Buying a plot of land where you’ll build your dream house is almost like a Jenga game. One wrong move of a piece can easily make the blocks tumble down, ruining any plan you have in mind.
While some people are perfectly fine with buying a ready-made house, it’s understandable that others prefer building their home from the ground up. The good news is that although it’s not easy, it’s still very much possible. This is especially true if you work with professional builders similar to buildguardian.com.
Here’s a quick guide on how to get started on your journey to homeownership:
Table of contents
1. Start Your Search For A Land
Finding the best lot to build on is the first and one of the many essential steps to turning your dream home into a reality. There are many websites right now that will help you look for available lots. You can also refer to property listing platforms that specialize in vacant lots.
To make the search easier, you can work with a local real estate agent for land investment. Your agent can notify you right away once an ideal plot of land shows up in a multiple listing service.
2. Choose The Right Financing Option
Financing vacant land is different from buying a traditional one. But fortunately, there are several financing options today, so you can easily find one that suits you and your budget. Here are a few examples:
- Lot Land Loans
You might need separate financing for your land purchase and home construction if you don’t have a definite building timeline or you’re not eligible for a construction loan. In this case, a land loan is best as it allows you to finance land that is ready for residential development.
As you consider your options, it’s important to note that building lots qualified for these loans have public road access, appropriate zoning, nearby utilities, and a building permit if the lender requires it. And, like any other loan, another requirement is a downpayment calculated from a percentage of your lot amount. So, take that into consideration as well.
- Raw Land Loans
A raw land loan is your next best option if the land you plan to buy is not eligible for a lot or land loan. Unfortunately, obtaining these loans is difficult because lenders categorize them as risky. Down payments for these loans can go as high as 50%, with interest rates much higher than other loans.
- New Construction Loans
With new construction loans, you can finance both your land purchase and the construction expenses. These loans typically convert into permanent mortgages after the completion of the construction project.
One of the benefits of new construction loans is that lenders often require smaller down payments compared to separate financing for land purchase and construction. Lenders typically require a 10% to 20% downpayment on these construction loans. Credit unions and banks can even lower these down payments if you pay higher interest rates.
But it’s common for lenders to implement more stringent requirements for these loans. Comprehensive architectural plans, a low debt-to-income (DTI) ratio, and outstanding credit are required to qualify for a new construction loan.
- Seller Financing
A seller financing option is often available for most vacant lands for sale. In this arrangement, the buyer will pay for the property directly to the owner, albeit on a definite term that will be agreed upon by both parties. It’s a good choice for those buyers who have difficulty financing their land purchase with traditional lenders.
These are some financing options you can consider. When choosing the most suitable for your needs and budget, don’t forget to keep how much the cost is to build a house. This way, your finances will be ready before you start the construction.
3. Be Familiar With The Area’s Zoning Restrictions
If you buy an existing house, you can have peace of mind knowing it has already passed zoning requirements. However, it’s an entirely different story if you buy vacant land and build a house on it. So, before you get too excited about starting the construction of your new home, make sure you know what you can and can’t do with the property before signing the dotted line.
Any plans for building a new house can quickly go down the drain if you buy land entangled with zoning restrictions. Hence, be sure to conduct due diligence and do your research. Pay a quick visit to the county planning office and ask them if building restrictions exist on the property.
If you don’t have much idea about what to ask in the first place, your real estate agent can guide you through the entire process. They can also assist you in finding valuable details that might harm the possible value and usage of the land.
4. Survey The Land
Hiring a professional to survey the area is a critical aspect of land purchase. The surveyor can provide you with specific information about the land, such as its dimensions and accessibility for building purposes. Plus, they can determine if someone else has a rightful claim to use the property.
Aside from these, you also have to check if the soil on the lot may hinder house construction. Environmental issues may also pop up out of nowhere that can make it impossible or even dangerous to do any construction project.
It’s also important to check if the lot is classified as a wetland due to the severe regulations associated with these types of properties. Federal, state, county, and city laws may vary. So, it is imperative to look for local wetland inventory maps to quickly spot problem areas before buying one mistakenly.
5. Calculate Utility Costs
Basic utilities like electricity, natural gas, and water are all must-haves for any residential property. These are often under the management of the county. If your preferred piece of land is in a rural setting, don’t forget to check if utilities are already installed in place.
However, if there are no existing utilities, get a rough estimate of the additional cost of running electrical lines and installing a septic system and a well.
If you’re unsure about the extent of the required work, you can hire a real estate expert to assist you in sourcing quotes and finding trusted contractors in the area. Be ready to adjust your purchasing budget depending on the quotes you get.
6. Ask For Local Home Builder Quotes
You’ve finally come to the most exciting part: designing your dream home. To work with a builder who fully understands your needs, communicate your schedule and expectations clearly.
Try to talk to a few contractors and request detailed quotes. On average, completing custom home builds can take more than six months. Within this period, you and your contractor must be on the same page regarding the total project cost and the date when you expect to move into your new home. The most thrilling part of getting a custom house is that you can design it according to your preferences.
But, during the design process, you have to consider one thing. Although your new home may have been your dream for years, it may not necessarily appeal to potential buyers in the future. Times can be uncertain, and you might need to sell your dream house in the future. If it does happen, it is best to consult a local real estate agent who can help you pick the best features to increase your property’s resale value. Your agent can also give you a walkthrough of what to expect if you sell your house.
Working with a professional can also keep you away from common pitfalls like overbuilding your house that will make it impossible for you to recoup your investment later on.
Building Your Dream Home: Your House Construction Timeline
Now that everything’s all set, it’s time to begin the construction of your dream home. Here’s a general timeline for residential construction to give you a good idea of how your house will be built from scratch.
- Pre-Build
Make sure you have a comprehensive building plan before the shovel hits the soil. This is also the time when your budget meets your vision. It’s also when you’ll start working with designers, architects, engineers, inspectors, real estate agents, lenders, contractors, and tradespeople to build the home of your dreams without blowing your budget.
Once the construction officially starts, remember that it will now get more expensive, time-consuming, and downright tricky to change materials, floorplans, and designs. So, you must be certain about all your needs and wants in advance and communicate them with everyone involved in the project.
- Excavation And Leveling Of The Land
On week one of your construction projects, the construction crew will have the land ready for the foundation. They will level the ground, remove large boulders that may hinder the process, put up erosion barriers, and excavate a spot if your house plan includes a crawl space or basement.
This stage also involves the placement of concrete bases or footers that will serve as support for your home’s foundation.
- Foundation Work
After placing the footers and ensuring they pass inspection, the foundation work will follow. The crew will pour the foundation’s concrete slab that will create a sturdy base on where your house will be built.
- Framing
Your house will start taking shape once the crew begins moving into the framing phase of the project. You can think of framing as something similar to a skeleton, but this time, it’s your home’s skeleton. It’s where you will see the development of the cut-outs for windows and doors, the different levels, and the floor plan in general.
The roof and exterior walls will be finished by this time, together with the sheathing that will protect your home from the different elements during the construction. The inspector will also visit again to ensure the framing passes the code.
- Mechanicals
This next stage may lack the same drama as installing your home’s roof and walls. But it is still deemed necessary as it includes the installation of your electrical systems, plumbing, home security system wiring, and cooling and heating units.
After installing this mechanicals, you can feel at ease knowing that your outlets are working, you have running water in the house, and you have all the necessary wiring for your appliances and light fixtures.
Since the wiring is often covered by insulation, an inspector will check your electrical systems first and approve them before the insulation is added.
- Drywall And Insulation
Insulation is the part that comes next together with the drywall. It’s installed by your contractor to keep your home’s temperature cozy. This could also serve as your home’s soundproofing.
The drywall will then be installed next to the interior. Sanding and priming will follow with a first coat of paint, too. You’ll finally see your house transformed into a home at this stage.
- Painting and Flooring
This is the time when your envisioned design finally comes to fruition. Your chosen cabinets and floors will now be installed with the interior doors and built-in shelves. A coat of paint will also be applied to all the walls.
The crew will also make some finishing touches to the exterior walls, including siding, stucco, or brick. Your walkways, driveway, and landscaping will also be worked on by now.
- Fixtures and Appliances
You’re almost there! Days will be busier as subcontractors, electricians, and plumbers work on your countertops, faucets, sinks, outlet covers, light fixtures, appliances, and other necessities.
It’s also time to turn on your electricity and HVAC system to ensure that things are working fine as they are meant to. You’ll also notice significant changes outside your house after the workers do their magic on your landscaping and exterior.
- Finishing Touches
Now that your move-in date is just around the corner, conducting a final inspection is the only box left to be checked. The inspector will ensure that every element and aspect of your building passes the code and meets all safety requirements.
You also need to do the last walkthrough inspection and note any minor changes or issues you’d want to address.
Once you find everything satisfactory and up to your and the inspector’s standards, all that’s left for you to do is go to your new house, move your stuff, and relish the fact that your dream home is no longer just a dream.
Conclusion
The mere thought of buying land and building your dream home is more than enough to make you all panicky and nervous. No one can blame you since it’s no easy feat. However, as long as you follow the basic guidelines, you can guarantee a new house will be ready to welcome you in no time.