Building a home offers many advantages over purchasing an existing one. If you’re looking for flexibility, freedom, and the opportunity to live in a space that has never been occupied, then building your future residence might make sense for you.
Buying land is an important first step in the home building journey, and it can often be one of the most confusing parts of the process. The team at Palmetto Realty is always helping clients navigate the land buying journey, so we pulled together a quick guide to help you through the process:
Step 1: Choose A Qualified Land Agent
If you’re planning to buy land and eventually build on it, then we recommend finding a real estate agent that is knowledgeable about both home and land transactions. Evaluating land is much different than buying a home, so you’ll want to partner with a professional that knows what to look for, how to negotiate, and the closing process.
Step 2: Find Land For Sale
Start by defining your location requirements. If there are specific neighborhoods, school districts, or areas where you’d like to live, make a list of your preferred locations as this will help to narrow down your land search. Do you want to build in an existing neighborhood or purchase acreage in a rural area of Central Florida? Once you’re clear on where you want to live and how big of a lot you need, you can begin to browse land for sale.
Step 3: Finance Your Land Purchase
Unless you’re going to pay cash for your lot, you’ll need to obtain financing to make it to the closing process. While obtaining land financing is a bit more challenging than a mortgage, don’t be discouraged – it’s totally possible.
If you’re not planning to build immediately, then you’ll need to seek a land loan. Land loans typically have higher interest rates, shorter terms, and higher credit eligibility criteria. Start by exploring land loan options at local community banks or credit unions. Your land agent can also refer you to local lenders.
If you’re planning to build your home right away, then you may qualify for a new construction loan, which allows you to finance your land and home with a single loan, which ultimately converts to a mortgage once the home is built. New construction loans may have lower interest rates and often require lower down payments than financing your land and home separately.
Step 4: Check Zoning Restrictions
Before buying land to build a home, you need to make sure the property is zoned for residential construction. Zoning restrictions are rules that govern how a property can be used. Your land agent can research the property and check zoning restrictions, or, if you’d like to be 100% sure, you can go straight to the county planning office and verify yourself.
Step 5: Evaluate Construction Feasibility
Not all land is suitable for development, so you’ll want to have the land professionally surveyed before you buy it. You’ll also need to have a soil analysis and feasibility study done before you close. You don’t want to end-up owning a lot that you can’t build on, so make sure to take the steps to properly evaluate the land ahead of time.
Step 6: Consider Utility Access
If you’re buying land in a rural or undeveloped area, you’ll need to consider the utility situation. Does the property have access to power, sewer, and natural gas lines? If not, you’ll need to explore the cost of adding utilities or consider options like wells and septic tanks. Land without utilities is less expensive, but you’ll need to factor alternative options into your budget.
Step 7: Seek Out Reputable Local Homebuilders
After buying land, it’s time to build. Seek out local homebuilders to help you design and build the perfect dream home. Your land agent can recommend some reputable local firms, too. Consider seeking quotes from multiple homebuilders to make sure you get the best price. Also make sure to discuss your timeline, so you can be sure your preferred homebuilder can meet your expectations.
Buying land and building a home allows you to fully customize your living space, while avoiding major repairs for quite sometime. Don’t be intimidated by the land buying process. With a qualified land agent in your corner, you can find the perfect property, negotiate a good price, and be well on your way to living in your dream home. Contact Palmetto Realty to start the land buying process today.