How To Buy Land & Build On It

How To Buy Land & Build On It
••• agricultural land image by Kostyantyn Ivanyshen from

Buying land to build on can be highly desirable for some buyers. If you aren't able to find just the property you are looking for as a newly built or resale home, buying land and building your dream property is an option. Assessing a property for development and building the structure, however, can be a challenging undertaking, so hiring the right professionals to assist you is key.

Get pre-approved for a mortgage for both the land and property. Land owners, like other property owners, will likely require you to have a letter of pre-approval prior to seriously considering an offer on their property. This will also help you determine how much you can afford.

Contact real estate agents in the area in which you plan to buy. Interview your agent about his or her experience with the purchase of raw land in the area you are considering and ask for referrals. There are many considerations to purchasing raw land. These may include but are not limited to: does the property have city water and sewage? Does the property have gas and electric utilities? Are the above-mentioned utilities run to the house or just to the street? What are the building restrictions specific to this area of the city or county? What permitting processes are required?

Contact builders and architects in the area and interview them extensively. Both the builder and architect should be even more familiar with the land characteristics, land ordinances and permitting processes than the real estate agent.

Make an offer on the land and negotiate with the assistance of your real estate agent. You may receive a counter-offer from the seller; you should work with your agent to counter this offer and, if possible, agree to a final price.

Get the property under contract, and work with your agent to close.

Work with your architect and builder to devise plans and begin building once your property purchase is final. Plan to be on-site regularly to ensure your specifications for the property are being met or enlist your agent to be a liaison between you and your builder. Undoing mistakes made during building is challenging in the best of situations, so being present to ensure the process is meeting your specifications can save a lot of time and frustration in the long run.


  • Work with an agent in this process. As a buyer, it is tempting to cut an agent out of the process, as a builder typically doesn't want to pay an agent and will likely steer you in this direction. However, this is not in the buyer's best interest. A real estate agent who is a member of the National Association of Realtors has a legal responsibility to watch out for your bottom line. The builder, while he might have your interest in mind, is watching out for his own bottom line first and foremost.

    You will likely require a custom home builder if you are purchasing a large tract of land in a highly undeveloped area. If you are purchasing a lot in a set subdivision, however, you will typically have a set of builders and housing plans to choose from.


  • You can begin working with an architect to devise plans prior to close, however, bear in mind that if the land does not close you could be left with architectural plans you have paid for but cannot use on another piece of land.

    Check the Better Business Bureau for complaints against architects or builders and your state real estate commission for any complaints against a real estate agent prior to contracting with them.