Looking to purchase a home is a major life decision we make based on many varying factors. Buying land in order to build that home, on the other hand, is something entirely different. While we also must consider the many factors that come with purchasing land, there are a few hidden elements that you and your family should be aware of – elements that a realtor can easily educate you on in order to make the entire process a seamless one.
It’s not uncommon for first-time buyers of land to think that, once bought, you can start to build whenever you’d like to or feel ready to. Unfortunately, that’s not always the case. According to Your Mortgage Options, “if you’re buying a property to build something on, you have to make sure that the bylaws that regulate the property allow the use. Bylaws regulate everything from the percentage of the lot that can be covered by buildings to where you can place your septic system. And just because a neighbour has built a certain style or size of house, that doesn’t mean you can, too”. Realtors are great at knowing the ins and outs of most (if not, all) neighbourhoods. Therefore, they’ll assist you in guiding you through the above mentioned bylaws, as well as any permits regarding what can and cannot be done when it comes to building off your newly purchased land.
Moreover, building requires considerable capital. Most banks will approve you for 50% of the land value, however, “because there is no existing structure on the land, qualifying for a mortgage becomes much more difficult [and] interest rates will always be much higher” . Yet, when you approach a builder upon buying the land, they’ll often buy your land as a part of their set building fee, creating an alternate type of sale, and eliminating the 50% down that you’d otherwise be expected to pay. This is why it’s practical to have a realtor in your corner representing you, offering you the protection that you deserve.