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Helping You Build Your American Dream Step-by-Step
Finding the Right Land to Build on...
One of the many reasons people decide to build their own home is that they
can choose where to build it. Many of your future choices and decisions depend
on the type of lot you have and where it's located. You may have to modify your
plans to conform to local zoning requirements and building codes, for example.
Or there might be neighborhood homeowner association restrictions that call
for specific exterior finishes, landscaping and square footage. Or the lay of the
land might hinder the construction of certain types of foundations and thus
increase costs.
There are several ways to find a suitable lot, keeping in mind your priorities. We
recommend you research them all before making a decision. First, determine
the area and price range you're targeting. As a rule of thumb, land costs
generally should not exceed 20 to 25 percent of the total cost of a home. Be
careful not to be lured by a "cheap" lot, though. Often, it's worth paying a little
extra for a desirable location. In the real estate arena, the three most
important selling features of a home are "location, location, and location," or so
the saying goes.
Realtors. Often, it's advisable to find a Realtor to help you locate property. It
doesn’t cost you anything to use a Realtor (the seller pays the commission), so
you have nothing to loose. Realtors will have access to multiple listing services
that track all property listed for sale by nearly every real estate company in a
given area. Realtors also can tell you the average selling price of lots and
homes in the neighborhoods you're considering and often can provide you with
a comparable market analysis detailing recent sales in the area.
Unless you're very familiar with the area and have the time to check selling
prices of both comparable lots and homes in the area (described in detail in our
book), it's wise to use the services of a Realtor. Most importantly, take your
time looking before you make your final decision.
The Internet. Sites such as Realtor.com provide a good resource for locating
property and learning the basic costs for land in various areas. Also try
checking some “for sale by owner” sites, although these are not nearly as
comprehensive.
Newspaper Advertising. Check out the local newspaper's classified listings for
lots or land for sale. Both individual sellers and Realtors often advertise this
way. Most papers now have on-line classified sections as well.
Touring. Another tactic is simply to tour areas or neighborhoods you like. Many
times, owners of a vacant lot post a sign on their property without running an
advertisement. We found our most recent lot this way.
New Developments. Sometimes you can purchase a lot in a new development.
Although you may feel safer buying a lot in an active development, it may be
difficult to do so. Many new subdivisions in our area are developed and built by
a single builder or a group of professional builders. Thus, individual lot sales are
not considered. Even if you convince a builder or developer to sell you a lot,
you might be required to pay a real estate commission on the entire value of
the home.
Many times, however, developers are willing to sell the lots remaining when
their project is nearing completion. While you may find a bargain here, often the
lot hasn't sold for good reason. Does it back to a power line? Is it in a flood
plain? Does it border a busy street'? Be careful, or you might have a difficult
time when you're ready to sell.
One of the many reasons people decide to build their own home is that they
can choose where to build it. Many of your future choices and decisions depend
on the type of lot you have and where it's located. You may have to modify your
plans to conform to local zoning requirements and building codes, for example.
Or there might be neighborhood homeowner association restrictions that call
for specific exterior finishes, landscaping and square footage. Or the lay of the
land might hinder the construction of certain types of foundations and thus
increase costs.
There are several ways to find a suitable lot, keeping in mind your priorities. We
recommend you research them all before making a decision. First, determine
the area and price range you're targeting. As a rule of thumb, land costs
generally should not exceed 20 to 25 percent of the total cost of a home. Be
careful not to be lured by a "cheap" lot, though. Often, it's worth paying a little
extra for a desirable location. In the real estate arena, the three most
important selling features of a home are "location, location, and location," or so
the saying goes.
Realtors. Often, it's advisable to find a Realtor to help you locate property. It
doesn’t cost you anything to use a Realtor (the seller pays the commission), so
you have nothing to loose. Realtors will have access to multiple listing services
that track all property listed for sale by nearly every real estate company in a
given area. Realtors also can tell you the average selling price of lots and
homes in the neighborhoods you're considering and often can provide you with
a comparable market analysis detailing recent sales in the area.
Unless you're very familiar with the area and have the time to check selling
prices of both comparable lots and homes in the area (described in detail in our
book), it's wise to use the services of a Realtor. Most importantly, take your
time looking before you make your final decision.
The Internet. Sites such as Realtor.com provide a good resource for locating
property and learning the basic costs for land in various areas. Also try
checking some “for sale by owner” sites, although these are not nearly as
comprehensive.
Newspaper Advertising. Check out the local newspaper's classified listings for
lots or land for sale. Both individual sellers and Realtors often advertise this
way. Most papers now have on-line classified sections as well.
Touring. Another tactic is simply to tour areas or neighborhoods you like. Many
times, owners of a vacant lot post a sign on their property without running an
advertisement. We found our most recent lot this way.
New Developments. Sometimes you can purchase a lot in a new development.
Although you may feel safer buying a lot in an active development, it may be
difficult to do so. Many new subdivisions in our area are developed and built by
a single builder or a group of professional builders. Thus, individual lot sales are
not considered. Even if you convince a builder or developer to sell you a lot,
you might be required to pay a real estate commission on the entire value of
the home.
Many times, however, developers are willing to sell the lots remaining when
their project is nearing completion. While you may find a bargain here, often the
lot hasn't sold for good reason. Does it back to a power line? Is it in a flood
plain? Does it border a busy street'? Be careful, or you might have a difficult
time when you're ready to sell.
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