How To Buy Land To Build Your Dream House On

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Maybe you’ve always dreamed of building your own home. Or maybe you’re frustrated by a lack of inventory in your local housing market and are considering building a house from scratch. You’re certainly not alone — more than 1.3 million building permits for new-construction residences were issued in May of 2025, according to data from the U.S. Census Bureau and U.S. Department of Housing and Urban Development.

Plenty of people are approaching real estate with a simple philosophy: If you can’t find someplace you love to move into, find somewhere you love and build what you want. But how do you go about finding, and buying, that somewhere? Here’s everything you need to know about buying land to build a house on.

What to consider before buying land to build a house

It’s important to take your lifestyle into account when you’re buying land. After all, this lot will be the main basis of your home — and will represent a big chunk of your total expenses, typically 25 to 35 percent of your final home value. Here are some crucial factors to consider before you make an offer:

• Zoning: You can’t build your dream home on land that isn’t zoned for residential use. Some land may have complicated legal protections in place as well. A local real estate agent can help you understand the zoning in your area and make sure you’re not wasting time looking at land that can’t be used for your purposes. If possible, it’s also helpful to work with an architect who can create a 3D model of what your dream house will look like on the lot, so you can visualize the impact of the zoning and land-use regulations.
• Size: Be sure to look for the right dimensions for your needs. If you have a large family, for example, or want plenty of space to host guests or entertain, you will want a large lot. Even if you plan to build a smaller home, you may want an expansive lawn and garden — especially if you enjoy spending time outdoors. However, a large lot can come with additional expenses, like landscaping and watering, which could eat up a lot of your budget.
• Privacy: Another key consideration when buying land is the level of privacy you want. If you don’t want to be seen by neighbors or passersby, you’ll want to look for a property that’s secluded, away from busy roads and foot traffic. Natural barriers, like trees and bushes, are useful in providing privacy as well. If you’re looking at a property with a stream or pond on it, be sure to check into any possible regulations, whether it is in a conservation or watershed area, and whether it is prone to flooding.
• Utilities: If the lot you’re looking at is in a fairly populated region — or part of a new development or master-planned community — it will likely already have access to the necessary utility services. In rural areas, though, you may need to have electricity, water and sewage lines (or a septic tank) hooked up to the property. The cost of connecting to utility services can be substantial, and in some cases, you may not be able to finalize the sale until the water and electric companies have completed their work.
• Accessibility: A plot of land you love won’t do you any good if it’s unreachable. Land purchases most often take place outside a city, which can mean long drives and rural roads. Consider how you’ll be accessing the property and whether it requires building an access road or a driveway, which can be a significant expense — especially if it requires an easement. Don’t forget to factor in gas costs and commute times, as well.
• Ecology: Anytime you want to build on a property, it’s important to consider potential environmental concerns. Some land, particularly in rural areas, might have conservation requirements that limit what may be built there. You may want to have the soil tested and water table checked as well, as both affect whether the land is appropriate for building. In addition, there may be limitations on building based on the slope of the property, or on tree removal and/or replacement (especially in heavily wooded areas). Consider hiring an experienced property surveyor to investigate the land rights and restrictions with respect to natural resources.

Financing a land purchase

Lenders often charge more to finance vacant land than they would to finance a home — it’s riskier, since more can go wrong. So if you are able to, the best way to buy land is probably paying cash.

Barring that, of course, there are many different ways to finance a land purchase. One of the most common is through local banks or credit unions, which know the area well and may be more likely to offer local land loans than large national institutions would be. If the home you plan to build will be your primary residence and you’re looking in a fairly rural area, you may be eligible for a government-sponsored USDA loan.

As with any home financing, you’ll want to shop around for the best rates and get preapproved before making any offers. Look into construction-to-permanent loan options, too, which allow you to convert the loan into a traditional mortgage when the home is completed — reducing the need for two sets of closing costs and simplifying the process.

How to find the right lot

Finding the right piece of land to build a home on is a challenging task. How do you find a lot that’s in a good location and that fits your budget? Simply driving around looking for signs, or searching online for “land for sale,” can sometimes be effective (and fun, too). And if you’re interested in a new-build development, plots of land may come part-and-parcel with a home purchase. But if you’re looking for raw land to build on from scratch, the best way is to work with a real estate agent who specializes in land sales.

The Realtors Land Institute is a good place to start — the organization’s website offers listings as well as a search tool that can help you find an accredited land expert in your area. You can also look for local agents with the letters ALC after their name, which means they have earned the Accredited Land Consultant designation. Make sure any expert you work with knows what your must-haves are in terms of location and scope of building — especially if it requires finding something specific, like a water or mountain view. (When buying for a view, ask your agent to investigate whether there’s any future development planned that might block it.)

Other options include buying a teardown house for the land, or looking for homes on very large lots that could be subdivided and contacting the owners to see if they are interested in selling you a part of their land.

Getting your land ready to build on

In most places, you’ll need to get a building permit or permission from the city or county in order to build on the land you buy. Find out whether this will be the case for your property, and make sure that the permit is in place before you begin.

Before you plot the blueprints of your new home, you will have to first clear the land of any natural obstacles that could interfere with construction. A professional tree service can remove trees and brush — they should know the local regulations to do so — especially if they are too big or too close to where the house will be built.

You’ll also need to eliminate any potential hazards, like wires or pipes. Enlist the help of local utility companies to ensure that you don’t damage any existing infrastructure while you are clearing the land, as you will likely be liable for the damage if you do. Get the property insured for liability as soon as you are in contract.

Depending on the size of your property, you may also want to have it surveyed to determine the boundaries of your property lines. The cost to have a survey performed will vary by location and the size of the property, but marking the legal boundaries of your new property now can save you considerable grief in the future. Surveyors may also work with your builders to make sure the land is properly leveled before building can begin.

Bottom line

As with just about any real estate purchase, it’s critical to do your research before you buy land to build a house on. Home construction comes with its own set of headaches — and expenses — so making sure the land is in order first gives you a great head start. Working with a pro who can lead you through the process, including potentially complex permitting and zoning issues, is also essential.