Tips for Buying Land to Build a New House

February 21, 2024

Learn how to choose the ideal lot, select the right builder, and navigate the construction process to create a living space that's uniquely yours.

Lets face it, the housing market has experienced the lowest housing inventory ever.

As a buyer, in almost every price point, it is next to impossible to purchase without engaging in competition.

If you are looking to buy a home, choosing a different route may not be a bad idea.

Shopping for vacant land for sale is a slightly different process than shopping for an existing home, ergo it is important to be well informed and prepared.

This logic applies equally if you’re looking for rural land and if you’re looking for a vacant lot in a more urban area.

What is a vacant lot? A vacant lot is a parcel of property without any buildings on it.

A Lot is a vacant land meaning. Doing your due diligence ahead of time makes the process much easier to find the right lot for your next home to be built on.

A simple vacant land purchase agreement is where it starts.

I have a couple tips and tricks to help you. Here's what to look for when buying land to build a house.

Determine the Ideal Location

Location is naturally the most important characteristic with all real estate, therefore it should be the chief determining factor of where you should build your house.

In addition to the location of the lot, the position of the lot is very important as well; how it faces the road, how it slopes and where on the lot could realistically be located.

As to any consideration of your future home, the commute times to where you and your family frequent is also important.

At any rate, location undeniably impacts price, so consider school districts, shopping, neighboring attractions, the desirability of the community, and anything else that may impact the value of the dirt and if its quality vacant land.

Pro Tip:

  • Choose a lot in a neighborhood that you want to live in and is close to amenities that are important to you, such as schools, shopping, and public transportation.
  • Consider the lot's proximity to major roads and highways, as well as the noise and traffic levels.
  • Research the area's zoning regulations to ensure that you can build the type of home you want.

Neighborhoods To Consider Moving To

Finding the right neighborhood is just as important as building the right home.

The neighborhood where the lot is located can have a big impact on your lifestyle, so consider neighborhood amenities, what you could possibly do for fun and, of course, your neighbors.

If there is a particular attribute you need from your new neighborhood, make that one of your top priorities while shopping for lots.

Consider Lot Conditions


  • Decide how much space you need for your home and yard. Consider the size of your family, your lifestyle, and your future needs. Do you need a lot of bedrooms and bathrooms? Do you want a large yard for entertaining or gardening?
  • Keep in mind that the cost of land increases with its size. Be realistic about your budget and choose a lot that is large enough to meet your needs without breaking the bank.
  • Consider the shape of the lot and how it will impact the design of your home. Some lots are long and narrow, while others are wide and shallow. The shape of the lot will affect the layout of your home and the amount of usable space you have.

Soil Conditions

  • Have the soil tested to ensure that it is suitable for building a home. The soil should be able to support the weight of your home and should not be prone to erosion or flooding.
  • The soil test will also reveal the type of foundation that is needed for your home. Some types of soil require special foundations, such as pier and beam foundations or slab foundations.
  • If the soil conditions are not ideal, you may need to make special arrangements for foundation and drainage. This can add to the cost of building your home, so it is important to factor this into your budget.


  • Check to see if the lot has access to public water and sewer lines. If not, you will need to install a well and septic system, which can add to the cost of building your home.
  • Find out if there are any easements or restrictions on the lot that could affect your ability to build or use the land. For example, there may be an easement that gives a utility company the right to access the property to maintain its lines.


  • Have a builder or architect review the lot to determine if it is suitable for building a home. The builder or architect can assess the soil conditions, slope, and other factors to determine if the lot is buildable.
  • They can also help you to design a home that is appropriate for the lot and your budget.

Zoning Ordinance and Land Use Restrictions

When purchasing a lot to build on, the last thing that you want is to purchase it only to find out that the single family zoning laws and/or land ordinances restrict you from building the home you’ve anticipated building.

Luckily, all of the zoning and land restriction information is public record and your agent should be able to help you find that information before contracting a vacant lot.

Do your due diligence and research not only the lot you’re looking at purchasing but research the neighboring lots as well. Determine if the restrictions of lots could deter your interest.

Private or Public Utilities

When determining a viable lot, consider how the utilities will be pulled into that lot.

It can be much more difficult if the lot is in a rural area. Rural areas often don’t have access to city water nor city sewer.

Well and septic will need to be identified, tested, and budgeted before going under contract.

Soil quality and soil stability could impact the possibility (if any) on installing a septic tank.

If within the city lines but there are no public utilities nearby, the costs of pulling those utilities to the lot vs.

installing a septic system (and digging for water) needs to be analyzed before contracting for a lot.


Each of these will breakdown the guidelines regarding utility services in these counties.

Options for a Construction to Perm Loan

Just like with buying a house, when building a home, it is ideal to start researching mortgage options early.

What is a Construction to perm loan? Construction-to-Permanent financing is a type of mortgage loan which allows the borrower to build or renovate the home.

When the construction process is completed and a CO (certificate of occupancy) is issued, the loan automatically rolls over into a traditional mortgage without having to complete another closing.

The borrower only has to pay for one set of closing costs. It can be easier to secure a construction to perm loan for partially developed land with utilities in place, but there are other loan options available for unimproved lots also.

Final Thoughts from Tim

Finding the perfect lot for your dream home can be a challenge, but it is definitely possible. By following the tips outlined in this article, you can increase your chances of success.

In addition to the tips above, I would also recommend considering the following:

  • Consider buying land with a view. This can add value to your home and make it more enjoyable to live in.
  • Consider the area's amenities. Shopping areas, parks, trails and other natural amenities can make your neighborhood more livable and enhance your quality of life.
  • Be patient. Finding the right lot can take time. Don't rush into a purchase until you find a lot that meets your needs and budget.

And remember, if you are considering building a custom home, it is important to work with a qualified real estate agent.

A good agent can help you find the perfect lot, negotiate the best price, and guide you through the construction process.

By following these tips, you can increase your chances of finding the perfect lot and building the home of your dreams.

Do you need a Realtor when building a custom home?

It is almost impossible on your own determining what to know when buying land to build on.

Regardless if you’re purchasing a resale property or if your house will be a new construction, working with one of our agents will simplify the process and reduce a lot of potential headache.

If you are ready to start your journey to building your dream home, I encourage you to contact us today.

As a qualified real estate agent with extensive experience in the Raleigh-Durham area, I can help you find the perfect lot, negotiate the best price, and guide you through the construction process.

Tim M. Clarke

About the author

17 years as a Realtor in the Research Triangle, Tim seeks to transform the Raleigh-Durham real estate scene through a progressive, people-centered approach prioritizing trust & transparency.

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