Buying A Lot to Build On in NC

When you are considering a new home purchase in NC, the first thing most of us want to know is WHERE to build your new home!  There are several different types of lots available.  You could be buying a lot to build on in NC from a family member.  This is perfectly OK, and we just have to make sure that all of the local and state requirements for “access” are met.  For instance, in most cases, the State requires that you have a road right of way all the say to a State maintained road.

Additionally, you could be buying a lot to build on in NC that is one of the last few lots available for building in a built out, or older subdivision.  While those lots might be desirable, because they are situation within a mature, established neighborhood – they are often the most challenging to build on, because they often have ravines, or require other areas that require “engineering” to make them “build-able” lots.  The cost for doing all of that construction on the LOT itself will need to considered in the cost of the home, and the footprint of the home you are building.

There are larger tracts of land that you could be buying a lot to build on in NC that are in the early phases of being a neighborhood.  These are pretty easy to spot in outlying, more rural areas around Raleigh, Wilmington, Charlotte and Greensboro.  Some of these tracts are also becoming available in the Asheville mountains, and in the areas around Greenville NC and Swansboro.

Buying a Lot to Build On in NC

Prospective home buyers often want o purchase a lot, and make improvements to the land, while they are deciding exactly what they want to build.  “At least I can be clearing some of it.”  That is fine, as long as you are buying the lot out right.  If you are buying a lot to build on in NC, and you need to finance that in with the purchase price, then you can do NO clearing, etc prior to closing on the loan.

It can cost as much to have stumps removed later as it does to have the entire trees tipped and removed now. And you need to be careful about how much you clear and follow government guidelines about the septic field and the setbacks required.  Until you know exactly where the home is going to sit, it doesn’t make sense in most cases to begin clearing.  It’s always a better strategy to discuss your plans for clearing with your builder before you get started.

Who will help with determining where to put the house:

• The builders we work with* help you determine ballpark site work allowances
• The builder will help you with house placement
• Let you know if you’ll need a walk-out basement or tall foundation – this is especially true in Eastern NC for flood plains, in the mountains where rocks might need to blasted for footings.

(* Builders are required to be approved by the bank even if you’ve already decided this is the company you want to use to build your new home)

Questions about Buying a Lot to Build on in NC / Builder Answers

Can the builder help with getting an Improvement Permit for the septic and/or well?
Yes, we strongly recommend that this be completed as part of your due diligence in your purchase of your lot.  If the land doesn’t “perk” you could be facing another huge expense.

Can the lot be used as a down payment for the home?  Yes, we offer that as part of the purchase.  If you do not own the lot,  you will need to make a cash down payment on the total package between 5 and 10% (based upon the total sales price and your credit and reserve that you will have after closing).

Where’s the best place to put my house on the lot, and why?  Several factors need to be considered in the location of your home. Well and septic placement, setbacks, easements, topography and covenants all come into play. This is what our lot assessment is all about – the fit of your home to your lot – within the parameters of what can be done.

Top Questions to Ask when Researching “On Your Lot Home Builders”:

Building a new custom home can be easier than you think.  There are beautiful home sites – or “lots” available in new home neighborhoods and just outside of communities all over North Carolina.

Question 1: How much should I pay for a Lot?

How much should I pay for a lot to build on in NC?

This is an impossible question when we are talking about the whole state – because what you will be paying for a lot you can build a custom home on in Tarboro, and a lot for a custom home in Raleigh – are two completely different things.  In general, the price of the lot is going to be 30 to 35% of the whole value of your home.

Yes, the price you pay has a lot to do with location – but size, amenities and build-ability are also important considerations. If you choose a lot that does not offer an easy way to put in a side load garage, and you really want a home with a side garage – maybe you need a little larger lot? The Custom home builder you decide to work with can offer guidance, but it’s really all about what’s important to you.

IN GENERAL, if you are in a metropolitan area of NC, however, the bank wants you to choose a home site that has less than 10 acres, and we want a total home value that makes the land worth less than 30% and in some cases we might go to 35%.  So, in this example, your structure will be 2500 square feet at a cost of build of $120 a foot.  That is a cost of the home of $300,000.  If the lot you purchase to build your home on is $100,000, that makes the total purchase price of $400,000.  And the cost of the land would be 25% of that total cost (did the numbers so I could do them in my head).  This would be perfect.

The Triangle area of North Carolina – consistently ranks as the “best place to live” on national surveys, and it has been growing for several years. We have looked at several studies done near the end of 2017 that ranked the “Best Suburbs For First Time Home Owners Near Raleigh,” and while we think most of them are spot on, we disagree with a few.  If you are considering a move to the area, you might like to get a perspective from folks who live here, so we created our own list of great places for first time home buyers to live near Raleigh.

Question 2: How To Calculate the Whole Budget to build a new home

When building a custom home on your lot, we need to look at a few things.  One, we need to look at the overall size and the type of “finishes” you are looking for.  Do you want granite through out, are you looking at concrete counter tops?  These things affect the budget of your home.  Many homes in Johnston County (for instance) have an unfinished bonus room.  So, the actual cost of the home itself is something you will determine with your builder – but knowing what kinds of things you want in your home is really important.

Obviously we are also looking at he overall cost of the land, and the improvements to the land as part of your budget.  Are you going to have a long gravel driveway, or are you putting in a road, or a concrete pad?  Do you need to hook up to city water and sewer, or will there be a cost associated with installing your own sewer and well system?  Again, these are things that the Builder will help you determine.

LASTLY, there needs to be a plan for cost over runs. You are probably better than I am at this… but if you take me to Lowe’s, or to a Lighting Store, I’m probably going to pick out something a bit more expensive than “standard grade.”  It’s just who I am.  I’m going to go a little over on flooring, on the microwave or the hood fan in the kitchen – there are sooooo many places where I could easily go over budget.  I have to have Nest, I have to have some “smart outlets” those things add up.

When you are buying a lot to build on in NC, these things must be considered!  We are going to base the loan on the final contract that you enter into with the builder, prior to construction starting.  So let me say this again… if you start construction in March and your contract with the builder, including the lot, is for $300,000… and then in June, as you get further along, you want a bigger pendant in a bathroom that costs $300 more – you have to pay the $300 out of pocket.

We can not add “over runs” into the cost of building the home.