Land & Home

When you apply for a home construction loan, the house only exists as plans and specifications.  You may not even have a piece of land in your name. So, as part of the process, you’ll either need to purchase a lot or have a purchase agreement for the lot you plan to buy and build upon.

You may end up buying a lot from the builder you select, or, if the builder owns the lot you desire, the cost of the property may be included in the overall price of the builder’s quote for home construction.

Lot selection is crucial for many reasons, do your due diligence! This property determines where you’ll build your new home, your neighborhood, the surrounding community, and ultimately, where you’ll live.

Lot location: If you enjoy living in the midst of hustle and bustle, it’s a good idea to choose a lot where you’re close to dining, shopping, and recreational venues. If you prefer tranquility, consider a lot in a more natural setting with trees. If you’re looking for a quieter lifestyle, check with your local government to see what future growth plans exist for your area of choice. Are you responsible for adding any utility-related costs? Do you have clear road access or if on a private dirt road, is there a private road agreement amounst the homeowners on the road?

This is also an opportunity to compare what you plan to build with what other homes are appraising and selling for in the area surrounding your lot. Home values significantly depend upon a structure’s location abd square footage.

Lot status: Investigate how ready the lot is for building. Some are build-ready, which means utilities and other services are in place for that lot. Others are still unimproved, which means that you’ll need to wait for basic services to be established before building upon that piece of property. The wait may be short—or it may not. Factor that into your lot selection.

Land survey: Get the land surveyed to have a clear understanding of your exact boundaries and see what easements exist. An easement may exist because of a neighbor’s driveway or because of an underground utility or power line. No matter why an easement is in place, it means that someone else has a specifically-defined limited use of that portion of your property. Is that easement acceptable to you? If not, consider another piece of land.

Zoning ordinances: Learn what zoning ordinances are in place for your chosen lot and whether this property will fall within a homeowners association (HOA). If it does, make sure you’re comfortable with the HOA fees and restrictions, and get a clear understanding of the benefits you’ll receive as an HOA member.

Flood insurance: Find out if you’ll need to purchase flood insurance because of the lot’s location on a flood plain. Also, investigate the flood insurance cost, which will be above and beyond regular homeowners insurance, and include features you’ll need, such as hurricane shutters, in your building plans.