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What to Look For When Buying Land to Build a Home

Updated January 15, 2019
Ryan Hanson
Ryan Hanson

Designing and building a new home is often stressful, but it doesn’t have to be. That’s where Ryan comes in, who is the Partner and Co-owner of S9. Ryan manges the day-to-day operations of the build, and ensures that our clients are satisfied through regular updates and budget reviews. At S9, the client always comes first and Ryan makes sure that they are involved in the building process and aware of how the project is going at all times.

You’ve heard it before; when it comes to the value of your home, it’s all about location, location, location. But being next to your favorite patch of woods or a beautiful lake doesn’t mean that that spot is the perfect place for your new home. There are a multitude of other factors to consider when looking to buy land to build on, and in this post, we’re going to give you the rundown.

Location

Yes, location does matter — a lot in fact. When you’re building a new home from scratch, you should have the mindset that the house you build will be your forever home. Or at least your home until you move to the tropics after retirement.

So, consider where you are in relation to restaurants, biking trails, coffee shops, bars, movie theaters, and other spots where you find yourself spending a lot of time. Many new home builders want to keep sustainability in mind, and so making sure that they are within walking, biking, or short driving distances to their favorite stores and restaurants is a top priority.

location of a plot of land to build a house on

Unique Features

Going along with the location of the land, many home builders look for a unique, distinctive feature to separate it from other homes. For example, a body of water such as a creek or lake, or a private wooded area are two features that many modern home builders seek out.

Finding that unique feature will make your new home all the more special.

secluded house

Soil

It’s important that you undergo a soil test before starting to build on a plot of land. This is to make sure that the land is safe enough to build on and to see if there are any soil constraints, like peat. Peat, also known as turf, is an accumulation of partially decayed vegetation or organic matter. It’s essential that you make sure that you have a solid enough foundation for a building.

Keep in mind that even if you do find that your plot of land is located on top of peat, then you can still build there. However, it will require a more technical and expensive base for your home to ensure that it doesn’t sink into the ground. This is a good tidbit to understand, especially if you have the perfect plot of land for your home but the soil isn’t great.

land and soil in a construction zone

Landscape

Similar to the quality of the soil, you can still build a home even if the landscape conditions aren’t perfect. Once again, it will cost you extra funds to make it work. A good example of this is when someone wants to build their home on a hill. The benefits to building on a slant are that you can have some great modern designs with spectacular views, but it is much more difficult to build on this type of landscape, and there are specific challenges that you will encounter every time. It can certainly be done, but it may take longer, and you may run into more setbacks compared to building on flat land.

Questions to Ask When Buying Land to Build a Home

As you start to look at different lots either with a real estate agent or on your own, it’s going to be important that you not only know what you’re looking for but also that you know what questions to ask when it comes to getting the right piece of land for your home. Here are three important questions that you should understand before you decide to purchase a piece of land.

How is it Zoned?

Before you decide to make an offer on a parcel of land, be sure that you’ll have the ability to build on the land at some point in the future.

Are There Utility Hookups?

Utility hookups such as power, water, and sewage will be essential for your home. If you’re located in a more remote area, there’s a chance that you won’t have any one of the three hookups you’ll need. In that case, you’ll have to contact the local utility company as well as the city. They can help you learn whether or not getting utilities into your lot is possible and how much it will cost to do so.

For city lots, this problem might not be as common or complicated, but it’s good to know what’s out there and what can, in some cases, be difficult.

How Much Preparation Will the Lot Need?

It’s always good to ask yourself how much preparation a lot will need before you start bidding on it. Sometimes you’ll need to remove multiple trees, clean out rocks and weeds from the places where you want your yard.

You might even need to level the ground where you want your home to be built, and thus you’ll need to pay an excavation company to move some of the first for you.

Financing the Purchase of Land and the Construction

After you’ve found the right piece of property for your home to be built on, you’ll need to make some decisions on how you’ll undergo financing both the land and the construction. There are three different types of loans that you can get for a piece of property that you’re going to build a future home on.

Land or Lot Loan

The first option is a land or lot loan. A land loan is a loan for a raw piece of land that hasn’t yet been set up for construction. This means it wouldn’t have zoning or utilities done.

A lot loan is for a piece of property that is set up to be built on already. These loans are essentially the same as land loans but have some different specifical because of the utilities or access to them that are likely located on the lot.

Note that land loans and lot loans often have higher interest rates than construction or home loans because they have a higher default rate due to the fact that it’s harder to sell land that hasn’t been built on.

Construction Loans

Construction loans are short, likely 1-2 year loans specifically to fund your construction project’s budget. The loan is often paid out in stages as the construction project goes. After the construction is finished, it will have to be converted into a more permanent loan.

Construction to Permanent Loans

After the home is complete, construction to a permanent loan will be rolled into a mortgage. In order to roll it over, you’ll need to pay interest from the construction portion of the loan, and then it will become a regular mortgage for your home.

Finding a Builder and Designer to Work With

You won’t be able to start on your construction project until you find a builder to work with. There’s a number of builders on the market, but the best way to find the right one is to look at their previous projects, style, and reviews.

For instance, at Sustainable 9, we have a projects page where you can learn about each of the projects that we’ve completed over the past few years. Additionally, you can find our reviews on Google and see more pictures of our builds on Instagram and Pinterest.

woman working with home builder and inspecting the blueprints

Ensure that You Have All the Right Permits

Before you get too far into the project, you’ll need to contact the city and possibly the county to get all of the permits for the project that you’re completing. This can be a simple or extensive process depending on how busy the organization is and how big your project is.

In many cases, your builder can take care of all of the permits for you so that you, as the home builder, don’t have to worry about making sure you have the right permits.

Clearing the Land for Building

Last up; you’ll need to clear the land and make sure it’s ready for building. Ultimately we say that the best way to do this is to partner with your builder and have them refer a company or take care of the management of that part of the project.

We wish you the best in your design and build process! We’d love to work with you if you’re interested in building a home somewhere in Minnesota. Reach out to us today!

Overall, Be Picky

As previously mentioned, this new home should be your forever home. So, when it comes to looking for the right location, don’t be afraid to be a little picky. If you don’t absolutely love the location and characteristics of the land, then odds are you won’t completely love your home either. Deciding where to build your home is a big decision and one that shouldn’t be taken lightly.

At Sustainable 9, we can help you find the perfect plot of land for your new living space. We know a thing or two about what makes a home special, and one of those details is the location of the home. Ultimately, the decision is your own, but we will be with you every step of the way to collaborate not just on the location of your home, but every small detail that will make your house special.

If you’re looking to build a new, modern, and sustainable home that will last a lifetime, give us a call at (612) 540-0871 or send us a message to let us know how we can help you get started on crafting the perfect home for you.

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Ryan Hanson
Ryan Hanson

Designing and building a new home is often stressful, but it doesn’t have to be. That’s where Ryan comes in, who is the Partner and Co-owner of S9. Ryan manges the day-to-day operations of the build, and ensures that our clients are satisfied through regular updates and budget reviews. At S9, the client always comes first and Ryan makes sure that they are involved in the building process and aware of how the project is going at all times.

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