Searching for the perfect home can be overwhelming, especially in today’s competitive real estate market, where demand often exceeds supply. It’s not uncommon for desirable homes to attract multiple buyers, making it challenging to find one that meets your needs and fits within your budget.
If you’re looking for more flexibility and control, purchasing a plot of land could be a great option. Building your own home allows you to customize every detail. However, before you move forward, it’s essential to understand the key factors involved in buying land.
Why purchase a plot of land?
People buy plots of land for many reasons, but the primary motivation is the freedom to create exactly what they want (within the boundaries of local zoning laws). Unlike purchasing a preexisting home, owning undeveloped land gives you the flexibility to design and build a custom home that meets your specific needs.
Whether you’re envisioning a house with three large bedrooms, walk-in closets, and ensuite bathrooms, or something entirely unique, owning land allows you to bring your vision to life. Additionally, land can be purchased for non-residential purposes, such as building extra storage, creating a campsite, or even developing parking space.
Can I build a house on a plot of undeveloped land?
Building a house on a plot of land is an exciting possibility, but it’s important to understand that the process can be more complex than it seems.
Before purchasing undeveloped land, one of the first steps is to familiarize yourself with local zoning laws. Ensuring the land is zoned for residential use is crucial before making any financial commitments. Zoning regulations will determine whether you can build a home or need to explore other options for the land.
If the plot isn’t zoned for residential use, you may be able to petition for rezoning. However, this process depends on local government policies and the specific circumstances of the land.
How much does a plot of land cost upfront?
One major drawback of purchasing a plot of land instead of a home is the higher upfront cost.
While there are many loan programs designed to help homebuyers, especially first-time buyers, these options are often not available for land purchases—even if your goal is to build a home on the property. The down payment for undeveloped land is typically much larger compared to a home. For instance, while home loans may only require a down payment of 3-5%, land loans can demand up to 50% upfront.
The loan amount you qualify for depends on various factors, including the property’s characteristics. Because land loans are considered higher-risk by lenders, they can be harder to secure and often come with higher interest rates.
Don’t go it alone
Partnering with a knowledgeable real estate agent is crucial when searching for the right plot of land. Their expertise in the local market and understanding of key factors can make all the difference in your search.
An experienced agent will guide you through essential considerations, such as whether the land has easements, access to main roads, or utility hookups, helping you determine if the property is a sound investment.
Ready to find your ideal plot of land? The experts at Edge Real Estate are here to assist you, just send us a message or give us a call today!