might be limited to certain areas, prohibited during nesting seasons, or require special permits and mitigation efforts. Before you buy, it’s wise to contact your state’s fish and wildlife agency or an environmental consultant to see if any endangered species or critical habitats exist on or near the property.
Assess the Flood Zone Risk
Water can be a property’s best friend or its worst enemy. It’s crucial to know if the land you want to buy is located in a flood-prone area. You can check any property’s status using the FEMA Flood Map Service Center. If the land is in a designated flood zone, often called a “100-year floodplain,” it means there is a 1% or greater chance of a major flood in any given year. This will likely require you to purchase separate flood insurance, which can be expensive. It will also dictate where on the property you can build and may require you to elevate your home’s foundation, adding to construction costs. Understanding this risk upfront is essential for your budget and your peace of mind.
Understand Zoning and Legal Rules
Before you fall in love with a piece of land, you need to play detective and uncover its legal framework. Think of zoning laws and legal rules as the property’s DNA—they dictate what you can and can’t do with it, from building your dream home to starting a small farm. This isn’t the most glamorous part of the land-buying process, but I promise you, it’s one of the most important. Failing to confirm that local regulations allow for your plans is one of the biggest and most costly mistakes a buyer can make.
These rules aren’t universal; they can change dramatically from one county to the next, and sometimes even between neighboring towns. What’s permitted on one side of the road might be forbidden on the other. That’s why you have to do your homework on the specific parcel you’re considering. This due diligence protects your investment and ensures the vision you have for your land can actually become a reality. Getting this right from the start saves you from future headaches, legal battles, and the heartbreak of discovering your plans are impossible.
Know the Current Zoning Classification
First things first, you need to find out the land’s current zoning classification. This is the official designation from the local government that determines how the property can be used. Common categories include residential, commercial, agricultural, industrial, or recreational. Your local planning or zoning department is the best place to get this information. Simply provide them with the property’s address or parcel number, and they can tell you its official status. This classification is your starting point—if you want to build a house, you need to ensure the land is zoned for residential use. If your plans don’t match the current zoning, you’ll have to go through the complex process of seeking a variance or a rezoning, which is never a guarantee.
Review Building Codes and Restrictions
Once you’ve confirmed the zoning is a match, the next step is to look at the specific building codes and restrictions. While zoning tells you what you can do (e.g., build a home), building codes tell you how you must do it. These rules govern the actual construction of structures to ensure they are safe and sound. They can include everything from setback requirements (how far a building must be from property lines), height limits, and even the types of materials you can use. If you have a specific architectural style or a unique build in mind, reviewing these codes early on is critical to make sure your design is compliant.
Identify Required Permits
Nearly any project you undertake on your new land will require a permit. From building a home to installing a septic system or even digging a well, you’ll need official permission from the local authorities. It’s essential to create a list of all the permits your project will require and research the process for obtaining them. The application process can be lengthy and often involves fees, inspections, and detailed plans. Understanding these requirements upfront helps you create a realistic timeline and budget for your project. Don’t skip this step—building without the proper permits can lead to hefty fines and orders to tear down your work.
Find Deed Restrictions and Covenants
Beyond government regulations, some properties come with private rules known as deed restrictions or CC&Rs (covenants, conditions, and restrictions). These are limitations put in place by a previous owner, a developer, or a homeowners’ association that are legally tied to the property’s deed. They can control a surprising number of things, like the minimum square footage of a home, what color you can paint your house, whether you can have livestock, or where you can park a boat. Always get a copy of the deed and any associated CC&Rs during your due diligence period to ensure there are no hidden rules that will interfere with your plans.
Anticipate Future Zoning Changes
Zoning isn’t always set in stone. The quiet, rural area you love today could be slated for future commercial development. To get a sense of what the future might hold, check out the local municipality’s comprehensive or master plan. This public document outlines the community’s long-term vision for growth and land use. It can give you valuable clues about planned roads, new subdivisions, or commercial centers that might pop up nearby. While it’s not a crystal ball, reviewing this plan helps you make a more informed decision about the property’s long-term suitability and potential resale value.
Clarify Mineral and Water Rights
When you buy land, you might assume you own everything from the sky above to the center of the earth below—but that’s not always the case. In many areas, mineral rights (for things like oil, gas, or coal) and water rights can be owned separately from the surface land. This means another person or company could have the legal right to access your property to extract resources or use a water source. It’s crucial to have a title search performed to clarify exactly which rights are included in the sale. This is a complex legal area, so working with an experienced real estate attorney is the best way to protect your interests.
Avoid Common Zoning Pitfalls
The most common pitfall in buying land is making assumptions. Never assume you can use a property for your intended purpose without verifying it with the proper authorities. The best approach is to be thorough and proactive. Talk directly with the local zoning and planning office, ask specific questions about your plans, and get their answers in writing if possible. This is where having an expert on your side makes all the difference. A knowledgeable real estate agent can guide you through this process, helping you ask the right questions and find the right answers. If you have questions about a property’s zoning, our team is here to help you get the clarity you need.
Consider Infrastructure and Utilities
Finding the perfect piece of land is exciting, but that dream can quickly turn into a logistical headache if you overlook the basics. Before you can build, you need to know how you’ll get power, water, and internet to your property. These aren’t minor details; they are fundamental services that make a piece of land a viable place to live. For raw, undeveloped land, you’re often starting from scratch, and the costs and complexities of bringing in utilities can be surprising.
It’s your job to investigate what’s already there and what isn’t. Are there power lines at the road? Is city water an option, or will you need to drill a well? What about sewage? These questions are just as important as the size of the lot or the view. Getting clear answers upfront will save you from unexpected expenses and delays down the road. Think of it as creating a complete picture of your investment. We can help you ask the right questions and connect you with local experts to get the information you need to make a confident decision.
Verify Water Sources and Rights
One of the first things to figure out is your water situation. Will you connect to a municipal water supply, or will you need to drill a well? If a well is your only option, you’ll need to investigate the typical depth and cost for wells in the area. Beyond the source, you need to understand your water rights. In many areas, owning land doesn’t automatically mean you own the rights to the water beneath it. These rights can be complex and are often sold separately. It’s also wise to check if you own the timber and mineral rights on your property, as these could belong to someone else.
Confirm Electricity and Gas Access
Flipping a light switch is something we take for granted, but on a new plot of land, it’s a major milestone. Find out where the nearest power and natural gas lines are located. If they’re already at the property line, you’re in great shape. If they’re a quarter-mile down the road, you’ll be responsible for the cost of extending those services to your homesite. This can run into tens of thousands of dollars, depending on the distance and terrain. Get a formal quote from the local utility companies so you can factor this significant expense into your budget from the very beginning.
Explore Sewage Solutions
Unless your property can connect to a public sewer system, you’ll need to install a septic system. This isn’t as simple as just digging a hole. Your land must pass a percolation test, or “perc test,” to determine if the soil can properly absorb and filter wastewater. A licensed engineer performs this test, and the results dictate the type and size of the septic system you can install. The entire process—from testing to design and county approval—can be costly and time-consuming. A failed perc test could even prevent you from building on the land altogether, so it’s a critical contingency to address early on.
Check Internet Connectivity
In a world where many of us work from home, reliable internet is no longer a luxury—it’s a utility. Don’t just assume you’ll have access to high-speed internet. In rural or newly developed areas, service can be spotty or nonexistent. Check the websites of local internet service providers to see if they service the property’s address. It’s also a great idea to talk to potential neighbors about the quality and reliability of their service. A weak or unavailable connection could be a dealbreaker, so confirm your options before you commit to the purchase.
Research Future Infrastructure Plans
What’s happening around your potential property is just as important as what’s happening on it. Contact the local planning and zoning department to inquire about any future infrastructure projects. Is a new highway planned nearby? Are there plans to extend water and sewer lines into the area? New developments can be a double-edged sword. They might bring welcome amenities and increase your property value, but they could also mean more traffic, noise, and construction. Understanding the long-term vision for the community helps you make a more informed investment.
Estimate Utility Connection Costs
For undeveloped land, the purchase price is just the beginning. You’ll need to create a detailed budget for all the costs associated with bringing in utilities. This includes fees for connecting to public services or the cost of installing private systems like a well and septic tank. Call the local electric, gas, water, and cable companies to get concrete estimates for running lines to your property. These are often called “hook-up fees.” Adding up these figures will give you a realistic idea of the total investment required to make your land build-ready. If you need help finding the right contacts, our team at William Harris Group can point you in the right direction.
Secure Utility Access Rights
Having utilities nearby is one thing; having the legal right to bring them to your property is another. If the main utility lines don’t directly border your land, you may need to secure an easement to run lines across a neighbor’s property. An easement is a legal right to use someone else’s land for a specific purpose. Negotiating an easement can be a delicate and sometimes expensive process that involves legal agreements. Make sure you have a clear, legal path for all necessary utilities before you finalize the purchase to avoid any access issues later on.
Uncover Hidden Costs and Plan Your Finances
The price tag on a piece of land is just the beginning of the story. To avoid surprises that could derail your project, you need to look at the total cost of ownership. This means digging into everything from development expenses and property taxes to insurance and ongoing maintenance. A clear financial plan is your best tool for turning a piece of raw land into your dream property without breaking the bank. Let’s walk through the hidden costs you need to account for so you can create a realistic budget from day one.
Analyze the Purchase Price
It’s easy to get excited about a piece of land with a surprisingly low price, but it’s wise to approach it with a healthy dose of skepticism. If a property seems too cheap compared to others in the area, it could be a red flag for hidden problems. The land might have difficult access, restrictive zoning, or environmental issues that will be expensive to fix. A low price could also mean it won’t pass a percolation test for a septic system, making it unbuildable. Working with an experienced real estate agent helps you understand the true market value and investigate why a price is so low.
Estimate Development Expenses
Buying the land is just the first step; preparing it for your vision is where many of the real costs lie. You’ll need to budget for site preparation, which can include clearing trees, grading the terrain, and building a driveway. If the property doesn’t have access to public utilities, you’ll face significant expenses. Think about the cost of drilling a well for water, installing a septic system for waste, and running power lines to your build site. It’s a good idea to get quotes from local contractors for this work before you finalize the purchase to ensure your budget is realistic.
Calculate Property Taxes
Property taxes are an ongoing expense you can’t ignore. These taxes vary significantly depending on the county and how the land is classified. Before you buy, find out the current property tax rate and how the land is assessed. In some areas, you might be able to get an “agricultural appraisal” or other exemption that can save you a lot of money on taxes, but these often come with specific requirements for how you use the land. Make sure you understand the long-term tax implications and factor them into your annual budget.
Determine Insurance Requirements
Getting the right insurance for vacant land is crucial, and it’s not always straightforward. Insurers will look at factors like flood and wildfire risk, which can make coverage expensive or even impossible to get. For example, most insurance companies are hesitant to cover structures built in a 100-year floodplain. You’ll also need liability coverage in case someone gets injured on your property. It’s smart to speak with an insurance agent before you buy to understand your options, potential costs, and any coverage limitations that might affect your plans for the property.
Factor in Maintenance Costs
Land requires upkeep, and those costs can add up. Depending on the property, you might be responsible for maintaining a private road or driveway, which could involve grading or snow removal. You may also need to manage vegetation by mowing fields to prevent fire hazards or clearing brush to comply with local ordinances. If the property has fences, they will eventually need repairs. These aren’t one-time expenses, so be sure to include a line item for annual maintenance in your long-term financial plan.
Explore Your Financing Options
Securing a loan for raw land is often more challenging than getting a traditional mortgage for a home. Lenders typically view land loans as higher risk, which means they often require a larger down payment—sometimes as much as 20% to 50%—and charge higher interest rates. Some banks may also have restrictions on the size of the property they’re willing to finance, so a large parcel over 20 acres might be harder to fund. We can help you connect with lenders who specialize in land loans and explore all your financing options, including the possibility of seller financing.
Budget for Survey and Inspection Fees
Due diligence comes with its own set of costs, but they are worth every penny. You should always get a new land survey to officially mark your property lines and identify any easements or encroachments. Title insurance is another essential expense that protects you from claims against your ownership of the property. Depending on your plans, you may also need to pay for a percolation test to see if the soil is suitable for a septic system or a geotechnical report to assess soil stability for building a foundation.
Account for Environmental Assessment Costs
Before you close the deal, it’s important to ensure the land is free of environmental contaminants. An environmental site assessment can identify potential issues from the property’s past uses, such as leaking underground storage tanks or illegal dumping. This is especially critical if the land is near industrial areas or was previously used for commercial purposes. Uncovering these problems after the purchase can leave you responsible for costly cleanup efforts. Investing in an environmental survey upfront protects your investment and gives you peace of mind.
Assemble Your Team of Experts
Buying land isn’t a solo mission. It’s a complex process with a lot of moving parts, from legal documents to soil tests. Putting together a team of qualified professionals is one of the smartest moves you can make. These experts will help you perform due diligence, avoid costly mistakes, and ensure the land you buy is exactly what you need. Think of them as your personal board of advisors, each bringing a specific skill set to the table to protect your investment and bring your vision to life. With the right people in your corner, you can move forward with confidence.
Choose the Right Real Estate Agent
This isn’t the time for a generalist. You need a real estate agent who truly understands the ins and outs of land transactions. They can help you find properties that match your goals, understand local market conditions, and make sense of complex issues like zoning laws and access rights. An experienced agent acts as your guide and advocate, connecting you with other professionals and ensuring you have all the information you need to make a smart decision. When you’re ready to start your search, working with a buyer’s agent who specializes in land can make all the difference.
Get a Legal Consultation
Before you sign anything, it’s wise to have a real estate attorney review the paperwork. Land purchases come with a unique set of legal considerations, including easements, deed restrictions, and mineral rights. An attorney can help you understand the fine print and identify any potential red flags that could limit how you use the property. They’ll ensure the contract protects your interests and that the title is clear. This legal oversight is a critical step for avoiding common land use pitfalls and securing your investment for the long term.
Schedule Property Inspections
You wouldn’t buy a house without an inspection, and the same rule applies to land. A thorough property inspection goes beyond what you can see on the surface. Professionals can assess crucial factors like soil quality for building or farming, proper drainage to prevent flooding, and the presence of any environmental hazards. This step is essential for confirming the land is suitable for your intended use, whether you plan to build a home, start a farm, or simply hold it as an investment. A detailed land inspection checklist can help you cover all your bases and identify potential issues early on.
Conduct a Thorough Title Search
A title search is a non-negotiable step in the land buying process. It’s an investigation into the property’s history to confirm that the seller has the legal right to transfer ownership to you. This search uncovers any liens, unpaid taxes, or other claims (also known as encumbrances) against the property that could become your problem after the sale. Ensuring the property has a “clean” title is fundamental to a secure purchase. It protects you from future legal headaches and confirms that you are the rightful, sole owner once the deal is done.
Perform Environmental Assessments
Depending on the property’s history and location, an environmental assessment might be necessary. This evaluation identifies potential contamination from previous land uses, like farming or industrial activity, and checks for protected habitats or endangered species that could restrict development. An environmental site assessment can save you from purchasing a property with costly cleanup requirements or one where your building plans are prohibited. It’s a key part of your due diligence, ensuring the land is safe and usable for your specific goals.
Hire a Land Surveyor
Property lines on a map can be deceiving. Hiring a professional land surveyor is the only way to know the exact boundaries of your property. A surveyor will physically mark the corners and lines of the land, providing you with an official map or plat. This is crucial for avoiding disputes with neighbors and ensuring any structures you build comply with setback regulations. A survey also identifies any easements or encroachments that aren’t obvious from a simple walkthrough. It’s an investment that provides clarity and prevents future conflicts.
Use Local Government Resources
Your local government is a treasure trove of information. The county or city offices hold public records on zoning laws, property taxes, land use regulations, and planned public works projects like new roads or utility lines. Tapping into these resources can give you a clear picture of what’s permitted on your potential property and what future changes in the area might affect its value. Many municipalities have this information available online, or you can visit the relevant departments in person. This research helps you understand the community’s long-term vision and how your land fits into it.
Consult with the Planning Office
Before you get too far, a conversation with the local planning or zoning office is a must. These are the people who can give you definitive answers about what you can and cannot do with a piece of land. They can explain the specifics of the property’s zoning classification, review any restrictions, and inform you about the process for obtaining building permits. This consultation helps you verify that your plans align with local regulations, preventing you from buying a property that you can’t use as intended. It’s a proactive step that can save you significant time and money.
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Frequently Asked Questions
What’s the difference between zoning rules and deed restrictions? Think of it this way: zoning laws are the city or county’s rules for the entire neighborhood, while deed restrictions are specific rules for just your property. Zoning tells you if you can build a house, a business, or a farm in a general area. Deed restrictions, which are set by a past owner or developer, get much more specific and can control things like the minimum size of your home, what kind of fence you can have, or even if you can park an RV in your driveway. You need to check both to get the full picture of what you can and can’t do.
Why is financing for raw land often more difficult than for a house? Lenders see raw land as a riskier investment than a home. A house is a finished product that can be easily sold if a borrower defaults, but a piece of land is full of variables. Because of this higher risk, banks typically ask for a much larger down payment, sometimes up to 50%, and they often charge a higher interest rate. The approval process is usually more involved, so it’s a good idea to connect with lenders who have specific experience with land loans.
Besides the purchase price, what are the most significant costs I should plan for? The biggest expenses after the purchase price are usually related to getting the land ready to build on. This includes the cost of bringing in utilities like electricity, water, and internet, which can be thousands of dollars if the connections are far from your property. You’ll also need to budget for installing a septic system if there’s no public sewer, building a driveway for access, and clearing and grading the land for your homesite. These development costs can easily add up, so getting quotes from local contractors early is essential.
Do I really need a new survey if there’s an old one on file? Yes, getting a new survey is one of the most important investments you can make. An old survey might not reflect recent changes, like a neighbor’s fence that accidentally crosses the property line. A new, official survey confirms your exact boundaries, identifies any legal easements you need to be aware of, and protects you from future disputes. It provides the legal certainty you need before you start planning where to build your home or install a fence.
My ideal property is in a flood zone. Does that mean I shouldn’t buy it? Not necessarily, but it does mean you have more homework to do. Being in a flood zone will require you to purchase separate flood insurance, which can be a significant annual expense. It will also affect your building plans, as you’ll likely need to construct your home on an elevated foundation to meet safety regulations. You need to weigh these extra costs and building requirements against the benefits of the property to decide if it’s the right financial and practical choice for you.
