Answers to Frequently Asked Land Selling Questions

What To Look For When Buying Land To Build A House

When investing in real estate property, some people buy houses that meet their criteria and where they see themselves living for the foreseeable future. Others, however, want to build their dream houses themselves and witness them rise from scratch. The latter opts to invest in vacant land so that they can have more control over the architecture and renovation of their future homes.

If you are like the latter and are scouting for vacant land where your home will stand, your top priority is finding the best parcel of land to suit your preferences and needs. In this article, we lay down a step-by-step guide to help you find vacant land for sale, as well as the important things to look for in potential land investments. You can also check out our vacant land buying guide here to learn more.

Step-by-Step Guide to Buying Land

1. Scour Land For Sale

Because the market for vacant parcels of land is limited, it’s more difficult to find viable properties for sale and residential use — but it’s not impossible as long as you know where to look. The first step of your search should be asking around. Word of mouth referrals are common in the land market, so ask friends, colleagues, or brokers in your community about any available properties.

You can also opt to visit the neighborhood where you want to live and drive around to spot any land you’re interested in. If you find one, get the owner’s tax records and inquire if the land is for sale.

2. Do Your Research

Just because it’s difficult to find vacant land for sale, doesn’t mean you should just purchase the first one that becomes available. You have to do your due diligence and research whether or not that parcel of land is right for you. To do this, begin with a criterion that includes your priorities and preferences, your budget, the land’s location, as well as technical and legal considerations.

Some important things to know include:

Zoning Classification

Determine how the land can be used, as well as any easements or potential title issues. You are looking for residential land. If the zoning regulations classify the land as industrial or agricultural, for example, it’s best to look for other options because changing a zoning decision can be difficult and expensive.


As much as possible, you want your land to come with utilities such as water, cell phone service, power, and sewage lines. Buying land that already has these essentials installed will save you a lot of time and money when building your house.

Cost to Prepare the Land for Building

As part of the initial steps to building your house, you need to prepare the land. This involves cleaning, grading, and demolishing any existing structures as needed. Of course, these come with a cost. On average, preparation measures will run anywhere between $1,400 to $5,300.


Once you have closed your transaction for the land, it doesn’t mean that you can immediately start building your home. The end of the sale triggers the beginning of other things you need to do, such as:

  • Getting permits
  • Installing utilities
  • Conducting land surveys
  • Finding contractors
  • Obtaining financing
  • Commencing the building process

All these steps (and more) can take up to two years to complete, so you need to set your timeline right from the beginning.

3. Finance Your Investment

Unless you are able to pay the value of the land in cash, you will need to set up your financing. For a project like yours, you need to get a loan to settle the land’s purchase price and a loan to finance construction. Your mortgage advisor can help you find and access available loan options to cover your expenses.

You also need to know the types of loans that you can obtain. Here are some:

  • Land loan: Obtained for raw land or properties that are undeveloped.
  • Lot loan: Obtained for developed land that is connected to utilities or has been surveyed and accomplished construction permits.
  • USDA Rural Housing Site Loan: A government-backed loan that is available for land located in rural areas.
  • Construction loan: Short-term loan to finance the building project.
  • Construction to permanent loan: Finances the construction and becomes a regular mortgage on the property.

4. Arrange Your Building Project

Once you have successfully purchased vacant land and the title has been delegated to you, it’s time to start arranging the specifics of your building project. The first step in this phase is to find the right contractors, architects, and builders. Make sure that you choose the best professionals who can accommodate your needs and turn your dream house into a reality.

Next, you will need to get your building permits ready and approved. Your contractors and builders can inform you about the permits that you need to obtain, such as electrical or plumbing paperwork.

When you’ve engaged the right professionals for the project and have accomplished the required permits, your contractors can begin building your home.

Make Informed Decisions

The process of buying land where your dream house will rise requires a lot of work, preparation, and of course, patience. Keep yourself informed throughout the whole process to make it more seamless and hassle-free.