The next step in building a home, is figuring out just where it should go. If you've inherited land, or already own a piece where you'd like to build you can skip this post (and sigh with relief!). Chances are though, that this will be part of the process. And though it's an exciting part, it's can also be quite overwhelming.
A word of caution, be sure that when you start looking for property, you're ready to POUNCE! Once you start looking for land things tend to move quickly. You'll surely find something you love and won't want to miss it!
In addition to your dream checklist (mountain view, creek, river frontage, acreage, oceanfront etc), there are several things you should consider when looking for a place to build. Once you're serious about a piece of property, here's a list of things you may want to ask:
Do you like the neighborhood?
Are the surrounding homes nice? In other words, do you think your home will appraise well, given the area?
If you have or plan to have children, is there a school district you should consider?
Is their a survey on file? If not, who's responsible for getting one?
Does it have a well and septic permit? If not, who's responsible for getting one?
Are there any right of way issues? Your realtor should be able to pull the deed to verify.
If it's close to a creek or river, is there a floodzone issue?
Will you be able to maintain the mineral rights?
We had a lengthy checklist, but honestly what I was really looking for was a sense of 'this is home' when I walked out on the land. We looked at 100's of properties (nearly everything in the area code) before we settled on the right piece. My suggestion is to do most of the work and driving yourself before you involve a realtor. Odds are you'll know just by driving out to the land whether or not you like it or not, based on location, neighbors and site.
I also loved using the Zillow app on my phone to set an alert for anything that fell in our desired location and price range, that way I got daily alerts of new properties being listed. Another trick I learned (and loved!) was how to use the GIS map for our county (just search "GIS map + your county's name"). I could look up the property we were visiting and see exactly where the property lines were. It's surprising how often they aren't what you were expecting!
Once you've found a piece of land that fits all of your criteria, it's time to make an offer. This is the exciting part! Contact your realtor, make an offer and wait to hear the response. Once you're officially under contract for a piece of land, your bank will walk you through the necessary next steps. You'll get permits (if needed), find a contractor (more on that soon) and get an appraisal.
The appraisal is a biggie - basically the bank needs to make sure that what you want to build appraises for enough. An appraiser will take into consideration the land value, your house plans and comps in the area - then compare that against how much you're asking to borrow. Generally, a bank will loan around 90% of the appraisal value. You'll want to get this completed BEFORE your due diligence date, because if there's an issue with the appraisal you'll either need to bring more cash to closing, change your house plans considerably or consider looking for a different piece of property all together.
When all the stars align and you find the piece of land you want to call HOME (like we did!), it's an incredible feeling. Seeing something come together from such an early stage is truly amazing.
During all this (and possibly before) you'll need to finalize your house plans. That's what we'll talk about next!