Reality Check: The Pricey Truth Behind Buying Land for Your Dream Home

So you want to buy land and build a home? You know, here's the number one thing that I hear from people when we're dealing with a tight inventory market, like we are now. And that is this, they say, Gosh, I can't find what I want. And everything is so expensive. So here's what they come to as a natural conclusion. They say, well, I'll just buy some land and build and surely it will be cheaper. 

Well, friends, here's the deal. That's not always true. And here's why. It takes more money to buy land.

Typically, it's 20% to 30% down, we're not having a three to 5% down conversation. Now, one of the things that's interesting in the market of this moment, is that private capital or seller financing, financing for land is sometimes a better option. Then you got to take into account feasibility. This costs money, we got to take into account things like location influences. Is there water nearby? Is there slope? If we're in Washington, what about hydronic soils? And then when we need a water source? Is there public water in the street? Or do we need a well, I've seen people spend up to $90,000 on a well, what about sewer septic septic systems seven to $45,000. There's a cost to bring in power, electricity, cable or fiber for an internet connection. And even sometimes, overlooked costs are things such as a driveway and access to the property. There's also your dirt work and land preparation costs, and your cost to build. Now this is often addressed with a construction loan, which is something we'll talk ab out again in the future.

I hope this information is helpful to you. And as always, if there's anything we can answer for you in regards to real estate, we'd love to be your number one go to source to help you out.