What to Look for When Buying Land


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Eight things to consider when buying property to build a new home.

Buying land to build a home or cottage requires homework because you want to ensure that you choose a property that will suit your needs. Due diligence will also help avoid surprises down the road. Discover these eight things to consider when buying land to build on.

How is the property zoned?

Zoning is a tool used by municipalities to manage land use, protect property values and keep people safe. In simple terms, local zoning ordinances determine how a property may be used: residential, agricultural, industrial or commercial.

When looking to build a home, you’ll most likely look for property zoned residential. If you’re looking for rural setting, you might also consider agricultural land.

Pay attention to where a property is located within a zone. For example, some residential properties are adjacent to commercial or agricultural zoning.

If you buy property in an agricultural setting, you’ll enjoy the rural atmosphere but remember that the country atmosphere may also come with strong aromas and sounds from farming operations.

If a property is a near commercial zoning, there could be high volumes of traffic. Decide how this might affect your enjoyment of a home in that particular place.

Always identify the zoning designation for the parcel you might buy and the surrounding properties.

Are there any easements on the land?

An easement gives another person or organization the permanent right to use someone else’s land for a specific purpose. For example, someone who owns an adjacent  property without direct access to the road may have an easement for a driveway. Or, a utility may have an easement for overhead or buried power lines.

Easements that allow another party to use a narrowly specified portion of another person’s property are not uncommon. Make sure you identify any easements on property you’re considering to be sure they won’t interfere with your intended plans. You won’t be able to build anything within the easement.

What needs to be done to make the land buildable?

Every lot is different. If the land requires any of the following, make sure your budget can handle the expense:

  • Clearing of trees and brush
  • Building a septic system or connecting to a municipal sewer system
  • Drilling a well or connecting a municipal water system
  • Demolition of existing structures and hauling away debris
  • Grading of the land
Do you need a percolation test?

Percolation is important if you’re considering vacant land that will need a septic system. This test measures the rate at which water drains through the soil.

Land that doesn’t percolate doesn’t mean it’s unbuildable; you may be able to get around the issue with an engineered septic system. However, you’ll want to know about this before you buy the land.

Is the property at risk of damage from climate?

The First Street Foundation provides risk assessment by address for flood, wildfire, heat, and wind with its free, online risk factor tool.

When building a new home, you can take advantage of the latest materials and building techniques to help mitigate risks.

What utilities are available?

When you start with raw, undeveloped land, you’ll need to invest in hooking up utilities.  However, the first step is to find out what utilities are available, including:

  • Electricity
  • Natural gas
  • Water/Sewer
  • Internet
  • Phone

If a property is not serviced by natural gas lines, you might choose a home heating system that uses propane stored in an above-ground tank on your property.

If you work remotely or plan to run a business from home, it’s especially important to make sure you have access to reliable phone and internet service.

The cost of installing electrical, gas, sewer and water lines will vary depending on how far your future home will be from the utilities running through the public right-of-way, which is usually near the road. However, in some cases, the nearest place to tap into utilities could be down the road and the cost of bringing them to a property will increase accordingly.

What can and cannot be done on the land?

If you dream of free-range chickens and goats roaming your land, you don’t want to find out that these activities are prohibited by local laws after you’ve purchased land. Do your homework before making a purchase offer to ensure the land can be used the way you’d like. You can learn about local laws and ordinances at the city or township office.

If the parcel you desire is part of a homeowners association, there are likely restrictions on anything visible outside your home (exterior finishes, fencing, landscaping, etc.), what types of vehicle can be parked in the driveway and rules about holiday décor. Thoroughly review the association’s covenants, conditions and restrictions before you make an offer. HOA rules could interfere with the way you envision your dream home.

Paying for land and new construction

Unless you have large stash of cash, you’ll likely need financing for land and construction. At Consumers, we have competitive construction loans with land and lot loans, as well as construction loans with one-time closing fees only.

Consumers helps more than 2,000 members finance land, first and second homes, and home improvement projects each year. We’d love to help you with a mortgage or home equity line of credit; contact us online or call us at 800-991-2221.

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Consumers home loans

We’d love to help you with a mortgage or home equity line of credit.

Learn more.

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