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Top Tips and Considerations For Buying Land

By Bill Gassett | February 19, 2024

Buying land represents a pivotal investment in one's future. Unlike purchasing a ready-made home, it offers the flexibility to design and build according to personal or business needs.

However, the process involves intricate steps, from understanding zoning laws to securing financing and conducting due diligence.

Each stage demands careful consideration to avoid common pitfalls and ensure the land meets your long-term objectives. This guide will navigate you through these complexities. I aim to provide practical advice on making informed decisions throughout the land-buying journey.

Are you looking to buy acreage or just a house-building lot? Are you looking for privacy, or does living in a neighborhood sound pleasing? These are essential questions to answer first.

Understanding how big an acre is will be a good start for what you need for land.

Being a real estate agent for the last thirty-eight years, I have had numerous experiences selling land. I have sold small building lots to large parcels of land. I have helped developers build and sell entire subdivisions from the ground up.

There is a significant amount to know before purchasing land. Careful due diligence is necessary to ensure you don't make any significant mistakes. Ask several vital questions before moving forward.

Let's dig into what you should know.

Tips for Buying Land

Initial Considerations Before Buying Land

The priority when buying land is ensuring it is buildable. After that, it is all about ensuring no adverse circumstances impede what you want to do or your enjoyment of the property.

Zoning Laws

Before you buy land, understand the local zoning laws. Zoning determines land use, such as residential, commercial, or agricultural. It impacts building types, sizes, and purposes.

Research the zoning regulations through the local planning department. This ensures your land use aligns with your goals.

If your project doesn't fit the current zoning, you might need to apply for a rezoning or variance, which can be time-consuming and uncertain.

When researching a property for your dream home, studying the road and sideline setback restrictions is essential. For example, if you have a large house, you must ensure enough room for the home and a garage.

Can you imagine buying a lot only to discover it has crept too close to the neighboring lot line? That would not be pleasant.

Environmental Concerns

Environmental assessments are crucial. They identify issues like soil contamination or protected habitats. Hire an environmental assessment firm to evaluate the land.

This step is vital to avoid future legal and financial problems. Contaminated land, for example, could require expensive cleanup. Also, check for flood risks and water rights.

Understanding these factors is essential for a safe and compliant project. Conversation restrictions are commonplace with land. Ensure you ask for any "orders of conditions." This will outline what you have to do to comply with local regulations.

For example, it is common for conservation boards to ask builders to put up siltation fences during construction.

Access to Utilities and Roadways

Evaluate the land's accessibility. Does it have direct access to public roads, or do you need an easement through neighboring properties? Access affects both usability and value.

Similarly, assess the availability of utilities: water, electricity, sewage, and internet. Lack of access to utilities can significantly increase development costs.

Contact local utility companies and the Department of Transportation to gather this information.

These initial considerations lay the foundation for a successful land purchase. They help identify potential issues early, guiding your decision-making process.

Understand Septic Systems if Applicable

In my area of Massachusetts, many properties don't have access to public sewers. Instead, you must install a septic system. In these instances, you must ensure the local health board authorizes an approved septic system design.

Without this, there isn't a way to determine if the property will be cheap or expensive. Technically, you also do not have a buildable lot without an approved design.

Remember that having a septic system requires regular maintenance. You will need to pump the septic tank every three to five years.

Finding an excellent septic system installation company will be prudent if everything checks out.

Maximum Real Estate Exposure is an excellent resource on everything you should know about septic systems. They have numerous articles on septic maintenance.

Does The Land Have Public Water or a Well?

Another essential consideration is finding out the water service for the lot. Is there public or private water? If you need a well, you must test it to ensure property quality and quantity.

You'll want to have a good drinking source with no dangerous contaminants. Having plenty of water will also be a plus. I highly recommend you have a minimum of five gallons per minute from the wall.

This will ensure adequate water for daily tasks around your new home.

Next, we'll explore financing options and the specifics of land loans, a critical step in acquiring land.

Conducting Due Diligence

Part of the land-buying process we have discussed will include focused due diligence and research. Plan on doing the following:

Environmental Testing

Environmental testing is vital. It identifies potential pollutants or ecological concerns on the property. Hire a qualified environmental consultant to test soil contamination, water quality, and protected species.

These tests can prevent future legal and financial headaches, ensuring the land is safe for your intended use.

Surveying the Land

Property surveying confirms the land's boundaries and topography. Understanding the property's layout, identifying easements, and ensuring compliance with local regulations is crucial.

A professional land surveyor will provide a detailed map, highlighting any discrepancies with existing records. This step prevents disputes with neighbors and clarifies what you're buying.

Local Area Assessment

Assess the local area's amenities and potential future developments. Consider schools, hospitals, shopping, and transportation. Future developments can affect land value and quality of life.

Visit the local planning office to review upcoming projects. Understanding the area's growth trends helps make an informed purchase.

Conducting thorough due diligence is the cornerstone of a successful land purchase. It ensures the property meets your needs and is free of hidden problems. You will want to discover any red flags before buying, not after.

Brian Davis, a real estate investor and owner of Spark Rental, weighed in with the following advice.

Before buying any land, ensure you’re clear on your plan. That could include personal use, but if you’re buying it as an investment, get clear on your exit and marketing strategies.

If you plan to flip the parcel, what’s its ideal use, and who do you need to tailor your marketing to sell it quickly? For example, if the land is ideally suited for camping, hunting, and other outdoor recreation, how will you market it specifically to local outdoors enthusiasts?

When I invested in land, I made the fastest and highest profit on parcels. I knew exactly what they’d be used for and by whom, and I targeted those people in my marketing. The parcels that dragged my portfolio down were the ones where I just thought “Oh that’s great discount for this piece of property, I know I’m buying it with equity, I’ll just list it for full market value and see who comes along.”

Finally, we'll discuss overcoming potential challenges encountered during the land-buying process.

Overcoming Potential Challenges

Dealing with Zoning Laws

Zoning laws can be restrictive. If the land doesn't meet your intended use, investigate the process for obtaining variances or rezoning.

Engage with local planning departments early. Present a clear, well-thought-out plan for your project. Community support can be crucial, so consider the impact on neighbors and the environment.

Financing Hurdles

Financing land can be tricky. If traditional loans are unattainable, explore alternatives like seller financing, personal loans, or partnering with investors.

Prepare a comprehensive financial plan to show lenders or partners the viability of your project. Demonstrating the potential for return on investment can help secure the necessary funds.

We will discuss your financing options shortly.

Access Issues

Ensure legal access to your land. If access is through another property, secure an easement. Without guaranteed access, you could face legal battles or have unusable land.

Work with a real estate attorney to negotiate easements and understand your rights. Similarly, for utilities, if the land lacks access, investigate the cost and feasibility of installation before purchasing.

The real estate attorney you are using should conduct a title search to ensure no liens against the property.

Understanding Land Loans and Financing Options

Types of Land Loans

Land loans differ from traditional home mortgages. There are mainly three types: raw land loans, unimproved land loans, and improved land loans.

Raw land loans are for undeveloped land without utilities or roads. These are the hardest to secure due to higher lender risk. Unimproved land loans cover land that may have some utilities but still lacks significant improvements.

Improved land loans are the easiest to obtain for land ready to build on, with access to roads and utilities.

Do You Need a Land or Construction Loan?

One crucial consideration in financing your project is timing. If you plan to build immediately, you'll want to utilize a construction loan.

Construction loans allow you to finance the purchase of the land and the cost of building all in one loan. On the other hand, if you don't plan on constructing your home right away, a traditional land loan will work better.

I have built two personal residences from the group up. Construction loans are an excellent way to finance your building project. Plan on the lender asking for construction drawings and detailed building specifications.

Financing Challenges

Securing financing for land can be challenging. Lenders see land loans as risky, often requiring higher down payments and interest rates.

Prepare for this by improving your credit score and having a solid plan for the land's use. A clear, viable plan can make lenders more comfortable and improve loan terms.

Comparing Lenders

Shop around for lenders. Banks, credit unions, and specialized lending companies offer land loans. Compare their terms, interest rates, and down payment requirements.

One of the best tips when building a new house is to consider local lenders familiar with the area. They might be more inclined to finance your purchase. Don't overlook seller financing as an option, which can offer more flexible terms.

In my experience, credit unions and small local banks are the best lenders for construction and land loans. They know the local building industry better than larger financial institutions.

Understanding your financing options and preparing accordingly is critical to a smooth land purchase process. Next, we'll delve into making an offer and closing the deal. We will highlight negotiation strategies.

The Process of Making an Offer and Closing the Deal

Making an Offer

Once you find the suitable land, prepare to make an offer. Start by determining the land's value. Look at comparable sales in the area. Using a real estate agent with some land purchase experience is highly advisable.

Land sales are far more complex than buying a home. As you can see from the information presented, there is much more to understand. If you have an agent who doesn't know what they're doing, it could spell trouble.

Consider the land's characteristics, zoning, and potential for development. Your offer should reflect both the current value and future potential.

Include contingencies in your offer for financing, environmental assessments, and survey results. This protects you if something goes wrong.

Negotiation Tips

Negotiation is an art. Be ready to compromise, but know your limits. Understand the seller's motivations. They might be willing to lower the price for a quick sale or offer better terms for financing.

Use the land's drawbacks, like limited access to utilities or zoning restrictions, as negotiation points. Stay respectful and professional throughout the process. Ask questions about anything you're unsure about. Don't make hasty decisions.

Closing the Deal

Closing involves finalizing the sale and transferring ownership. It requires a title search to ensure no outstanding liens or disputes.

You'll also need title insurance to protect against future claims. Closing costs include loan origination fees, title searches, and legal fees.

Review all closing documents carefully. Once everything is in order, sign the documents, pay the seller, and the land is yours.


Buying land is a complex process filled with potential pitfalls. However, you can navigate these challenges successfully with careful planning, thorough due diligence, and strategic negotiation.

Remember, purchasing land is not just buying a piece of earth. It's investing in your future. Take the time to understand each step, consult professionals, and make informed decisions.

Bill Gassett is an authority in the real estate industry with 38 years of experience. Bill is well respected for his informative articles for buyers, sellers, and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, the National Association of Realtors, Inman News, Newsbreak, Credit Sesame, Realty Biz News, and his own authoritative resource, Maximum Real Estate Exposure. He has been on of the top RE/MAX agents in New England over the last two decades.
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