Buying Land to Build a House: The Ultimate Guide

House construction when buying land to build a house

Is it your goal to build a custom home? Before you start buying construction materials and meeting with contractors, it’s essential to buy the right land. This is the most important step because if done incorrectly, constructing a home on unsuitable land could end up costing time and money in the long term. In this guide, you can find out all about purchasing undeveloped property to build a home. We’ve covered every step so you can be certain that your project is off to a great start, from picking the appropriate location and researching zoning laws to comprehending legal requirements.

Is It Worthwhile to Buy Building Land to Build a House?

Deciding to buy raw land to build a house can be very profitable if done right. The secret is to comprehend the regional housing market and create a strategy that caters to local purchasers’ wants.

Do your research before buying any properties and ensure that you are buying in an area with enough demand to make your investment worthwhile.

Is It Better to Buy Raw Land or a Home?

Buying a house can provide a quick return on investment. But, experienced real estate agents and professionals agree that if you have the time and money to invest in buying just land and the building process, doing so could perhaps result in greater long-term rewards.

What Should I Consider Before Buying Land to Build a House?

Before you purchase land to construct your ideal home, you need to take into account a number of variables.

Assess Your Needs

When buying raw land to build a house, it’s important to assess your needs. The first step is to consider the type of property you want. Then, determine how much land is required for the house and any other buildings such as a garage and workshop. It’s also important to decide the ideal location of your dream home—whether that be in the city, suburbs, or countryside.

Additionally, consider if there are any amenities within close proximity that you’d need such as a school or hospital. Finally, factor in both the land costs and the construction costs to set a budget.

Research Potential Plots of Land

If you want to find land, the first step is to research potential plots of land. Look for an area that suits your requirements and preferences, such as one with access to facilities like schools and shops.

You should also look into the local zoning laws for building regulations, as your project may be limited by them.

Confirm the Suitability of the Vacant Land

Before purchasing land, consider its suitability for building your dream home.

This is influenced by a variety of variables, including topography, soil quality, and natural components like trees and rivers.

Also, you should look into zoning laws and construction codes because they can place restrictions on the size of your facility or how close it can be to neighboring properties.


In addition to buying the right plot of land, you should also consider its accessibility. Make sure there are good road access points if you’re developing a home in a rural area far from towns or shops. You’ll also want access to utilities like electricity and water as these will be essential for building your house.

Utility Access

Make sure you have quick access to the utilities when buying land to build a house.

Depending on the area, these could include a septic system, a sewer system, telephone lines, electricity, water, and gas.

Check for Potential Environmental Hazards

Before buying land and building a house, it’s important to check for any environmental hazards. This includes checking the soil quality and air pollution levels in the area as well as any potential contamination from nearby businesses or factories.

Understand Zoning Ordinances and Building Restrictions

With land purchases, it’s important to understand the local zoning restrictions. These will determine how and what you can build on your property. To avoid unpleasant surprises later, make careful to understand any unique rules that might apply to constructing or remodeling homes in your area.

Evaluate the Land Characteristics

The land’s slope, elevation, and contours are important factors to consider when you buy land for home building. Flat and gently sloping land is generally easier to build on and can be less expensive to prepare for construction.

The soil type is another essential factor to consider, as it can affect the foundation and stability of the house. Before beginning construction, it’s crucial to evaluate the soil conditions because different soil types have different load-bearing capacities and drainage properties.

Finally, drainage patterns on the land can significantly impact the construction process and the future habitability of the property. It’s important to assess how water flows across the land and whether any water management or grading may be necessary.

Decide How You’ll Finance the Land Purchase

Once you’ve found the right plot of land and understand its legal implications, you’ll need to secure financing for buying it. 

You could consider obtaining a new construction loan, improved land loan, or raw land loan. Lenders offer construction loans but they typically require a higher down payment, come with higher interest rates than traditional home loans, and have shorter loan terms than traditional home loans. This can significantly impact the final land cost and hurt your construction budget.

That’s why owner financing is a better option than land loans, especially when looking to buy completely undeveloped land. This can be beneficial as it may involve lower interest rates and more flexible repayment terms than traditional loans from banks or other lenders.

Close the Deal

It’s time to finalize the agreement once you’ve chosen the ideal piece of property, obtained finance, and comprehended all the legal ramifications.

Make sure to go over any contracts and agreements carefully before signing. It’s your last chance to double-check everything, so don’t be shy about asking the vendor for clarification or more papers if necessary.

Get the Land Ready Before Your Break Ground

Preparing the site for residential development may involve clearing out trees and brush, leveling the ground, and filling in any low-lying areas.

You might need to hire contractors or heavy equipment operators for some of these tasks, depending on the scope of the task.

Buying Land to Build a House: Final Thoughts

Purchasing cheap land for sale on which to construct a home doesn’t have to be a difficult undertaking with the right planning and research.

The three most important steps in the entire process are comprehending the legal repercussions, obtaining funding, and acquiring all required licenses. After taking care of these crucial issues, you may begin developing your ideal home!

Discount Lots has a wealth of knowledge in land sales and the tools to assist you in locating the ideal piece of property for purchasing and home construction.

Without having to fork over exorbitant real estate agent commissions, we can help you every step of the way and offer the greatest land deals. We also offer flexible owner financing options, allowing you to skip land loans altogether.

Check out our available land listings today and get in touch with an experienced real estate professional to get started!

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