Selecting the perfect building lot for your house on can be a difficult job, as you have to research, explore, negotiate for, and ultimately purchase a parcel that you can call home.
First of all, you have to differentiate between a piece of land and a lot, since they are not exactly the same. A building lot or finished lot is a piece of property that is ready for building a house. It may or may not have all the utilities (gas, electric, water, sewer, telephone, and so on) at the site, however, they usually aren’t far away. On the other hand, and is a catchall term that people in the construction industry use for any piece of property without a finished, habitable structure. Land can be commercial, residential, or agricultural. Raw land or undeveloped land is terminology that most people in the construction industry usually use, referring to land that isn’t ready for building.
The obvious choice is to look for a building lot, as it speeds up the process and is a whole lot cheaper in the end. This is mainly because you can find a good loan more easily with a building lot, you’ll likely pay a lower down payment, and you’ll have to spend less to prepare the property for building. Raw land can be more difficult or more expensive to finance because it usually requires additional work (often, significant additional work), such as putting in roads and utilities, before building can begin. It implies getting approvals and permits, building roads, extending utilities to the building lot, drilling wells, if necessary, and more.
The building lot you choose in the end must meet with your desires and also retain its value in the future, if not appreciate. Factors such as location and amenities can make a lot undesirable. Consider many factors when deciding on the right location for your building lot.
You must take into account not only your own lifestyle, but also the factors that will impact your ability to resell the finished house. You need to decide how you want to live in your home and also make sure you talk to a real estate professional to understand the market demand of a particular building lot. Finding the right building lot requires sleuthing and persistence. Your best resources are using the Internet, utilizing experienced real estate agents, and taking your own initiative.
If you have searched online, worked with an agent, driven the neighborhoods, and still haven’t found your dream building lot for sale, you may need to take a more aggressive approach. If you find any piece of land you like, then contact the owner and make an offer.
Value of the Building Lot
Next, you need to carefully evaluate the particular building lot and find out its true value, mostly by examining amenities and utilities. The relationship between utilities and your building lot can have a significant impact on the lot’s value. Be sure to explore the cost of installing utilities and amenities before you buy any building lot.
Nearly every city and county attaches building restrictions to land when the land is first put into development. This is called zoning. Zoning determines many factors you must consider, including:
- The type of building you can put on the land
- The lot’s minimum size
- The number of dwellings or units you can build on the lot.
Considering the planned size of your house when purchasing the building lot is important. You can’t build any house you want on any lot. You’ll probably face restrictions set by the city, county, and sometimes the market. Doing your homework on the limitations of what can be built on a building lot can keep you from making costly mistakes.
Buying vacant land isn’t the only option for locating a custom home. Many people opt to buy a small or dilapidated house and tear it down or add to it significantly. Doing so can be an excellent way to move into a new home but still have all the benefits of an established neighborhood. In this scenario, you must consider a bunch of new factors, such as demolition costs, neighborhood tolerance, and all the financing pros and cons before purchasing the building lot.