How to Buy Property and Build a Home:  Step by Step Guide

Last Updated on November 20, 2022 by Cooper Hayes

Are you tired of living the tenant status and want to live in your own home? You’re aware there are pre owned homes for sale on real estate sites, but you want to enjoy the exciting experience of building your dream home, starting from the foundation till the house takes its frame. 

Buying a plot of land and building your dream home on it is more achievable than you may expect, with ample options for where to find land, buy it, and construct a house. This step-by-step guide to how to find land to build a house outlines the typical steps of buying landed property, constructing a house, and what happens in each key stage. By the end of this piece, you’d have extensive information to help you better understand what your new home’s construction entails.

Note that the process of land buying and building your own house differs from one region to another and from one home builder to another. Ensure to speak with your building firm or real estate agent overseeing the building about their specific procedures and operational guidelines. 

How to Find Land to Build a House

Besides wondering how to find land to build a house, it’s best to get acquainted with the process and stages involved. The first stage in the land purchase process to build your dream home involves finding and purchasing the right lot. 

Some organizations specialize in listing vacant land, including the US Department of Agriculture’s resale website. Additionally, it’s a great idea to work alongside a local real estate agent that will alert you once the right plot of land is available in the multiple listing service (MLS). 

How to Get Finance to Buy a Land

The financing process in purchasing land is different from buying a conventional home, especially when the ground is bare,  without any utilities. There are various financing options to exploit in purchasing land, including getting a raw land loan, new construction loan, lot land loan, or seller financing. 

• New Construction Loan

A new construction loan lets you secure financing both for the purchase of the land and the building construction. One of the significant benefits of new construction loans is that you’ll mostly pay a smaller down payment than if you wanted loans for the lot and construction separately. 

Lenders offer construction loans expecting a ten to 20 percent down payment, but some traditional mortgage providers like commercial banks might request lower down payments, but with a higher interest rate. 

The loans typically convert into permanent mortgages when the building construction is complete. However, you want to retain an excellent credit rating, a low debt-to-income ratio, and have clear architectural plans to qualify for most mortgage loans.

• Lot Land Loan

Lot land loans aid the building process by allowing potential landowners to finance loans already undergoing development for residential occupancy. Generally, a building lot can access financing if it has the right zoning, proximal utilities, and ready access to a public road. The down payment for most lot land loans also falls between ten to 20 percent.

• Raw Land Loan

If your desired dream home doesn’t qualify to get any of the two financing options above, you could consider getting raw land loans. However, completely undeveloped land loans are pretty tricky to access, and they often require down payments of as much as 50 percent. Also, these loans usually require higher interest rates compared to other financing options.

• Seller Financing

After finding your perfect plot, it might not be easy to secure financing from any of the above traditional options. To address this, brokers selling land often make a financing offer to the buyer. If you couldn’t access financing from the above means, speak with the seller for possible funding offers.

At San Antonio Texas real estate company, we guide potential homeowners towards securing financing to realize their dreams of constructing and building a home. Tell us about your expectations on your dream home and we’ll take it up from there.

Taking Note of Zoning Restrictions Before Buying Land

Before signing contracts in land purchases, you want to confirm that the land is already zoned to hold residential land or doesn’t have building restrictions which can affect your overall plans. 

Buying land that has zoning restrictions could hamper your home building plans. Therefore, it’d help to do your due diligence in adequately researching the zoning requirements of the property, say, from the county planning office. 

You may also reach out to an experienced real estate professional with vacant land sales to guide you in ascertaining the possible usage of the land.

Get a Professional Land Survey

One of the most critical steps in finding land is hiring a real estate surveyor. The surveyor will provide you with information about the available land, such as accessibility, dimensions, land class, and whether anyone else has claimed rights to the property. 

In addition, it’s vital to assess whether the soil permits the safe building of a home or drilling a borehole. Verify if it’s a buildable land by checking proneness to environmental problems such as flooding. Also, getting online maps such as local wetland inventories can help identify potential problem areas.

Estimate the Cost of Utilities

The county usually manages utilities like water, gas, and electricity at a cost. However, if your intended land purchase location is in a more rural area, you may have to outsource utilities for your new home. 

Calculate the additional expenses of accessing utilities such as electricity, the septic tank, or installing a borehole. If you don’t know where to get the right quotes for the amount of work you plan to do, consider speaking with top real estate agents around you. 

Real estate firms often have a network of building professionals and contractors who can tell how much land costs and give a quote for building a custom home.

Request for Quotes From Home Builders

Consult with different contractors for detailed quotes to ensure you’re clear about the construction costs and anticipated timeline. When designing your custom built homes, you want local builders that have met similar expectations and need to yours in the past. It’s easy to know how suitable they’re when you check out any existing property they built.

In addition, you may want to plan ahead of a home resale by requesting a real estate agent to assist you in deciding what features will improve or guard the value of reselling the home in your area and provide useful information on what to expect when it’s time to sell.

Building Your Dream Home

Immediately you discover a buildable land you’d want to buy; it’s time to start planning towards the construction phase of your new house. Hiring a knowledgeable agent to guide you every step of the way would go a long way in keeping potential problems with building over your plot of land and possible setbacks at the barest minimum.

How to Find the Right Builder for Your Home

Getting the right professional to help with your new construction home is crucial. But you want to hire someone with a strong portfolio of successful building projects and commendable relationships with clients. You also want someone knowledgeable about the local neighborhood. 

That’s because most established residential neighborhoods have specific homeowners association rules or residential development regulations which may affect the process of buying land or building on it.

One of the best ways to know who to hire is by reviewing any existing house or resale custom homes that the builder constructed. You want to research the years of experience of prospects to avoid changing builders in the middle of the construction.

The Building Timeline

Building timelines often vary among builders. However, most buildings take 10 to 18 months to complete. Some of the factors that could make the custom homes’ building time-consuming include securing permits, unexpected labor shortages, or having to wait for materials to arrive. 

Here’s an overview of the timeline of the average building process:

1. Securing permits
2. Clearing the land, which could take time if there’s dense vegetation to clear
3. Pouring the foundation
4. Framing the home
5. Executing inspections during the construction and when your new construction home is complete
6. Installation of electrical, plumbing, HVAC systems, and any other systems
7. Hanging drywall
8. A final review when the house is complete for any potential issues or problems

Summary 

We believe we have done justice to your “how to find land to build a house” concern. Therefore, once you find the land where your home will sit and the builder you want to use, the next thing to do is seek a lender. Shop around with different lender options to select a financier for your land purchase with the most convenient fees and terms. 

Avoid the potential pitfalls outlined above, especially when hiring your building team. Ultimately, when you intend to own a new house, you’ll want to work with top real estate agents who specialize in land purchases to walk you through purchasing the right property and building your dream home based on your needs and budget.

San Antonio Texas realtors have the knowledge, experience, and competence you need to complete the process of purchasing land and constructing your dream house. Give us a call today and let’s discuss your expectations and goals towards owning your self-built Texas home.