Buying land can be an exciting opportunity to bring your vision to life, whether you’re planning to build a custom home in Austin, TX, or invest in land in Atlanta, GA. Unlike purchasing a home, buying land comes with unique considerations, from zoning laws to environmental assessments. It’s not as straightforward as touring properties and securing a mortgage—buying land requires a deeper dive into local regulations, financing options, and development possibilities. This Redfin guide will walk you through how to buy land, offering a comprehensive list of questions to ensure you’re prepared for every step, no matter where your search takes you.
Key takeaways
- Financing is more complex: Lenders require larger down payments, shorter loan terms, and different loans based on land type when buying land.
- Budget beyond the purchase price: Include costs for permits, utilities, and surveys.
- Research zoning and regulations: Ensure the land meets your intended use.
- Conduct due diligence: Perform surveys, inspections, and environmental assessments before closing.
Here’s how to buy land in 9 easy-to-follow steps:
1. Define your goals for the land
Before you start searching for land for sale, it’s essential to clarify your goals. What you plan to do with the land will shape every decision you make, from location to financing. Are you looking for a plot to build your dream home, somewhere to live in your RV, start a farm, or secure a long-term investment? Each use comes with specific considerations, for example:
- Residential use: If you’re planning to build a home, look for land in areas with suitable zoning, access to utilities, and proximity to schools, work, or amenities. Consider factors like soil quality for building foundations and any neighborhood restrictions. For example, a peaceful rural property might offer space and privacy but could lack city utilities.
- Agricultural use: For farming or livestock, research soil fertility, water rights, and local climate conditions. You’ll also need to understand zoning laws and agricultural tax incentives/implications.
- Long-term investment: Investors often prioritize location and future growth potential. Look for areas with planned infrastructure improvements or growing industries that could increase land value over time.
2. Review your budget and explore financing options
Deciding how to finance your land purchase is key. While some buyers pay in cash, this isn’t always feasible, especially for higher-priced plots. If a loan is needed, be aware that land loans are harder to secure than traditional mortgages since lenders view them as riskier. To offset this risk, they often require larger down payments (sometimes up to 50%) and higher interest rates.
Types of land loans:
- Raw land loans: For undeveloped land with no utilities or infrastructure, expect higher interest rates and stricter terms. Lenders may also require detailed plans for how you intend to use the property.
- Unimproved land loans: For land that may have minor features like utilities nearby but not yet on-site, terms can vary. These loans fall between raw and improved land loans in terms of cost and difficulty to secure.
- Improved land loans: If the land has already seen some development (like utility hookups or road access) financing is generally easier and comes with better terms.
Key financing considerations
- Budget for a larger down payment: Be prepared to invest more upfront, especially for raw land.
- Be transparent with your intentions: Lenders often want to see clear plans for the land’s use before offering financing.
- Explore local lenders: Smaller banks and credit unions familiar with the area may be more willing to work with land buyers.
- Evaluate alternative financing: Owner financing can be a flexible option if a traditional loan isn’t available, though it may come with shorter terms and higher interest rates.
Financing land can feel daunting, but understanding your options and preparing for higher upfront costs will ensure you’re financially ready to move forward with your land purchase.
3. Find a real estate agent with land expertise
Working with a real estate agent who specializes in land sales can make a significant difference in the buying process. Your agent will help you navigate the unique aspects of purchasing land, such as zoning laws, land valuation, and local market conditions. They can help you find properties that align with your goals, navigate legal complexities, and negotiate better terms. A skilled agent will also connect you with trusted professionals, such as surveyors and inspectors, ensuring you make a well-informed purchase.
4. Research zoning and land use restrictions
A critical step in buying land is understanding the zoning laws and land use restrictions that apply to the property. These can vary widely by location and directly impact how you can use and develop the land.
Start by confirming the land’s zoning. If it’s zoned residential, you’re likely in the clear for building a home. However, if it’s zoned for commercial or agricultural use, changing the zoning can be expensive and time-consuming. In areas with planned development, like commercial projects, it may be harder to get approval for residential construction. Always check with the county zoning office to understand restrictions and feasibility.
“Just because you have zoning doesn’t mean you have an approved project, or a project that can be completed in the near future,” says Tyler Davis, accredited land consultant and president of Saunders Real Estate. “Just because you have utilities at the site doesn’t mean there is utility availability and capacity.” He recommends getting to know local officials and planning staff early in the due diligence process, noting that understanding whether a project will be supported by the local municipality is often just as important as reviewing due diligence materials.
Beyond zoning, look into additional restrictions like easements, environmental protections, and HOA rules. For example, a conservation easement may prevent certain types of development, or deed restrictions could limit building styles or prohibit commercial use.
Key questions to ask:
- How is the property zoned? Ensure it matches your intended use, or research rezoning options.
- Are there deed restrictions? These can limit home types, land use, or architectural styles.
- Does the property have road access? Rural properties may require an easement for entry.
- Are utility hookups available? If not, factor in installation costs for water, electricity, and sewer.
- What are the water rights? If drilling a well, confirm legal access to groundwater.
5. Choose the right property and consider factors like location, buildability, climate concerns
Location and surroundings
Look at what’s around the property. If it’s near a noisy highway, a power plant, or a landfill, these factors could affect the land’s value and your future quality of life. Conversely, if it’s close to desirable amenities or future development, it could increase the property’s potential value.
Buildability
Look beyond zoning laws and evaluate the land’s topography and environmental conditions.
- Soil type: Rocky soil or marshy areas can complicate excavation and building.
- Terrain: Steep slopes may increase construction costs.
- Wooded areas: Check for tree removal restrictions.
- Marshy areas: Additional permits or remediation may be needed.
Infrastructure and utilities
Does the property have access to essential utilities like water, electricity, and sewage systems? If not, you’ll need to determine whether you can easily bring these services to the land. The cost of installing utilities can be significant, especially if the land is located far from existing infrastructure.
Environmental protections/concerns
Is the property located near protected wetlands, endangered wildlife habitats, or other environmental hazards? If so, you may face restrictions on what you can build or do with the land. Research local environmental regulations to make sure your project isn’t hindered by environmental protections.
Climate risks
Consider climate risks like flooding, wildfires, or hurricanes, which can impact the land’s viability. Research flood zones, fire-prone areas, and storm risks to understand any building requirements or additional insurance costs. If you proceed with buying land in a high-risk area, plan for extra precautions, such as fire-resistant materials or creating defensible space in wildfire-prone zones.
Building setbacks
When researching how to buy land, you’ll want to learn about setback ordinances, which are property laws governing property lines and boundaries. A setback is the required distance from the property line for any structures. Smaller lots may limit the size of your build, depending on setback rules.
6. Apply for a land loan
Now that you’ve identified the type of land you want to buy, you can determine the right loan for your property, whether it’s raw, unimproved, or improved land. This is when you’ll formally apply for the loan, keeping in mind that raw or undeveloped land often comes with higher interest rates and larger down payments. Work with lenders who specialize in land financing to help you navigate the process and secure the best terms.
7. Submit your offer
Once you’ve selected the land and arranged financing, it’s time to submit your offer. Include contingencies in your offer to protect yourself, such as financing approval, zoning verification, and a satisfactory title search. Having contingencies ensures you’re not fully committed until certain conditions are met, reducing your risk during the purchase process.
8. Conduct thorough due diligence with surveys, inspections, etc.
Before finalizing your purchase, verify that the land meets your expectations and is free of hidden issues. A property survey confirms exact boundaries, while a soil or percolation test is essential if you plan to build or install a septic system. An environmental survey can help identify potential hazards like contamination or protected wildlife. Additionally, review public records to check for easements or liens that could affect your plans. This step ensures the land is buildable, legally sound, and aligned with your long-term goals.
“The biggest mistake buyers make when purchasing land is skipping aspects of due diligence because of the cost,” says Tyler Davis, president of Saunders Real Estate. “Buying land isn’t like buying other types of real estate. Sometimes the most costly things on a piece of land are things you can’t see, including soil conditions, water table issues, environmental problems, easement locations, and zoning restrictions. Each of these steps costs significant money. However, by not performing them, buyers expose themselves to major problems as they look to enjoy, recreate, harvest, or develop a piece of property.”
Davis explains that the due diligence required depends on the property’s location and intended use. While most purchases require a survey, not all surveys are the same. “There is a major difference between a boundary survey and an ALTA survey,” he says. “For all development projects, we strongly recommend an ALTA survey, which shows the locations of easements. This can have a major impact on development feasibility.” Additional due diligence may include a Phase I environmental assessment, soil, geotechnical, or percolation analysis, wetland delineation and mitigation studies, ecological assessments, timber cruises, concept or site plans, and traffic studies, depending on the property and intended use.
9. Close on the sale of the property
Once the terms are finalized, you’ll review and sign the necessary paperwork, including the purchase agreement and any loan documents. You’ll also pay closing costs, which may include title fees, taxes, and other charges. The title company will then transfer ownership and ensure all legal requirements are met. Once the process is complete, you’ll receive the deed, officially making the land yours.
Additional costs to consider when buying land
As you research how to buy land, you’ve likely realized there are more costs to plan for than just the purchase price. These costs can vary depending on the location, land type, and your future plans for the property. Here are some key expenses to budget for:
- Closing costs: Like any real estate transaction, buying land involves closing costs. These can include title insurance, recording fees, and attorney or escrow fees. Closing costs typically range from 2% to 5% of the land’s purchase price.
- Land survey: If the property boundaries are unclear, a land survey is essential. This ensures you know exactly what you’re purchasing and can help avoid future disputes. The cost of a survey can vary, but typically ranges from $300 to $1,000.
- Land clearing and preparation: If you plan to build a house on the land, you may need to clear trees, shrubs, or other obstacles. This can be a significant expense, especially if the property is heavily wooded or has uneven terrain. Costs will depend on the land’s condition, but clearing could cost several thousand dollars.
- Utilities and infrastructure: Many undeveloped properties lack essential utilities like water, electricity, or sewage systems. Connecting to these services can be expensive, especially in rural or remote areas. You may also need to install a septic system or well, which can add thousands of dollars to your budget.
- Property taxes: Landowners are responsible for paying property taxes, even if they are not developing the land right away, which vary by location. While land taxes tend to be lower than those for homes, they’re still an ongoing cost you should plan for. Make sure to check the current property tax rates before buying.
- Insurance: Depending on your land’s location and use, you may need property insurance. For instance, if you plan to build, you might want coverage for potential damages or liability. This could be an added cost, especially if the land is in a high-risk area for natural disasters.
- Permits and fees: If you plan to build, subdivide, or make significant changes to the land, you’ll likely need permits from local authorities. These permits often come with application fees and may require inspections, adding to your total expenses.
How to find land for sale
Finding land for sale involves some research and knowing where to look. Start by browsing online platforms like Redfin – just select “land” from the “home type” dropdown. Specialized websites like LandWatch or LandSearch also list available parcels, offering a great starting point. A real estate agent who specializes in land sales can be an invaluable resource, helping you identify properties that match your criteria and guiding you through the buying process.
Additionally, explore property auctions or local classifieds for hidden opportunities. Networking with local builders, contractors, or even neighbors in your desired area might reveal land that’s not widely advertised. Be sure to conduct thorough research to ensure the land meets your needs and comes with a clear title.
Is buying land a good investment?
Buying land can be a smart investment, especially if you’re building a home, as it may be more affordable than purchasing a new build. It also gives you control over design and materials. However, buying land solely for appreciation is riskier due to zoning, accessibility, and environmental factors. If considering raw land, assess its development potential to ensure it fits your long-term goals. Thorough research is key.
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