8 Important Things to Consider When Buying Land to Build a House

Buying a parcel of land with the idea of building a home on it can be more complex than you might expect. Before you get serious buying a lot to build a house, there is much that you should be aware of.  Before you buy land, here are 8 things to consider.

1)    Zoning.  Zoning is critical to understand when buying land.  If you are planning to make an offer on a lot, be sure to thoroughly research the parcel to ensure that the zoning is residential.

2)    Local building codes. It is important to make sure that the local building code and ordinances allow for what you intend to build on the land.  Every piece of land is zoned or classified for specific uses. You can find this information, as well as zoning, from your county or city. The local department that keeps that information is usually called the zoning, planning or building department.  Just because land has residential zoning doesn’t necessarily mean it is buildable.  An example of this is in area of Menifee, CA with residential zoning but it also has a building moratorium for the next several years that states no building is allowed.  You should also consider the “general use” plan for the immediate area where the land is that you are considering to see if there are any plans for that area that might affect the lot.

3)    Financing.  It is very difficult to get a bank loan for the purchase of land.  But do your research as you may be able to find a bank who does loans for land.  Most of the time in our market of southern California, buyers have to pay cash to buy a vacant lot.  Sometimes sellers are willing to give seller-financing options to buyers. If they are, they will usually require a strong down payment and won’t carry the financing for long periods.  We’ve seen that one to three years is common.

4)    Access from a street.  Unless you plan on parking your car on the side of the road and hoofing it to your home, your land must be accessible from a street or road. If the parcel is landlocked, you will need to get an easement across a neighboring property, which means you get permission to pass through the neighbor’s land to get to yours.  This is not an easy process to go through nor is an easement for legal access guaranteed.  Some parcels of land do not have legal access.

5)    Setbacks: This refers to how far from a property line a structure must be situated on the vacant land. If you have 20-foot structure setbacks from either side, but your lot is only 50 feet wide, that means your home can be no greater than 10 feet wide! Odds are that won’t work.

6)    View ordinances: Some local view ordinances may place restrictions on your ability to add a second story to your house. A restriction on the type of home you can build could affect your chance to sell it later and cost you money.

7)    Research the value of the nearby homes.  You will want to make sure that the house you intend to build is of similar value to the nearby houses.  You don’t want to build a home worth $800,000 and be surrounded by homes valued around $400,000. 

8)    Deed restrictions.  Another thing to consider when buying land is if there are any deed restrictions on how you can use the land. These are restrictions found in communities that are governed by a homeowner’s association (HOA). 

This is not a complete list of the things that will need to be taken into account and researched when buying a lot to build on.   But these are some of the major issues.  We recommend that you chose an experienced real estate team or agent,like Pedersen Real Estate, to help you navigate the complexities of buying land.