Location, location, location. Those are the three magic words of real estate. If you’re planning to build a new home, choosing a location and buying a lot are integral steps in the process.

In terms of building, a lot is simply the piece of property where you plan to construct your home. While selecting a lot may seem like it would be fairly straightforward, it can actually be quite complicated. Before purchasing a piece of property, it’s important to take your time and carefully evaluate your options.

Finding a Location for Your New Home

Choosing a location for a new home involves more than finding a large lot with nice views. While aesthetics and size are certainly important considerations, you also need to take a number of practical issues into account.

One of the most important things to consider is how the lot will affect your overall construction costs. Depending on the location, you may need to budget for a septic system, well construction or adding an access road. And if your lot is in a remote location or in a wooded area, you may end up paying a lot more for construction due to added costs for transportation of materials or tree removal.

When you find a lot you like, make sure you do research before making a purchase. Look at factors such as soil type, drainage and depth of the water table. All of these will affect your ability to build a home on a particular lot, and how much it will cost. You may also want to look into whether there are any potential environmental hazards on or near the property.

Before Buying a Lot

Before you sign on the dotted line for a piece of property, make sure you consider the following:

• Access: If the lot is not directly accessible by a public road, make sure you understand how private road maintenance is handled, and check to see that your purchase includes a deeded right-of-way, which ensures that you’ll be able to legally access the property.
• Amenities: How close is your lot to amenities that are important to you, such as schools, parks and shopping? A home in a prime location may also command a greater price if you ever decide to sell.
• Budget: How much can you afford to spend? Be sure to consider “hidden” expenses. Adding a septic system, for example, can cost tens of thousands of dollars.
• Utilities: Does the property have connections to sewer systems, water, and electric systems? If not, you will have to include the cost of adding these connections in your overall budget. Also, be sure to look into cell phone reception, access to Internet connections and phone service.
• Zoning and Restrictions: Is the property zoned for residential development? Are any zoning changes or major construction projects pending? In addition, check for any other restrictions regarding what can be built on the property, such as secondary structures.