Kelly & West News

6 Things to Consider When Buying a Property to Build a House

Photo by Jahoo Clouseau from Pixels

House hunting is something many adults undergo at some point in life. Though the statistics on homeownership vary, generally, around 65 percent of Americans own a house.

Some people prefer not to buy a house, but to buy some land on which they can build a house. Buying property and then building your own house has its advantages. After all, you can choose where you want to be, you might be able to get a bigger lot, and you can customize the house to your needs.

Buying land can be challenging, though, so here are a few things to keep in mind if you’re pursuing your land-buying dream.

1. Written offer to purchase and contract – Vacant lot/land. In N.C. No agreement to purchase or sell real estate is enforceable unless in writing and signed by the parties. Therefore, you should generally not invest in a survey or even a title search until you have a signed contract. The standard Offer to Purchase includes language about inspections, access, survey, etc. and gives you a due diligence period in which to do those things and allows you to cancel if not satisfied. You should consider having an attorney to advise you to make sure your contract gives you the protections you need.
2.  Do a survey. You need to address whether the seller has a current survey and if not, who will pay for one. You should also conduct an informal survey yourself. Walk the entire property to get a sense of it. You’ll want to look for hills that may need grading, trees you want to keep or not. You might discover someone’s been illegally dumping trash or environmental hazards on the land. Only a current survey will show current encroachments, overlaps, etc.
3. Use your Due Diligence for your inspections. The seller may fill out a disclosure form with the Offer to Purchase, but he or she might also put “no representation” for some of the answers. Or, he or she doesn’t know all the information. Check with the following:
   a. Planning Department – You’ll need to know any zoning restrictions. Often vacant land is empty because people haven’t been able to use it.
   b. Preservation Office – Is the property part of a preservation district or historic district? That may restrict your building materials and size.
   c. Title Search – Have your attorney perform a title search to certify record title to verify ownership and any record liens or other encumbrances of record. Have your attorney or real estate agent provide a copy of any restrictive covenants governing use of the property.
4.  Do the math. Buying a property and then building the house generally costs more than buying an existing house and land together. Factor in the cost for someone to prepare the land for your home build, which can cost thousands. Experts say the land purchase and preparation should not be more than one-quarter of your home construction budget. Land loans are different than a typical mortgage, and banks often require a higher down payment.
5. Consider hookups. If you’re seeking a country home, consider whether the county or nearby municipality offers any power, phone, cable, or water hookups. You may need a well or a septic tank. If you’ve lived in the country before, you know all this, but if you grew up in a city or suburb, that might be something new to consider.
6. Expect a long timeline. Buying land, getting it ready, getting the loans, and then building a house will take time — a lot of it. Such projects can take a year or more. If you’re in a hurry, you’ll be frustrated.

If you need help researching a piece of property, contact our Harnett County real estate attorney team. We can search the records to make sure you’re getting what you want.