Many people purchase vacant lots to have a home built to their plans and specifications.  If you are looking for a vacant lot to build a home, several precautions must be taken.


Can you afford to purchase a vacant lot and build a home?  Building a home on a vacant lot has many expenses.  On top of permit fees and the costs of building the home, insurance costs, bank fees, and professional fees must also be taken into consideration.  Your lending institution can advise you of the different types of loans or mortgages that are available and of the maximum amount that you may borrow.

Precautions when Purchasing a Vacant Lot

When purchasing a vacant lot, the following precautions should be taken:

  • Determine the boundaries of the lot so there are no title and boundary disputes.
  • Determine what type of development is planned for the area.  The development may be planned for residential use, commercial use, industrial use, agricultural use, or some combination of uses.  Also determine what facilities and amenities are planned for the area such as schools, parks, shopping centers, etc.
  • Determine the zoning, planning, and land use requirements for the lot.  This information can be obtained from the local zoning board.
  • Determine what building permits are necessary to build the residential home and whether any of the necessary permits have already been obtained.  This information can be obtained from the local zoning board.
  • Determine if the property has marketable title.  Look for any easements, covenants, or any other encumbrances on the lot that may affect your future use of the lot.
  • Has a percolation test been done for the sewage disposal system?  The percolation test checks for any drainage issues.  Drainage issues can greatly increase the cost of building your home.
  • Determine the composition of the soil.  The composition of the soil determines what type of foundation is necessary for the home.  Certain soil classifications require extra foundations that can be very expensive.
  • Determine whether access to the lot is via a paved road, a dirt road, or if other accommodations must be made.
  • Determine what utilities will service the lot.  Will water, gas, electric, telephone, etc. services be available on the property. If water service is not available, can a well be dug?
  • Determine whether an environmental survey has been done. The environmental survey can determine if hazardous waste has been dumped on the property or if other environmental law matters are present.

Do I Need a Lawyer to Purchase a Vacant Lot to Build a Residential Home?

There are many steps and a lot of information involved in purchasing a vacant lot to build a residential home.  A real estate attorney can guide you through the process and help you negotiate a price and contract terms that are right for you.  A real estate attorney will also review listing agreements with brokers, offers and counter-offers, and purchase contracts before you sign them to make certain that your requests are met.  Furthermore, a real estate attorney can advise you on the financing the vacant lot as well as financing of the costs associated with building your dream home.