How to Buy a Lot and Build a Home

Though many consumers may think they don’t need a REALTOR for new construction, a good agent can be an invaluable resource, especially if you’re planning a custom build. An agent is there to represent your interests, from thinking through the home you want to build to negotiating land purchase.

Choosing Your Home Style
Before you begin the hunt for the perfect lot, start by thinking through the style of home you want to have built. This can have an impact on lot size, neighborhood, and more. It can also help when it comes time to select a builder. As you’re making a list of ideas, be sure to note any local builders you come across.

Don’t be afraid to involve your agent at this step in the process. At Benchmark, our agents understand current market trends so they can help you better evaluate potential home features and design, which can have a big impact on resale down the road.

Learn Your Local Building Ordinances

Once you have an idea of the size and style you’re looking for in a home, it’s time to start researching. An agent with experience negotiating land deals can be a big help in putting the pieces together for this part of the process.

Zones, codes and ordinances may limit what can be built on a lot and may require certain steps to ensure you build a sound structure. From design restrictions in a historic district to setbacks from the edge of the property, it’s better to understand what a lot entails before deciding it’s the one. It’s not always possible to get a lot rezoned, so you need to plan for this from the outset.

Research Builders
Another important part of your research is finding the right builder. Your real estate agent may have suggestions from past clients, or if you’re already working with an architect, they may have a few recommendations. For a more in-depth look, pick up the phone and give your local home builders’ association a call to get a list of custom home builders. Once you have this, it’s time to dig in.

Review sites can be a big help. Check Nextdoor for local recommendations and Houzz for reviews and project photos. For the builders you’re really interested, call them up and ask if they can put you in touch with past clients.

Understanding Your Financing Options
Land doesn’t provide the same leverage as a home, so if you’re looking to purchase a lot without an existing structure, it’s likely you’ll be making a cash purchase. Instead, set your financing sights on getting a structure loan for the building itself. While these types of loans tend to have higher rates than a traditional mortgage, once construction is complete, you can refinance.

You’ll also need be able to prove project viability for this type of loan—think project timetable, a realistic budget, and a comprehensive list of construction details. This is why it helps to already be in talks with a builder at this stage.

Working with the Best Agents
If you’re looking for an agent who can provide valuable insight throughout the process, beyond negotiating the land purchase, contact your local Benchmark office. If you’re an agent looking to join a team that provides the best for their clients, you’ve come to the right place. Take our quick online assessment to see if you’d be a fit for the Benchmark team today.

By |2018-01-04T15:55:54+00:00January 4th, 2018|Agent Blog, Blog, Consumer Blog, Featured Blog Posts|0 Comments

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