The question many upcoming homeowners ask when starting from scratch in the whole process, is whether to buy the land first and then find a home builder, or find and take on the builder and then look for land. There may be pluses and minuses either way.
If you decide to buy land prior to finding a builder, and this is perhaps your first land purchase, there are a number of important points you must absolutely get answered before even considering a land purchase. Especially if the lot you’re looking at is in an unknown area and isn’t in a residential neighborhood. Here are some legal points to investigate:
- Is the lot buildable? (some may prove not to be)
- Is it suitable for a conventional septic system, or will an expensive system have to be brought in as an alternative?
- Does the seller have legal title to the property?
- Are the boundaries clearly marked?
- Is it zoned for residential housing?
These are some initial questions to get answered. If more information about the land is needed, then some questions that may be investigated can include:
- Does the land have adequate road frontage to build?
- Are there any legal “roadblocks”? (ex., easements, rights-of-way, liens) preventing immediate construction?
- Is there sufficient potable water?
- Were toxins or other chemicals ever stored on the property? (if so, this could be an expensive and timely clean-up)
There are also matters of construction, design, and other factors to consider. But sometimes it happens someone sees a piece of land and they just think to themself, “I’ve got to have that property”. This is a tough compulsion to keep in check. Well, at the very least (before getting out the checkbook to make that impulse down payment) you should bring in a surveyor to see where it’s acceptable for a new construction home.
After having a surveyor make their report, and the compulsion is still there, then the best legal move at this point would be to make an offer on the land with a due diligence period. This would give you time to bring in builders to review and evaluate the situation.
If you want to hire a builder first, there are a number of positives in doing so. Professional builders may already have a number of lots and land available and have already configured improvement costs on these properties, able to provide one final price. Experienced builders in the area are well-familiar with the process of selecting residential home sites and are knowledgeable about city utilities in the area. Some experienced builders have bought and sold literally thousands of lots in the recent past, so full trust can be put into their hands if the customer should elect to go this route in the process.
Determining whether to purchase land first or hiring a builder first is the first big step in a new land and home purchase and should be carefully considered.