Recently, we posted part one of the list of things you need to think about when buying a piece of land to build your custom home on. Today, we will be finishing the list up so you can get a comprehensive idea of what to expect! As always, if you have any questions about the home building process or would like to speak to our team about starting your own project, Splittgerber Professional Builders would be happy to assist you. Give us a call today! 

Easements 

If there is an easement on the title of the property, you will want to know about it before you commit to buying. An easement gives another person or entity the legal right to use another person’s property for distinct purposes, regardless of who actually owns it. For example, a utility company may have an easement that allows them access to an electrical pole on your property. Or, you could have an easement on part of your property if it blocks access to a main road. 

 

Get Clear on How Much Preparation the Lot Will Need

Clearing and grading land can be a significant cost. HomeAdvisor.com finds that most homeowners spend between $1,250 and $4,200 to clear the land to prepare for the construction of the house, with costs fluctuating based on how heavily wooded the areas is and the location 

Average land grading runs between $0.47 and $2.28 per square foot, but that will vary based on how much work needs to be done. In addition, if there are any existing structures that need to be demolished, you’ll need to get an estimate for the work and debris removal.

If you are buying a piece of land on an unestablished, rural area — without prior soil testing — you should have a soil test administered on your lot. This is necessary because a lot with unwanted soil class will be very costly to stabilize. Likewise, lots that are rocky or in need of tree removal will cost more to build on. 

 

Orientation of the Lot

One of the most important aspects of construction is the orientation of the build. In the Northern Hemisphere, the most popular orientation for the front of the house is a south-facing build. A south-facing property allows the sun to passively heat your home in winter, which helps you save on your electricity bill. It’s worth consulting with your home builder, as they will know how you can do this most efficiently based on your location and the weather conditions you experience over an average year. 

Carefully choosing the placement of your home will not only reduce your heating bills but also allow your house to be ‘greener.’ In addition to the placement of your home, you need to think about the location of the windows, as this will have a significant impact on your electricity bill. 

 

Lot Loan

Depending on the infrastructure already on your lot, you will either need a “land loan,” which is just for the raw land, or a “lot loan,” which means that some of the pieces are in place, like the utilities. Often, the rates for a land or lot loan might be a bit higher because lenders consider these loans riskier since it’s not as easy to sell as a developed lot if you decide to ultimately not to build the home. 

After you have found the lot of your dreams, you will need to provide the bank with a new survey and information about zoning and land-use restrictions on the property. The more improved the land, the lower your borrowing cost. Since you are likely planning a building on the land, you may expect a 30 percent down payment on both the land cost of the building combined. 

 

Liens

A lien is a legal notice that is attached to a property’s title to unpaid debt. It gives the unpaid party a legal claim to a portion of the property when it’s sold. Sometimes, property owners do not even know there is a lien on the property. You can find out if there is a lien on a property with simple website searches of the county recorder, clerk, or tax assessor’s office. If the property you are interested in has a lien, you will need to make sure the debt is resolved and the lien removed prior to purchasing the lot. 

Final Thoughts

There is no better way to ensure the home you buy is fully customized to your liking than to build it yourself! But the first step, after deciding you want to build a custom home, that is, is to buy the land you want to build on, and that comes with its own hefty set of tasks. If you are serious about building your own custom home in northern Colorado, the custom home builders at Splittgerber Professional Builders would be honored to assist you! Give us a call to learn more about our process. We look forward to working with you.