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Buying Land and Building on Your Lot - Top 5 Things to Look At Before You Begin

By Stanton Homes

Home Builder with Stanton Homes - New Home Builder

April 24, 2008 11:18 PM

Thinking about building a custom home?

Considering buying a lot or piece land to build that custom home on?

Here are the Top 5 Things to look at before you start spending money!

There are a lot of things to consider when choosing a lot for your new home, beginning with asking questions about your needs and budget.

#1 - What Should I Look For in My Lot or Piece of Land?

If you're looking to build a custom home on land of your own, congratulations! You'll have a home that is exactly what you've always wanted - unique, individual, with a floor plan that suits you perfectly, all within your budget of course! Here are some questions that you might need to answer as you start the process.

How much of your total construction budget should the cost of the land be? What's a setback? Is a sloped lot good or bad? What should I watch out for with a "bargain" price? Click here for more information.

Buying land or buying a lot and building a custom home - what should I look for?

#2 - Should I Buy a Stand-Alone Piece of Land, or Build a Custom Home on a Lot in a Neighborhood?

There are advantages and disadvantages to both. What kinds of homes will your new home be next to? How much land do you want? Who will provide road upkeep? A subdivision or development may be more ideal for you than you think! Click here for more information on choosing your neighbors.

#3 - 10 Questions to Ask Before Signing a Contract

So you've found a great lot! Before you sign that contract, here's a list of 10 questions to ask - and what the answers should be. You'll want to know about things like water and sewer access, zoning, natural hazards, and more. Before you buy the blueprints for that new custom home to build on your lot, make sure to review these top 10 questions!

#4 - Getting a Bid for Your New Custom Home - Sewer and Water

Congratulations - you've narrowed down your custom home plan design to one or two choices. Now you're ready to start getting bids from local custom home builders! You'll want to make sure the bids truly compare - just because a bid is lower, doesn't mean that all the same features and essentials are being included.

One of the biggest expenses in a new custom home can be access to sewer, which in many areas means installing a septic tank. And another large expense can be access to water, which may mean digging a well. Here's what to watch for in your custom home bid.

#5 - Getting a Bid for Your New Custom Home - Permits and Fees

No matter where you're building, you'll need to pay for building permits and fees. These fees and requirements can vary greatly by county and city. Make sure these are included in your custom home construction cost estimate, and that they accurately reflect the local city and county requirements. Here's the questions you'll need to ask.

Buying land or buying a lot and building a custom home - what should I look for? - Top 5 Things To Look For

Custom Building a Home on Your Lot in the Raleigh Area

Building a home on your lot in the Raleigh area is an exciting process. You've probably already spent time looking at different home plans, and you may even have the home plan of your dreams picked out.

As a Raleigh custom home builder, we have a unique perspective on the home building process, and are happy to share our expertise.

Get help finding the right lot here.

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Jo-Anne Smith

Oakville, ON

Penny,

WoW, what a thorough and helpful post for anyone who is considering building to read. I'm going to pass it on to some of my clients as you've covered everything they need to know so extremely well.

Apr 24, 2008 11:35 PM

Gary McAdams

GMAC Schwartz Property Sales - Key West, FL

That is quite a helpful list. We had a lot of nuilding going on in The Florida Keys and then one of the biggest builders took the money and ran. He was arrested for taking deposits and not turning them in. I know first hand. He took me for $30,000. He is going to spend many years in jail but that doesn't get me my money back.

Apr 24, 2008 11:46 PM

Heather the Realtor Orlando, Lake Mary

LemonTree Realty - Orlando, FL

First Time Home Buyers, Bank Owned Homes

I have someone right now in Orlando deciding if they should buy this lot. They have meet with the builder and talked with the lender we even wrote a contract but the seller lowered our contingency time frame and wanted all of our anwers back in 30 days, we could close in 60 days but had to give extra escrow and after 30 days it was non refundable. Is it true that it takes 45-60 days to get plans and plans approved by a bank for financing purposes? Is that an unreasonable amount of time to ask to do all your fact finding and to make sure you can build the house you want and get it financed?

Chip Jefferson

Advanced Building LLC - Lexington, SC

Great post Builder to Builder. Some of the links dont work IE relocation PKG. And Heather 45-60 days sounds a little extream to me. Appraisal Packages arent final plans. I get appraisal PKGs in days not weeks to facilitate the loan.

Apr 24, 2008 11:59 PM

Stanton Homes

Stanton Homes - New Home Builder - Raleigh, NC

Design/Build Custom Home Builder in North Carolina

Jo-Anne - Please feel free to share! Glad you found it helpful.

Apr 25, 2008 12:11 AM

Heather -

60-90 days can be normal. It really depends on the builder's relationship with the bank. If a builder has a long standing relationship with the lender, the appraisal can be completed and financing can be in place in as little as 2-3 weeks.

Apr 25, 2008 12:24 AM

Gary -

If you haven't already checked with your local Home Builder's Association, you may want to do so. Most HBA's maintain a buyer protection fund for the unlikely event that something like this happens. They might have the resources to help you recoup some or all of your deposit. I believe it's called the Homeowner Recovery Fund.

There are no guarantees, but doing some research ahead of time can help when choosing a builder. A large builder is not necessarily more or less reputable than a small builder.

Check the Better Business Bureau for complaints (be careful - sometimes several small companies have the same name)
Ask for references - talk with several homebuyers who have recently had a home built by the builder.
Search for complaints against the builder. Again, watch for companies with the same name.
Check to see if the builder is a member of the local HBA.
In a small company, ask to talk to the general contractor personally. In a large company, talk with the highest on-the-ground supervisor you can find.

Unfortunately there are dishonest people in every line of business - but hopefully following these steps will at least eliminate some of the risk.

Apr 25, 2008 12:50 AM

Chip - thanks, the links have been adjusted. Not sure what happened! Lending time periods and practices can certainly vary, depending on the lender and the situation. You're right - an appraisal package doesn't usually take very long when the builder and lender have a working relationship.

In our area, a 60 to 90 day feasibility period is not unusual for a contingent contract with contingency based on feasibility of home plan, septic system, or other building requirements. However, in today's market many sellers are shying away from contingent contracts of any kind, which may be the reason for the shorter time period.

Apr 25, 2008 12:58 AM

Margaret Woda

Long & Foster Real Estate, Inc. - Crofton, MD

Maryland Real Estate & Military Relocation

What a great wrap-up, Penny, with links to blogs on very helpful topics. I'm going to book-mark this and save it for my own reference.

Apr 25, 2008 07:03 AM

Margaret - Glad to be of help. These are all questions your buyers will want to ask!

Apr 25, 2008 12:05 PM

Buying Land and Building on Your Lot - Top 5 Things to Look At Before You Begin

Thinking about building a custom home?

Considering buying a lot or piece land to build that custom home on?

Here are the Top 5 Things to look at before you start spending money!

You may also be interested in:

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