How to Buy Residential Lots and Land

residential lots and land
The first rule for buying a residential lot relies on its location.. © Big Stock Photo

Before building a home, first you need to locate the residential lot or land acreage on which you will build your dream home. Remember the adage of real estate when choosing the lot for your home, location, location, location. On top of this, we've put together a list of essential things you should consider about any piece of land you are thinking about buying.

12 Essential Things to Consider Before Buying a Residential Lot or Land

1) Before you jump into buying land, find out if city or community water and sewer connections are available on the lot or land.

2) If sewer hookups are not available, make your offer to buy land contingent on the ability to install a septic system rated for the number of bedrooms you require.

3) Find out if other home buying contract contingencies are advisable for land purchases. For instance, in some areas water rights do not convey with land -- and that means you could not dig a well.

4) Make sure electricity and phone service are available at the property. Check cable service if that is a priority.

4) If the land you wish to buy is not accessible by a public road, verify that a road maintenance agreement is in place. This document states that everyone on the road agrees to help with its upkeep.

6) There should be a deeded right-of-way in place for land not accessible by a public road. The deed should give you and future owners the legal right to access the land, known as an easement.

7) Check the property's deed restrictions to make sure the type of residence you plan to build is allowed.

For instance, some areas do not allow manufactured housing.

8) If the lot is in a development, ask for a copy of the restrictive covenants. That's where you'll find restrictions for minimum house size, whether other structures are allowed, and other limitations.

9) Ask the city or county if zoning changes are anticipated for the area, or if there's a plan to build new roads or widen existing roads.

10) If there are environmental hazards on the land, such as old buried oil or gas tanks, decide if you are willing to remove them, or if you will ask the seller to take care of removal and cleanup.

11) Decide if you want a new boundary survey. Surveys are standard in some areas, but rarely required in others. They're nearly always a good idea.

12) If you plan to build a home soon, talk to lenders now about construction loans.


More Tips About Residential Lots and Land:


  • Don't be turned off by the terms 'development,' and 'subdivision.' If you're from a city, you might associate both words with small lots and side-by-side homes. In rural areas, a subdivision lot might be 10+ acres in size.
  • Restrictive covenants help protect home values by requiring structures to conform to specific standards. Read them carefully so you know exactly what is and is not allowed.
  • Study the deed to discover if other persons or tracts of land have been granted easements to use your land in any way.

Selecting an Agent to Help You Buy a Residential Lot

It comes as a surprise to some home buyers that not every real estate agent possesses any knowledge whatsoever about buying a residential lot or land.

Land is a specialty practice. Don't make the mistake of plucking an obscure agent out of the blue and believing a residential resale agent can help you buy land, just because the agent has a real estate license.

From filling out the purchase contract correctly to negotiating specialty clauses to finding a construction lender, an agent with a fair amount of residential land closings will be an invaluable resource over your typical resale agent. You deserve a land specialist.

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