New Home Tips, Trends, and Ideas - Raleigh Custom Home Builders

How to Buy a Lot Step 1: "How Much Should I Spend?"

Posted by Penny Hull on Mon, Jul 11, 2011 @ 11:07 AM

Learn How to Buy a Lot

Five Easy Steps: Buying Lots for your Raleigh new home

Building a new custom home can be easier than you think.  There are beautiful lots available in custom home neighborhoods and outside communities throughout the greater Raleigh Triangle area.   Here's how to get started.

Step 1:  Determine Your Budget

How to Buy a Lot, How Much Should I Spend, Raleigh Custom Home BuildersCustom builders in Raleigh can help you find the perfect place to build your new home. Here’s how to make the right decisions.

How much should I pay for a lot for my new Raleigh custom home?

Yes, the price you pay has a lot to do with location – but size, amenities and buildability are also important considerations. Custom builders in Raleigh can offer guidance, but it’s really all about what’s important to you. You’re going to have to prioritize, as you make choices. 

Get Preapproved

Have a financial institution appraise what you can afford

You’ll have to have a bottom line in mind before you even begin to look at lots and land upon which to build your Raleigh NC custom homes.

If you don’t have a lender in mind, ask a custom builder in Raleigh for recommendations. Contact us for a list of local lenders experienced with lot and land financing - there are plenty of great options available.

Talk with financial professionals about your total "construction and land" affordability.  Here are the questions you’ll need answered:

- What monthly payment can I afford?

- What total amount do I qualify for?

- Will my payment be affected if interest rates increase?

What about Property Taxes?

Depending on the specifics of your loan, property taxes may be included in your monthly payment. If it’s set up this way, a portion of the total tax bill is added to your monthly payment each month, then paid to the city or county at the end of the year out of an escrow account. 

You’ll need to ask – because if it isn’t included in the loan, you may be responsible to pay property taxes in one lump sum at the end of each year.  This chart will give you an idea of what kind of taxes to expect on the property for your Raleigh, NC custom home

Guide to Raleigh/Triangle Property Taxes

Property taxes outside city limits will always be lower than taxes inside city limits.  As an example, Chapel Hill has some of the area's highest property tax bills. Outside the city limits, Chatham County has some of the lowest property tax rates in the Triangle. Raleigh’s property taxes can vary, depending on location.

How Much Should I Pay for my Lot or Land?

How to Buy a Lot, How Much Should I Spend, Raleigh Custom Home BuildersAs a general guideline, the cost of your lot or land should be no more than 15-20% of your total "house and land" budget. 

$150,000 total budget = $22,500 to $30,000 lot or land cost

$200,000 total budget = $30,000 to $40,000 lot or land cost

$300,000 total budget = $45,000 to $60,000 lot or land cost

$400,000 total budget = $60,000 to $80,000 lot or land cost

$500,000 total budget = $75,000 to $100,000 lot or land cost

The formula can change a bit for a large amount of acreage - for instance, you might reasonably construct a home with a $250,000 construction cost on a 10 acre parcel which costs $100K. 

Do check that your planned home corresponds with other homes in the neighborhood/area so that your future resale value is protected.

Browse Raleigh Area Lots and Land for Sale

How do I know that the price of a lot or land is reasonable?

Talk to custom builders in Raleigh or an experienced land agent about the lots or land you're considering.  That’s where size, amenities and buildability impact the price of the home – as well as its future value.

An experienced land agent will be able to compare your lot price with other lots in the area, and compare the type of home you plan to build with other Raleigh NC custom homes available in the area.

Five Easy Steps to Finding the Right Lot or Land for Your New Raleigh Home

Custom builders in Raleigh such as Stanton Homes will work with you throughout the entire process of finding a lot or land and building your new Raleigh NC custom home.

Buying a Lot in Raleigh Step 1: What's Your Budget?

Buying a Lot in Raleigh Step 2: What Amenites Should You Consider?

Buying a Lot in Raleigh Lot Step 3: Determine Your Lot Size

Buying a Lot in Raleigh Step 4:  Is Your Lot Buildable?  How Do You Know?

Buying a Lot in Raleigh Step 5:  What is the Total Construction Cost for Your Lot? (Avoiding Hidden Costs)

Contact Stanton Homes at 919-278-8070 or see our online calendar for our next "Meet the Builder" event, and bring us all your custom home building questions.

Tags: How to Buy a Lot, How Much Should I Spend, Raleigh Custom Home Builders