Building the home of your dreams is an exciting life decision. Of course, there’s a lot to learn if you have never done it before, but with the help of an experienced builder, the process can go quite smoothly.
If you’re thinking of building a new home in Arizona, one of the first steps is securing land. Doing so requires:
- Obtaining pre-approval for financing
- Performing due diligence to understand restrictions of land use
- Understanding lot restrictions, building restrictions, and the permitting process
- Getting your land surveyed and utilities connected to the site
- Completing site development tasks
And if you already own a lot, there’s still some work to do, including learning what you can and cannot do on the property and planning for the costs associated with preparing the site for construction.
To help you get started on your homebuilding journey, here are some tips for securing your own land in Arizona.
Get preapproved for financing.
Even if you have a budget in mind, it’s important to know what you truly have available to spend before you make an offer on a lot. Getting preapproved for new construction financing will tell you how much you have to spend on the entire project, which includes:
- The cost of land
- Site development expenses
- The cost of the house itself
Once you know your overall budget, if you have a floor plan in mind, you can determine how much you have left to invest in the rest of the project.
When looking for land, remember to factor in the cost of site development because this amount can vary widely depending on the conditions of the lot. A site development expense that tends to fall beneath landowners’ radar is the clearing and grading process.
Clearing and grading can cost up to $5,000. Costs often fluctuate based on the terrain. For example, heavily wooded areas tend to be more costly. Additionally, if there are existing structures on the land, you will need to include debris removal in your budget.
If the financial aspects of this process seem overwhelming, Adair Financial Services can pair you with a financial specialist to organize the budget for you.
Perform due diligence before you buy land.
Not every lot is suitable for building, and even the ones that are might have restrictions that prevent you from doing exactly what you want. When you make an offer, make sure you leave enough time to perform due diligence before the sale is finalized. Be sure to understand:
- How the land is zoned. Zoning is the local planning authority’s determination of how a particular piece of land can be used. Zoning informs setbacks, which are restrictions on where on the property the home can be built as well as the size and structure of the home.
- If utility hookups are available. Knowing which utilities are available—and which are not—will determine additional costs, such as the cost of a septic tank in the event that a sewer line is unavailable. Especially in Arizona, you will need to determine your access to water, whether it is by drilling a well or hauling water.
- Existing deed restrictions. Make sure that there are no private deed restrictions associated with the lot, and if there are, that they don’t prohibit you from building the type of home you want. There could also be easements or encroachments, so take the time to check every possible factor that might affect your plans.
Even if the seller has provided ample information, it’s a good idea to confirm it because regulations might have changed since they did the research. Your offer can include any due diligence period you specify, but 30-90 days is a typical range.
Understand local building restrictions.
Depending on the location of the lot, it could come with building challenges in the form of covenants, conditions, and restrictions (CC&Rs). For example, if the home of your dreams is a midcentury modern style and the homeowners’ association (HOA) has requirements about specific roof slopes, you might not be able to build the type of home you want on that lot.
Even though you own the land, you are still subject to the CC&Rs. These can vary significantly, so make sure you understand what you’re signing up for when you choose a neighborhood. CC&Rs can include:
- Guidelines about paint colors, garage location, building materials, and window types
- Lifestyle guidelines about pets, landscaping, and more
On the other hand, perhaps a high level of standards in a neighborhood is desirable, and you want the protection of an HOA. If you are planning to build a forever home, be sure to choose a lot that aligns with your vision.
Understand the permitting process.
Building a new home on your own land requires a building permit. In Arizona, there is no statewide code, and each municipality and county has its own permitting process.
It’s important to do a little research before you start so you know what is required and how long it typically takes. Start your search online by going to the local building department’s website to learn about its process. Phoenix’s page for residential building and permits is a good example of the type of information you can find online. Every city is different, so take the time to check out your local guidelines.
If you have a site in mind or already own the land, schedule a visit to your local permitting office to ask any questions that are not answered on its website. This is especially a good idea if your site has any unusual conditions. This is also a great time to make sure you understand all of the permits that will be required and the associated costs.
A building permit is just one of the steps in the regulatory process. For example, you might need to obtain a permit for getting sewer service to your site or approval from the water services department to install a septic system.
Get your land surveyed.
You don’t necessarily need to have your land surveyed (although your lender may require it), but it’s always a good idea. Here are two ways to go about surveying your land:
- You might be able to obtain a survey before you make an offer; in this case, you can have a stronger understanding of additional expenses or limitations prior to purchasing the lot.
- If this is not an option, schedule it during the due diligence period and make your offer conditional on the survey results.
The seller is likely to provide a survey; regardless, it’s a good idea to get your own. This is especially important on a smaller lot or a site with setbacks that will limit your building area.
A survey is a small investment that provides a wealth of valuable information that will help you protect a much larger investment. You might learn that a neighbor’s fence extends onto the property or that the property lines are in dispute. These details are important to know before you buy.
If you’re buying a larger plot of land, a survey will also tell you how you might be able to divide it, which could be useful for siting your new house if you plan to split the parcel in the future.
Get utilities connected to the site.
Depending on where the property is, you might be responsible for working with the local utility providers to bring services to the site. There are costs associated with this work, and they vary widely, so it’s a good idea to get an estimate before you close on the land. You can determine these costs during the due diligence period.
That last thing you want is to find yourself in the position of owning land that you can’t afford to develop because you didn’t know how much it would cost to connect the water, sewer, electricity, and other utilities to the site.
On the other hand, an urban lot might have connections available at the street, which helps keep costs lower than those of a more secluded lot.
Complete site development tasks.
Buying land is just one step in the process. Often, when you buy a lot, it takes some preparation before it is actually buildable. As previously mentioned, clearing and grading can take time and effort. This can include digging drainage ditches, removing trees, leveling the site, or doing any number of tasks to get it ready for the foundation to be poured.
Unless you have experience with the homebuilding process, it’s a good idea to work with a local builder to determine exactly what will be required. Many builders, especially those who work locally, will be able to provide a rough estimate of the site development costs, so you can factor them into your decision to buy the lot.
Let Adair Homes help.
If you’re considering building a new home in Arizona, the experts at Adair Homes are here to help. We’ve been building homes for more than 50 years and have tens of thousands of happy customers who now live in their dream homes.
We’ll work closely with you from the very beginning of your project, even if you don’t have land yet. We can even help you prequalify for a new construction loan and secure financing. If there is a lot you’re considering, we’ll do a site visit to help you estimate the development costs, so you will know how much is left in your budget to build a house.
To learn more about our unique process that allows you to generate immediate equity, schedule an appointment with a Home Ownership Counselor at one of our offices in Phoenix, Tempe, or Tucson.
