Buying land feels different from buying a house. There’s no staging, no granite countertops to admire, and often no clear indication of whether what you’re looking at is actually buildable. For first-time land buyers, the process can feel overwhelming—and expensive mistakes are easier to make.
If you’re considering purchasing land, whether for building your dream home, investment, or recreation, this roadmap will guide you through each critical step from initial search to final settlement.
A note about this guide: This article provides a high-level overview of the land buying process to help you understand what’s involved and plan your approach. Future posts will dive deeper into specific topics like financing options, due diligence investigations, and navigating local regulations in detail.
Phase 1: Defining Your Land Buying Goals (Before You Start Looking)
Clarify your Purpose
Before you start browsing listings, get crystal clear on why you’re buying land. If you’re planning to build a home, consider whether you need to start construction immediately or if you can wait for the right opportunity. Think about what size home you’re planning and any specific site requirements like views, privacy, or accessibility needs.
For those considering land as an investment, ask yourself whether you’re looking for appreciation potential or active development opportunities. Your timeline for holding the property and your experience with land development regulations will influence what type of properties make sense.
If recreational use is your goal—whether camping, hunting, farming, or conservation—consider how often you’ll visit the property and whether you need immediate access or can improve it over time. Your purpose drives every other decision, from location to budget to the type of property that makes sense.
Set a Realistic Budget
Land buying involves more than just the purchase price. The down payment for land loans typically ranges from 20-50%, and you’ll need to factor in closing costs of 1-3% of the purchase price. Due diligence expenses can add another $5,000-$15,000 or more depending on the property’s complexity.
If you’re planning to build, development costs become a major consideration. Site preparation and utilities, well and septic systems (if not on public utilities), driveway and access roads, plus permits and impact fees can add up quickly.
Don’t forget ongoing carrying costs like property taxes, insurance, loan payments, and maintenance. The key is to budget conservatively—land development almost always costs more and takes longer than initial estimates.
Phase 2: The Property Search Strategy
Know What to Look For
Not all land listings are created equal. Here’s how to quickly identify promising properties:
Essential Information
- Exact acreage and property boundaries
- Zoning classification and permitted uses
- Utility availability (water, sewer, electric, gas)
- Road access type (public road vs. private vs. easement)
- Any known restrictions or easements
Pro Tip: Legal descriptions sometimes contain references to easements that may not be obvious from the listing description. Don’t skip reading the full legal description if it’s provided.
Watch out for these Listing Issues
Some listings present genuine red flags that suggest serious problems. An unusually low price compared to area comparables often indicates hidden issues, and multiple previous listing attempts may signal that other buyers have discovered deal-breaking problems during their due diligence.
However, other listing issues might simply reflect an agent’s limited knowledge rather than property problems. Vague descriptions like “great potential” or listings with no mention of utilities or access could indicate a lazy agent who hasn’t taken time to research the property properly. Similarly, “subject to” clauses without clear explanation might mean the agent doesn’t understand the restrictions rather than indicating major issues.
Sometimes properties with limited information in their listings can actually be good opportunities if you’re willing to do the research that others won’t. The key is learning to distinguish between red flags that indicate real problems and incomplete listings that just need more investigation.
Use Technology to Pre-Screen Properties
Before visiting any property, use these free online tools to eliminate obvious problems. Start by checking the U.S. Fish and Wildlife Service National Wetlands Inventory to see if the property contains protected wetlands that could limit development. Then use FEMA’s Flood Map Service Center to determine if the property sits in a flood zone, which affects both building restrictions and insurance requirements.
Google Earth and USGS topographic maps help you assess slope conditions, since steep terrain dramatically increases building costs. The USDA Web Soil Survey provides preliminary information about soil suitability for septic systems and building foundations.
It’s also good practice to read the zoning district regulations for your target area, then use your local jurisdiction’s online GIS mapping tool to measure road frontage and lot lines. This helps ensure the property meets minimum road frontage requirements and has sufficient room to meet setback requirements before you invest time in a site visit.
Location Factors That Affect Value
When evaluating locations, proximity to services matters significantly. Consider the distance to employment centers, access to medical care, shopping, and schools, plus emergency services response times. These factors affect both your quality of life and the property’s resale value.
Infrastructure considerations include road quality and who’s responsible for maintenance, utility availability and potential extension costs, plus internet and cell phone coverage—which has become increasingly important for remote work.
Think about future development in the area too. Planned road improvements or new developments can enhance property values, while certain zoning changes affecting neighboring properties might have the opposite effect. Population growth trends in the area provide insight into long-term appreciation potential.
Phase 3: Property Evaluation & Due Diligence
The Initial Site Visit
Your first visit should answer basic feasibility questions:
Access Assessment
- Can you physically reach the property?
- Is the access legal and permanent?
- Will you need to build or improve access roads?
Buildable Area Identification
- Where could structures realistically be placed?
- Are there obvious obstacles (wetlands, steep slopes, rocks)?
- Does the site offer the privacy, views, or features you want?
Neighborhood Context
- What are the surrounding properties like?
- Any activities or land uses that might affect your enjoyment?
- Signs of active development or decline in the area?
Critical Due Diligence Investigations
Once you’re serious about a property, these professional assessments are essential:
Boundary Survey
A licensed surveyor will mark the exact property boundaries and identify any encroachments or access issues. Cost: $800-$3,000 depending on property size and complexity.
Soil Evaluation
For properties requiring septic systems, a soil scientist evaluates whether the land can support wastewater treatment. This often determines whether you can build at all. Cost: $1,000-$2,500.
Title Search
A title company or attorney researches the property’s legal history to identify any liens, easements, or ownership issues. While this cost (approximately $200) is usually included in closing costs, it’s an essential expense you should budget for.
Zoning Verification
Confirm with local authorities that your intended use is permitted under current zoning. This should include checking for any overlay districts or special restrictions. It’s good practice to obtain a written zoning verification and/or lot validation letter from the governing jurisdiction. Some jurisdictions treat these as one document, while others issue separate letters—one confirming the zoning allows your intended use, and another confirming the lot is a legal buildable lot that meets all dimensional requirements.
Environmental Assessment
Depending on the property’s history and location, you may need to assess for environmental contamination, endangered species, or other protected resources. Keep in mind that these studies can add significant time and cost to the permitting process if issues are discovered.
Understanding Easements & Restrictions
Many land buyers overlook legal limitations that can significantly impact property use:
Common Types of Easements
- Utility easements (power lines, pipelines)
- Access easements (allowing neighbors to cross your property)
- Conservation easements (restricting development to protect natural resources)
Deed Restrictions
Some properties have private restrictions that limit:
- Types of structures you can build
- Commercial activities
- Livestock or pets
- Minimum house size or architectural standards
Homeowners Association Rules
Properties in subdivisions may be subject to HOA covenants that govern everything from building materials to landscaping requirements.
Phase 4: Financing Your Land Purchase
Understanding Loan Options
Land financing works differently from home mortgages, and the differences can be significant. Raw land loans typically require higher down payments of 25-50% and come with shorter terms of 5-10 years. Interest rates are generally higher than home mortgages, and lenders often require substantial cash reserves beyond your down payment.
Construction-to-permanent loans offer a different approach by financing both land purchase and home construction in one package. These convert to a traditional mortgage after completion, but they require detailed building plans and builder approval upfront. During construction, you’ll typically make interest-only payments.
Owner financing represents another option where the seller essentially acts as your bank. This can offer more flexible terms than conventional financing and is often used when traditional financing isn’t available, though it requires careful legal documentation to protect both parties.
Improving Your Approval Chances
Land lenders look for:
- Higher credit scores (typically 680+ minimum)
- Lower debt-to-income ratios
- Significant cash reserves beyond the down payment
- Detailed plans for the property’s use
- Experience with land development (for investment properties)
Phase 5: Making Your Offer
Structuring a Competitive Offer
Your offer should balance competitiveness with protection.
Price Strategy
Research recent comparable sales, but remember that land values can vary dramatically based on factors not visible in public records. It’s important to also look at new construction home values in the area and perform a residual land value analysis—working backward from finished home values to determine a maximum offer amount. This approach, combined with comparable land sales, should give you a good sense of the land’s realistic value range.
Earnest Money
Typically 1-3% of purchase price, held in escrow to demonstrate serious intent.
Contingencies for Protection
- Study Period: 30-45 days to complete due diligence (check with all subcontractors who will help with your due diligence to ensure you factor in enough time for them to complete their work)
- Financing: Approval for your loan (if not paying cash)
- Survey: Acceptable boundary verification
- Soil Testing: Adequate soil conditions for your intended use
Timeline Considerations
Land transactions typically take longer than home purchases:
- 45-60 days is common for straightforward transactions
- Allow extra time if extensive due diligence is needed
- Rural properties often face slower processing times
- Weather can delay soil testing and surveys
Phase 6: navigating the Settlement Process
Pre-Closing Preparation
In the weeks before closing:
- Finalize your financing
- Review all due diligence reports
- Confirm that any property issues have been resolved
- Arrange for property insurance
- Plan for immediate post-closing needs (security, utilities)
Closing Day
Land closings are typically simpler than home closings, but attention to detail remains important. Review all documents carefully and confirm that deed restrictions and easements are properly documented. Verify that utility accounts can be transferred to your name and understand your ongoing responsibilities like road maintenance and property taxes.
Make sure you have a clear understanding of access rights and any maintenance obligations that come with the property. If there are shared roads or other common areas, know what your responsibilities will be going forward.
Post-Closing Considerations
After you own the land:
- Secure the property (gates, signs, cameras if needed)
- Establish relationships with local contractors for future development
- Begin any required maintenance (brush clearing, road repair)
- Start planning your development timeline if building
Common Land Buying Mistakes to Avoid
Skipping Due Diligence
The biggest mistake is assuming land is buildable without proper investigation. Soil problems, wetlands, or zoning issues can make property worthless for your intended use.
Underestimating Development Costs
Site preparation, utility connections, and access roads often cost much more than buyers expect. Get detailed estimates before committing.
Ignoring Access Rights
Just because you can see the property doesn’t mean you have legal access to it. Verify access rights early in your evaluation.
Buying without Professional Help
Land transactions involve complexities that most buyers encounter rarely. Consider working with:
- Real estate agents experienced in land sales
- Land-specific attorneys
- Qualified surveyors and soil scientists
Rushing the Process
Land deals rarely have the urgency of home purchases. Take time to thoroughly investigate before committing.
When to Walk Away
Some situations should prompt you to reconsider:
- Soil conditions that won’t support your intended use
- Access issues that can’t be resolved reasonably
- Environmental problems requiring expensive remediation
- Zoning restrictions that prevent your planned activities
- Development costs that exceed your budget significantly
Your Path Forward
Buying land successfully requires patience, thorough investigation, and realistic expectations. While the process involves more complexity than buying an existing home, the reward can be a property perfectly suited to your vision and needs.
The key is taking each step methodically, investing in proper due diligence, and working with experienced professionals who understand land transactions.
Remember: every piece of land is unique, and what works in one location may not apply in another. Local knowledge, whether from agents, attorneys, or other professionals, is invaluable.
Take your time, do your homework, and don’t hesitate to walk away if something doesn’t feel right. The right property will be worth the wait.
