Buying land to build home

[houstondallas]

Wife and I are looking to buy an acre of land in a 50% developed neighborhood to build a house. The neighborhood is divided into plots by the developer. We plan on buying the land, paying it down for 6 months or so then building later this year.

I've bought land before but it was in a neighborhood with one builder and you were basically buying it with the house they were building. With this situation, we are able to use any builder we want and are just buying the land.

What I need advice on is what I need to be looking for on this land since we have a few different plots in a row to choose from. They have a survey that was done but I don't know what I'm looking at. I don't know if I'm going to need to build up the land before able to build or what money expenses can come later that aren't expected. These are things I can use to negotiate the cost of the land now with the developer. Any one done this before or have any advice? Thanks

[8mpg]

Just ask the developer. If you need to raise the land up to build, all of your neighbors will probably need to do the same. The developer should pull water/sewer/electricity to the street in front of the property being that this is a neighborhood.

Just so you know, land loans are expensive. Most places want 25% down and are set for a balloon payment in 10 years or so. I went though this when buying my land out in Keller. We ended up using Texas Veterans Land Bureau to finance but you must have been a veteran. They are some of the few that do less than 25% down and finance for 30 years. Our "good" interest rate was 7.25% with other regular banks doing 8.25%+. Also, there are not a ton of banks doing land loans. I would hit up local credit unions or local banks. If it is out in the countryish area, check out USDA loans from the govt.

One last thing... You may look into just building now if possible. Construction prices are going up from all the builders we have talked to over the last couple months. We have talked to 8-10 builders while looking at their model homes. The recession seemed to kill a lot of small businesses and now there is less competition. They are getting less bids with higher prices than 6 months ago. The market is increasing again so expect prices to be higher in 6 months. With the possibility of putting 3% down on a house vs 25% down on a land loan, you have to see what will work best for you

[Crownline79]

Check easements, make sure above 532 line, and I think title company checks the lien status. Other than that not too sure...

[S_K]

Determine how much of the land you can build on. Does it have any ditches, ravines, low lying land. Walk it while it's wet. You don't want your yard to be a swamp. Does it have a slope? Are you going to have to do a lot of leveling, buildup? Any lot clearing? What is it going to cost you for utility hookups? You are usually responsible for the cost of the run from your house to the street or alley. Also walks and driveways. AND the big one - HOA rules?

[Grape]

check deed restrictions for the ability to start new construction. I looked at a lot in a built out gated community, the lot is still on the market to this day, however as of nov '11 the HOA voted to disallow any new construction in the community.........

[Vertnut]

I don't know where you're at, but even the cost of a water meter can be $3k-$4k if you're not careful. Water is becoming VERY important, so check and see if it's a city supply or a co-op. Co-op water costs' can be flat out robbery and you can't do a damn thing about it. Everything else is sort of covered in other replies, but there are tons of things to consider.

[houstondallas]

I don't know where you're at, but even the cost of a water meter can be $3k-$4k if you're not careful. Water is becoming VERY important, so check and see if it's a city supply or a co-op. Co-op water costs' can be flat out robbery and you can't do a damn thing about it. Everything else is sort of covered in other replies, but there are tons of things to consider.

No HOA. They have an "architectural approval committee" that approves all construction and regulates additions in the area. There are only 60 homes or so. The homes look very well kept and all looks really maintained for no HOA.

From what I know, the water is well water. Not sure what that means. From what they have told me, there is a supply for the neighborhood and plenty of water. Is that co op water? What makes it so expensive?

[8mpg]

No HOA. They have an "architectural approval committee" that approves all construction and regulates additions in the area. There are only 60 homes or so. The homes look very well kept and all looks really maintained for no HOA.

From what I know, the water is well water. Not sure what that means. From what they have told me, there is a supply for the neighborhood and plenty of water. Is that co op water? What makes it so expensive?

Technically it is a co-op but being a well I wouldnt consider it a co-op. Your group of people will have to pay for electricity and maintenance of the well as well as divide the costs of drilling the thing. You will probably want your own filter at your house to filter all the drinking water. You may want to find out how far down it was drilled and see about getting your own well done on your land. Talk to neighbors and ask how much they pay for water services and who controls the prices/maintenance/etc