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How to choose the right land to build your custom home

Updated: Apr 12, 2022

Because of the current state of the real estate market, many people are opting to buy a piece of land and develop it rather than fight for the small, overpriced and often trashed scraps left on the market. While this can often be a good way to get the home you desire within your budget, it is certainly no small task. Building a custom home takes a lot of patience, planning and coordination. As home builders, we often get calls from potential clients who are seeking guidance on choosing the right lot to build their dream home on. This article will guide you and educate you on the many factors to consider when choosing the perfect piece of paradise to build your dream home on. Picking the right piece of real estate can often be the difference between getting everything you want and being stuck in a complex logistical/financial nightmare.


Obviously you want to build in a location that has large sweeping views of the mountains, but picking the right location is about far more than just that.


Did you know that there are over 271 active incorporated municipalities throughout Colorado and that each one may have different requirements that vary in expense and complexity to both develop and build your home? That's right! One size does not fit all. This alone could be the difference between a new build being feasible or not. This is why it's so important to coordinate with a contractor, like Blue Horse Construction, that is familiar with the requirements and laws of various municipalities before you just go and buy the first lot that you like.


Is the lot in an area that is easily accessible and relatively close to large suppliers and vendors? This could make a big difference in how much it costs and how long it takes to get materials to your lot while the home is being built.


Over 50% of communities in the United States have some sort of HOA. While this isn't always an issue, being in an HOA area could definitely be the make or break. Some HOAs are insanely stringent on what you can build, how you build it and even when you build it. Make sure you do your homework on the local HOA before you make the decision to buy a lot.


Maybe you really want to build a three story house with a rooftop deck. It just happens to be that the zoning regulations on this particular lot prevent you from building a house over thirty feet in height. This is just one small example of the type of zoning restriction you can run into. This is another reason to coordinate with an expert familiar with these types of rules.

Extra Fees-

You found some land that you really like and it is perfectly within your budget. Did you check with the city & county about other fees associated with building on that lot? As an example, in Castle Rock, CO you could find yourself spending an extra 50k just to get permission to build on that lot (aka:impact fees). Furthermore, it could cost you another 50k just to tie into existing utilities (aka: tap fees). Say goodbye to your budget!


The lot itself plays a major role in the feasibility of your upcoming dream project.


Encumbrances such as easements on the lot could qualify or disqualify the land depending on how it restricts your ability to build. Sometimes it is possible to get special permissions to bypass certain encumbrances. There are many types of encumbrances. Please consult with your local expert for more info.


The grade of the lot will tell you tons about what you can and can't do. If you want a walkout basement, its pretty important that the land slopes from front to back. If you are building on a steep slope this could add significant cost and complexity to the build. These are just a few things to consider about the grade.


The composition of the soils on a specific piece of land will dictate a number of things about the potential build. Some soils require that you dig a lot deeper or shallower on the lot. Some may require a specifically engineered type of foundation. This could definitely be a make or break in terms of the feasibility of your project.


Are there already utilities by the lot or do you need to engineer and add them? Are the utilities easily accessible? Have tap fees already been paid? These are just a few things to consider about the utilities.


It may seem obvious, but it's important to touch on how budget plays a role in choosing the right lot for your build project.


Maybe you have an $800k budget to build. Did you consider that once you buy that 11 acre lot for $300k that you only have $500k left to build? DId you consider many of the extra fees associated with this project. Maybe the $500k leftover won't be able to cover the cost of the house you actually want to build and now its back to the drawing board. These are easy things to forget about.

Price volatility-

Unfortunately we live in a unique time. Prices for construction materials and labor have never been this volatile. It could be that you did your homework and know that you can build your dream home for “X” amount of dollars. Did you know that just in the 6-8 months it takes to develop and plan your home, prices could jump as much as 30%? By the end of the design process you may no longer be able to afford to build? It is critical to work with a design & build firm that can guide you throughout the process and make sure that you always know what current prices are and how they affect your ability to fulfill your dream.

This should give you a better understanding of some of the factors worth taking note on as you search for that haven you hope to build into your heaven. If you choose to take this info and proceed on your own, that is fine. Just consider that there are so many more factors in each category listed and it would do you a great service to work with a professional to make sure you end up on the right path. Get in touch with Blue Horse Construction to start your journey today!


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