Purchasing land for a home can be done in two ways. Some home builders begin with a floor plan and then search for a lot that will fit the house. Other home builders find the lot and then have a house designed specifically to fit the land’s terrain. The second method is common when purchasing land that may have an ideal location, yet the lot is sloped or needs special preparation or retaining walls.
Walk the lot, from the front to the back to get a feel of the terrain. What might seem like a level lot when looking from the street may actually be considered sloped and require additional grading. During the inspection period, have your contractor look at the lot and give you an idea of what it will cost to have the land prepared for construction.
Explore the financing options for purchasing the land. If there is a loan on the land, it will typically need to be paid off before you can obtain a construction loan, as lenders are reluctant to subordinate to a construction loan. Some home builders use equity from existing property to purchase land, and others work with lenders to find suitable construction loan packages.