Save up to $750 per month on ready to move in homes - Click here for our exclusive mortgage incentives

The process of building your home on your lot begins with the land you love. If you are looking to buy land in your dream location, it’s a good idea to work with a professional to review the lot for some common things you may overlook that could cause costly issues as you start building your new home. Some of the most common considerations that quickly add to the cost of your land include:

Need for additional fill and/or dirt removal
Many uncompleted lots never had the mass earthwork (the very large scale excavation done by the developer) completed. In some cases, this means dirt stockpiles on your lot and/or not enough dirt on your lot. If the lot is too low or high, or is missing the required topsoil, thousands could be added to your future costs (ultimately make the lost more expensive than its offer price). We have seen lots require over 15 loads of dirt hauled in, and at $150 – $400 per load, this can certainly add up!

Utility connections
Sometimes, utility connections are not available or damaged, and many local policies require the lot owner to fix, repair or extend these utility connections in order to build the home. In some cases, these can be as little as $200 to straighten your water shutoff valve, but the cost can quickly build into the high thousands to extend water mains and other services to your lot.

Kitchen with a text overlay that reads "They built a custom home on our lot and the entire process exceeded our expectations. From, Jackie and Paul"

Unknown impact fees or improvement guarantees
Many cities over the last few years have required additional impact fees to cover the cost of improvements that were never completed. Fees such as bonds, road improvements or a share of the stoplight that was never installed at the subdivision entrance could become an added expense to your lot. Some of these fees are spread out over multiple lots and are for something small such as the cost of sidewalks or the installation of two stop lights. However, it could also be something more substantial that could add thousands to your lot price. We had a past client ask us to review the lot they were interested in purchasing, during the review process we discovered an added $12,000 due to impact fees, making the lot that appeared to be a great deal a lot more expensive than what the person was expecting.

Soil conditions
Many developers consider the ramifications from an ethical standpoint that drives them to deliver sturdy, buildable lots to buyers. Unfortunately, there are some who have taken shortcuts in the past, adding fill or putting lots in areas of farmland that did not have soil conducive for building. Bad soil doesn’t mean a house can’t be built on the lot, but it does mean your builder could dig the hole for your foundation, and find an expensive soil test is required to confirm its sustainability.

While there are other examples of hidden or surprise costs, these are a few of the most common ones we have seen. This doesn’t mean the lot isn’t a good deal, but when making your purchase it’s important to be aware of all the additional costs, which a builder could estimate for you. When building your new home, you will certainly be investing quite a bit of your hard-earned savings into building the home of your dreams and building on the land you love, and land that has been verified by a builder is a great way to start the process of building on your lot.

If you are considering buying a lot to build on now or in the future, please contact us for a thorough review of the lot to help you think about potential hidden costs. Reviewing the lot in the beginning allows you to feel confident as you make an offer on a piece of land for your new home.