Thinking about buying a new house or possibly buying land so you can commence building a house to your specifications? Here’s what you need to know.
There is a lot to take into consideration deciding between purchasing a pre-existing home or buying land to build a home on. You need to think about the location of where you would like your new home to be, the size of the home and the lot it sits on, how much it will cost, what details of the home matter to you.
The same goes for selling land or your home. In this blog post, we outline points to think about when finding the best solution for you.
Should You Buy a Home or Land to Build On?
Making the decision between buying a pre-existing home or land to build a home on can be difficult. From deciding where you want to live to determining the size of your new house, a lot goes into the details of your new home sweet home.
We’ve put together some things to keep in mind when determining if purchasing a home or land is better for you. We’ve also included information that could be helpful if you are selling property or pre-existing home. Read on for more details.
Location, Location, Location
The location of your new home may be one of the most important factors that play into finding the right home for you. You’ll need to assess the neighborhood and community surrounding the area, and the amount of acreage that you would like to have.
Location Impacts Price
The location also plays a significant factor in the price of the lot or home you will be purchasing as well.
For instance, the cost of land in King County can be significantly higher than land near the Tri-Cities. If you are looking to build a vacation home, the cost of waterfront property could vary from land located in a forest area.
Before closing on a home you will most likely have the home inspected to make sure everything is working properly and is up to code, so think twice before buying in an old neighborhood.
Deciding to purchase land to build on or a pre-existing home
When buying land to build your own home, you may have more freedom when choosing a location than purchasing a pre-existing home because you will have to choose a home from where houses are already built.
However, if you are looking for a home in a more urban environment, finding an empty lot to build on may not be an option. When purchasing land to build a home on, make sure you do your homework before you buy.
Considerations when buying land and building a house
Purchasing land takes some more attention.
Survey the Land
First, you will want to have the land surveyed for any potential risk. Then you will want to make sure you know about any environmental restrictions, zoning guidelines, and permitting necessary for when you start to build your home. You don’t want to end up with a piece of land that you aren’t able to build on.
When buying land, you have to think about utilities and accessibility. You will need to make sure that your lot will be easy to get to or that you may have to build the infrastructure to do so. And you will most likely have to have utilities run out to the property, which means you will begin paying utilities before your monthly usage bills. Obviously, purchasing a home that has already been built wouldn’t require such measures.
Sellers should consult their real estate agent for advice
If you are selling land or a pre-existing home, the information above will be helpful for you too. Potential buyers will be assessing the location of the land or home and making sure it fits into their lifestyle.
If you are selling land it would be helpful to the buyer if you knew the kind of soil, any environmental restrictions, zoning guidelines, or permitting needed. And if home values have increased since you purchased the land or home you will most likely be able to sell the home or land for more than you paid for it.
With both options of purchasing a pre-existing home or land, keep in mind the value of the homes in the surrounding neighborhood and what the resale value may be. If you ever plan to sell, purchasing something that doesn’t seem like it would increase in value may not be a good return on your investment.
Size of the Lot
Whether you are purchasing or selling a pre-existing home or land to build on, the size of the lot compared to the price may vary. The larger the lot doesn’t exactly mean the home value is going to be higher or more acreage doesn’t exactly mean a higher lot price.
The price of the lot often comes from its usability. For instance, there may be a lot that is 5 acres, but 3 of those acres are a wooded area so you or the buyer are only able to use the remaining 2 acres. Or maybe the home that you are selling or interested in purchasing sits on a lot that is two acres, but a half-acre is a steep slope so that area isn’t usable unless the land is leveled out after the purchase.
Another factor that plays into the cost of land or a home is the level of privacy that the lot provides. For example, if a lot is 3 acres, but is next to a busy street, it may be priced less than a lot that is two acres that is tucked away from any traffic. These are useful examples to keep in mind when you are selling or purchasing land or an existing home.
When You Can Move in or Out
If you’re debating whether to purchase land to build on or to buy a pre-existing home you may want to take into account your timeline of when you would like to be living in your home.
Existing Homes Are Available Immediately
Purchasing a home that is already built would allow you to move in within 30 – 45 days after closing.
Buying Land Means Your Home Won’t Be Ready For Months
Buying land with the intention of building a home on it will mean a longer timeline before the home and land are livable. You will need to take into account the time for permitting and design of the home and construction before you are able to move in.
If you are selling land, timing isn’t exactly something that you need to worry about. If you are selling a home, you will most likely have a date when you will need to be moved out or negotiate a date with the buyer.
The cost of a home or land in Washington state
When purchasing an already existing home you have a better idea of what to expect as far as the cost goes. You will negotiate with the seller or pay the asking price and after the home inspection, you will be aware of any repairs that need to be made and their costs. Purchasing land and completing the construction of a home have a lot of variables that play into the cost that can make the price hard to estimate at times.
Cost of Labor
Besides the cost of the land, you will need to factor in the cost of the labor of the people designing and building the home for you and the quality of materials that are being used. With a house, it is likely that you will spend less money and time. Planning and managing the construction process can be a stressful endeavor.
If you are selling a home, you may want to complete some basic repairs to make sure everything in the house is in working order. For instance, checking to make sure all pipes and plumbing are working or that there are no holes in the roof. These repairs could help you maximize the price that you receive for the home.
When it comes to selling land, the buyer may ask you to make changes, however, this is negotiable and varies from sale to sale.
Figuring Out the Details of a Home or Land in Washington
When you are buying a home, what you see is what you get. And you can upgrade or change rooms and appliances as you wish. When it comes to building your own home you get choose every detail and create your dream home from the ground up, which makes it feel like your own from the get-go.
You get to choose everything, from the size and number of stories and rooms down to interior details. Once your new home is complete you can also rest easy knowing that since everything in your home is new, you most likely won’t have to replace anything any time soon, unlike moving into an existing home.
While preparing to sell your home, focus on making the home repairs that will be included in the home inspection and make sure everything is in working order. Making a huge home improvement like completely remodeling your kitchen isn’t always necessary if you are not going to be able to make up for the cost in the home sale price.
Speaking with a real estate agent about what repairs are valuable can be super helpful with narrowing down your list of to-do before selling.
Why Choose Sammamish Mortgage?
At Sammamish Mortgage, our loan officers can help you figure out of buying a house or buying land and building is the right choice for you.
Sammamish Mortgage has been in business since 1992, and has assisted many homebuyers in the Pacific Northwest. If you are looking for mortgage financing in Washington State, we can help you get preapproved. Sammamish Mortgage offers mortgage programs in Colorado, Idaho, Oregon, and Washington.
Contact a loan officer if you have any mortgage-related questions or concerns. If you are ready to move forward, you can view rates, obtain a customized instant rate quote, or apply instantly directly from our website.