Buying land and building a house gives you the ultimate flexibility: you can design your dream home, choose your lot, and build around your lifestyle. But this path is more complicated — and expensive — than buying an existing home. Financing, zoning, and utilities can quickly get overwhelming without a roadmap.
This guide walks you through how to buy land and build a house, step by step, from choosing the right plot to financing construction and finally moving into your one-of-a-kind home.
1. Find land for sale
Start with land-specific search tools
Most home-buying websites let you search for building lots, but you should also check out listing services specializing in vacant land. Some of our top picks include:
These sites let you filter by zoning, acreage, price, and property type.
Work with a real estate agent
An agent experienced in land sales can:
- Identify off-market listings
- Explain local zoning restrictions
- Connect you with soil testers, surveyors, and lenders
A local real estate agent can send you automatic alerts when the right property hits the multiple listing service (MLS). Seek real estate agents specializing in new home construction and land deals.
Martin Boonzaayer, CEO of The Trusted Home Buyer, says, “When you're looking for land to build your dream home, a real estate agent specializing in land can be a game-changer.” Real estate agents specializing in land deals often have access to off-market listings and have knowledge of local zoning restrictions that will determine what and where you can build.
When looking for an agent, ask about their experience with land transactions and local building requirements. Boonzaayer says that “A good real estate agent is like your guide through this maze—they bring expertise, connections, and peace of mind to ensure you make the best decision for your future home.”
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2. Check if you can build on the land
See if there are any zoning restrictions
Visit your local planning or zoning office or search online maps to confirm:
- If there are HOA or historic district limitations
- The land is zoned for residential use
- Any restrictions on building type, height, size, or multiple structures
- Whether mobile or manufactured homes are allowed
Find out if there are existing utilities or if you'll need to add them
Ask if the land has access to:
- Water (public supply or private well)
- Sewer or septic
- Electricity
- Natural gas or propane
If not, installing these could add thousands to your project. Contact the local utility office and planning department to determine what’s available and who services the area.
Boonzaayer says, “Your agent can help you determine if the land has access to water, sewer, electricity, and gas. This is crucial because it affects what you can do with the land. If services aren't readily available, they can advise on alternatives like wells or septic systems.”
Hire professionals to inspect the land
When buying land, you should hire the following professionals to ensure a smooth transaction:
- Surveyor: To map your land and check for potential issues, like boundary disputes. A survey is essential for knowing exactly what land you’re buying and avoiding unwanted surprises.
- Appraiser: To determine the value of your land by comparing it to similar properties in the area. An appraisal is necessary for getting a mortgage and ensuring you don’t overpay on your purchase.
- Environmental consultant: Perform environmental due diligence, checking for contamination risks, soil quality, and protected areas like wetlands. This is necessary to ensure that your land is suitable for building and can help you avoid liability issues.
Most mortgage lenders require a land survey, appraisal, and environmental due diligence when purchasing land. Even if you’re not applying for a mortgage, you’ll still need at least a survey of the land to comply with local and state laws before building.
These professionals also protect you even if they’re not strictly required by your lender or local government.
Consider whether the location aligns with your lifestyle
When considering lots to buy, you’ll want to ensure that the location and available services align with your desired lifestyle.
- Privacy and noise: If you’re looking for a private and quiet spot, a rural property will be ideal, although that may mean you'll have to pay extra for utility hookups.
- Home-based businesses and farms: Builders who plan to run a home-based business or farm should check that local ordinances and (if applicable) HOA rules permit them.
- Future changes: If you’re planning on having a growing family or simply just expanding your house in the future, a lot with extra land will be suitable. However, check to find out if any local zoning laws restrict how big your house can grow to or whether you’re allowed a maximum number of structures.
- Proximity to amenities: Rural living can be idyllic, but be prepared to sacrifice proximity to schools, hospitals, highways, and other amenities.
3. Understand financing options
When you buy land to build a house, the financing process is different from buying a traditional home — especially if the land is completely undeveloped and lacking any utilities. Your loan options will depend on the land’s condition, your timeline, and your credit profile.
Here are some of your financing options:
New construction loan
A new construction loan allows you to finance both your land purchase and the cost of building your home. These loans often convert to permanent mortgages once the construction is complete.
The main benefit to a construction loan is that your lender will likely require a smaller down payment than if you were financing the lot and construction separately. Lenders generally require 10-20% down on construction loans. Some banks and credit unions offer even lower minimum down payments if you're willing to pay a higher interest rate.
However, lenders typically have strict requirements for new construction loans. To qualify, you'll need excellent credit, a low debt-to-income (DTI) ratio, and detailed architectural plans.
Lot land loan
If you don't qualify for a construction loan or don't have a firm building timeline, you may have to finance your land purchase and construction separately. Lot land loans allow you to finance land that is already prepared for residential development.
In general, a building lot qualifies for a lot land loan if it has the following in place:
- Appropriate zoning
- Building permit (if required by lender)
- Access to a public road
- Utilities nearby (including sewer access or on-site septic system)
Down payments for lot land loans are usually similar to new construction loans, so you can expect to put 10-20% down.
Raw land loan
If your desired building lot doesn't qualify for a lot land loan, you may need to pursue a raw land loan.
Land loans can be extremely challenging to obtain, as lenders consider them risky.
When underwriting raw land loans, lenders often require down payments as large as 50%, and they usually charge higher interest rates than other loans.
Seller financing
Vacant land is often offered with the option of seller financing. Owner financing is arranged between the seller and the buyer directly. This can be useful for buyers who find it challenging to finance their land purchase with a traditional lender.
4. Understand zoning
When purchasing an existing home, you can be reasonably confident that it was already zoned for a residential building. This isn't necessarily true when buying land to build a house, so finding out what you can do with the property before you go under contract is essential.
Research the land and conduct your due diligence, such as going to the county planning office and asking them directly if there are any building restrictions. If you aren't sure what questions to ask, contact an experienced real estate agent knowledgeable about vacant land.
Other factors to consider are whether the land's soil prevents the safe construction of a home or the digging of a well. Sometimes, environmental problems crop up that make building an impossibility.
You should also consider whether the land is classed as wetlands because the regulations on this type of property can be severe. Laws differ between the city, county, state, and federal level. It is crucial that you try to find local wetland inventory maps, as these can help you locate problem areas.
5. Evaluate utility access and costs
Utilities such as water, electricity, and natural gas are necessary for residential properties and are usually managed by the county. If you would prefer a more rural setting for your land build, you will have to find out whether existing utilities are in place.
When there are no utilities, calculate the additional expense of installing a well and septic system and running electrical lines.
If you're not sure the extent of the work that may need to be done, consult an experienced real estate professional who can help you find local contractors and source quotes. You may need to alter your purchasing budget depending on the quotes you receive.
6. Get quotes and choose the right builder
Building a custom home takes time — and the right team. Start by researching local builders with experience in new construction on raw or vacant land.
Ask each builder:
- Are you licensed and insured?
- Can I see completed homes or client references?
- How do you handle permitting and inspections?
- What is your projected timeline and cost range?
Also consider resale. Features that seem perfect for your lifestyle may make it harder to sell in the future. A local real estate agent can advise on what adds value in your market — and what’s considered overbuilt.
Consulting a local property expert can also help you avoid pitfalls such as an "overbuilt" house that you will have trouble recouping your investment from at a later date.
» MORE: Connect with an agent with experience in custom-built homes
7. Understand the homebuilding timeline
To give you a clearer picture on what to expect when building your dream home, here is a general timeline of how your home will come together.
Here are the steps to building a home, week-by-week:
Keep in mind: weather delays, change orders, and labor shortages can extend the timeline. The clearer you are upfront with your builder, the smoother the process will go.
📅 Before you build
Before a shovel even touches the ground, thoroughly prepare a building plan. This is also the point where your vision comes to terms with your budget. In this stage, you'll work with architects, designers, contractors, tradesmen, real estate agents, lenders, engineers, and inspectors to create the home you've always envisioned but can also afford.
Once you move ahead with the build, know that changing your mind about designs, materials, and floorplans will be more difficult, costly, and time-consuming. Also, be certain about your wants and needs ahead of time so there's clear communication with everyone on the same page.
🏗️ Week 1: Site excavation and leveling
Once you've received financing through a lender, scouted and purchased a plot of land with your real estate agent, planned the home, and received permits, you're ready to begin building your dream home.
During the first week of construction, a crew will come in to prepare the lot for your foundation. This includes leveling the ground, removing any large boulders, creating erosion barriers, and excavating a space if your home design has a basement or crawl space.
This phase also includes placing the footers, or concrete bases, that will support your home's foundation.
🧱 Weeks 2 to 3: Foundation work
Once your footers are in place and have passed inspection, foundation work can begin. The workers will pour the concrete slab, providing a sturdy base for your home.
🚪 Weeks 4 to 6: Framing
As workers move into the framing stage, you'll see your home take shape. Framing is like building the skeleton of your home — you'll see the floor plan, different levels, and cut-outs for doors and windows develop.
At this point, exterior walls and your roof will also be completed, along with sheathing to protect your home from the elements as construction continues. You should also expect another inspector visit to ensure the framing passes code.
🛠️ Weeks 7 to 8: Mechanicals
While this step may not be as dramatic as putting up the walls and roof of your home, installing the mechanicals will allow you to go to the bathroom inside rather than in an outhouse in your yard. The mechanicals include plumbing, electrical systems, your heating and cooling units, as well as wiring your home for a security system if you choose to have one.
Once the mechanicals are installed, you'll have running water, working outlets, and enough wiring for light fixtures and appliances. Because insulation typically covers up wiring, an inspector will generally give the go-ahead on your electrical systems before adding insulation.
🧰 Weeks 9 to 10: Insulation and drywall
Next comes the insulation and drywall. Your contractor will install the insulation first to help maintain a comfortable temperature and provide some soundproofing.
Then, the drywall will go up in the interior, be sanded and primed, and possibly even get a first coat of paint. By the end of this step, your house will look like a home.
👷 Weeks 11 to 12: Flooring and painting
Your design and vision will begin to manifest at this point in the construction process. The floors and cabinets you carefully and specially picked will be installed, along with any built-in shelves and interior doors. Plus, all your walls will be given a coat of paint.
During this time, the crew will finish the exterior walls, such as adding brick, stucco, or siding. You'll also see work on your driveway, walkways, and landscaping.
🛁 Week 13: Adding appliances and fixtures
The countdown to your home's completion has begun. You'll see a lot of activity throughout the week as plumbers, electricians, and subcontractors install your sinks, faucets, countertops, appliances (such as your refrigerator, washer and dryer, and stove), light fixtures, outlet covers, and more.
Your HVAC system and electricity will be turned on to ensure proper operation. You'll also see drastic changes to the outside of your home as workers put the finishing touches on the exterior and landscaping.
🏡 Weeks 14 to 15: Final touches
You're almost ready to move in. The only thing left is final inspections where the inspector ensures everything is up to code and meets proper safety requirements, but you'll also do a final walk-through inspection, taking note of any issues or minor changes you'd like to have done.
Once everything looks good and meets the inspector's and your standards, you can close on your home, move in your belongings, and revel that you're now living in your ultimate dream home.
Ready to find land and build your dream home?
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And, if your purchase qualifies, you could get a cash-back refund when you close on your new property!
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FAQ
How much does it cost to buy land and build a house?
The average cost to buy land and build a house is $665,298 (or $251 per square foot), according to a 2024 survey conducted by the National Association of Home Builders (NAHB). Your actual costs will depend on factors like the price of your building lot, your new home's size, and the cost of building materials in your area. Buying land to build a house? Learn how to get a cash-back refund when you close!
What are the steps?
The major steps to buying land and building a house include finding land for sale, arranging financing, understanding zoning restrictions, determining whether your lot is suitable for building, evaluating the cost of adding utilities, and getting quotes from local home builders. Ready to get started? Find the best websites for buying land.
What’s the difference between raw land and a buildable lot?
- Raw land: No utilities, road access, or prep — cheapest but hardest to finance.
- Buildable lot: Zoned residential, cleared, and may have some utility hookups — more expensive but easier to build on.
Can I use a VA or FHA loan to build?
Yes, but options are limited. VA construction loans are rare. FHA’s construction-to-permanent program may be available but has strict requirements. Most borrowers use private lenders or get a lot loan and refinance later. Learn more about getting pre-approved for a home loan.
How much down payment do you need?
Down payment requirements depend on your loan type and lender. On a new construction loan, you may be able to find lenders that require down payments of 10% or less. But, if you're purchasing raw land to build on later, your lender may require a down payment as high as 50%.
Do I need insurance while building?
Yes. Most lenders and contractors require a builder’s risk policy to protect against fire, theft, or weather damage during construction.
