Buying Vacant Land: The Do’s and Don'ts
Finding that perfect dream home can be difficult, especially if it hasn’t been built yet. Joking aside, lots of people build their own homes to fit their needs. However, before you just go out and buy some vacant land, we have a couple of suggestions on how to avoid the pitfalls of taking on such a tremendous task.
1.) Go with a Pro
When you buy a house, you work with a real estate agent to discuss the finer details of the process. Buying land requires the same process, just with an agent who knows how to discuss land deals. Treat the land almost like a house; you have to negotiate with the seller to determine the final price you will be potentially paying.
2.) Don’t Expect a Loan
This sounds a little harsh, but banks do not leverage the same with acquiring a loan for land. You will probably have to pay for it with you own money. Banks are a little more stingy when it comes to loans for land compared to houses. However, you are much more likely to get a construction loan because the house will serve as collateral for said loan.
3.) Determine the Home Value in your Neighborhood
Since you are building a house tailored to your tastes, it’s also important to refine your tastes to match the neighborhood you live in. If the cost of the land and the cost to build value greater than the homes in the area, there is a higher chance of your construction loan being denied.
4.) Do the Environmental Tests
Just like a house needs to be checked, so does the land you are buying. These tests help you discover what exactly you are buying, and whether it is worth it. Tests can determine soil contamination, boundaries, potential for flooding, and more.
5.) Hold off on Telling the Neighbors
You are disrupting the status quo of the neighborhood, so it would be wise not to tell your neighbors you are potentially ruining their peace. Neighbors could potentially retaliate if they learn of such a disruption, so it’d be wise not to say anything until you walk through the door of the completed house.
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