What to Consider When Buying a Homesite in Indiana

Buying a site to build a new home or cabin on wooded property or tillable farmland should be exciting and fun. However, there are many details to consider, and this process will take time. We’ve assembled some key rules and questions you’ll need to review prior to and during your homesite acquisition in Indiana.

Know Your Budget

This is always key in making any large purchase. If you’re considering buying land to build a home, consult your financial advisor and lender prior to beginning your search. This is why we don’t test drive cars out of our budget or try on expensive clothes we know we can’t afford: it’s painful to fall in love with something you can’t have.

Identify Your Needs

After discovering what you can realistically afford, you’ll need to evaluate the needs of you & your family. If you have young children, a location on water may not be the best option unless you plan to install barriers to prevent accidents. If you have a busy lifestyle, a location requiring maintenance and upkeep may not suit your schedule. If you prefer peace & quiet, a secluded site may be more beneficial. If you plan to grow your family, the site will need to accommodate a home of appropriate size.

Find a Qualified & Experienced Land Broker

Not all real estate agents are made equal. You will need to find a broker with experience in selling vacant  and/or unimproved land. These exchanges are different from your typical home sale and come with a different set of concerns. It’s important to find someone that will help you find the best fit for you and your family. A land broker’s number one job is to advocate for the client; they work for you. A knowledgeable & experienced land broker will take the time to sit down with you and your family to figure out what your exact needs & goals are.

When did you need & want to finish construction on your home? This process can take time. Patience will be key. Setbacks may occur, and these will require time to address. It’s important to be realistic in your plan and anticipate delays.

Location, Location, Location

The next step requires more evaluation of your life & lifestyle. Often, this is one of the first questions a land broker will discuss with you: where do you want to live? If you have school-aged children, you may want to remain with a certain school district. If you travel a lot for work, you may wish to remain closer to major highways. If not, will you be okay with a longer commute to work? This brings us back to the first step: Identify Your Budget. Sacrifices may need to be made to accommodate your needs. Which brings us to the previous step: Find a Qualified & Experienced Land Broker. Your land broker will evaluate your needs and budget with you to help you select a homesite that will fulfill as many factors as possible.

Potential Sites

Great news! You’ve found a piece of land that initially suits what you’ve been looking for. The land must now be further evaluated by you and your broker. Your broker will probably already know some basic characteristics about the property. When building a new home, utilities (or lack thereof) will need to be factored into your decision. You will need to know if the land has access to public water & sewer. If so, you may need to have water & septic system tests performed. If not, how much will it cost to gain access or how much would it cost to install a well and septic system. Do you have a preference and options for energy – gas vs. electric? For those of us that rely on technology for work and/or school, you’ll need to find out about cell phone reception and internet service. If you work from home, these two factors could make or break your decision.

The property zoning classification is also important. A qualified broker will only show you properties that are zoned for your needs, but it’s important to anticipate the future. If the neighboring area is zoned for future industrial construction or a major highway, this could influence your decision.  Your broker should be familiar with the community and be able to make educated forecasts in regard to potential future land real estate landscapes.

Surveys

When purchasing land in Indiana, it may be helpful to have a survey completed. A land survey determines and establishes property boundaries legally. Over time (intentional or not), neighbors may extend their property boundaries into one another’s. Knowing your boundary lines is incredibly important. These boundaries could determine the location of where to place your home or whether or not you have access to utilities in place. The boundaries can also influence the value of the property and thus the amount you are able to borrow which will influence your budget.

A survey of the property should be on file to ensure you end up with what you pay for. Survey costs vary and may have several influencing factors. Geographical location, size and history of property, and terrain could affect the price. Often, buyers can ask that the seller pay to have a survey performed. This document is a valuable tool for the seller, and will probably need to be done prior to a sale anyway.

If a survey is not in existence, speak with your land broker about the necessity of having a survey performed.

Soils & Septic System

If you’re buying land in a rural area, one of the most important factors to consider for your overall land budget and construction loan is the septic system. Every county in Indiana has a different set of rules regarding septic systems (some are stricter than others). The soil type and location of the property can also influence the septic system options; for example: building a home on a wooded property with a creek may call for a different system than a home built on flat land adjacent to a cornfield.

Your land broker should be able to provide a copy of soil borings (where required) that you should share with your homebuilder. This will help determine if a traditional septic, mound septic, or other perimeter drainage may be required. If additional drainage is required, this will impact the overall budget and should be given careful consideration.

Easements or Shared Driveways

An easement is a legal right to cross or use a property from the owner. For example: in West Central Indiana, easements are often in place to allow farmers to access crop fields. Sometimes, farmland is surrounded by other properties with no access road. Legal easements give a farmer the access needed to work fields.

Shared driveways should also be assessed. This could mean you share the financial burden of maintaining a roadway with a neighbor. If a shared driveway exists, it might be best to discuss your obligations and potential issues with your attorney.

Covenants & Restrictions

Now that you’ve decided the land will be suitable for your new home, you need to evaluate the neighborhood. These are rules and limitations placed on homeowners by municipal regulations, homeowner associations, and/or state laws. Again, this is why finding a Qualified & Experienced Land Broker is so very important. Your land broker will check records to find out what rules pertain to your potential home. Some rules may not allow a homeowner to run a business out of their home or require prior approval of building plans. Other restrictions may specify allowances for additional structures.

It’s important to adhere to these rules. Violations are often met with a written warning initially but in some circumstances ultimately lead to costly legal action. This is why these restrictions should be reviewed and evaluated prior to agreement. If you have legal questions, you should always consult your attorney.

Water Wells & Water Sources

Water quality and water availability are some of the most important factors in buying raw or unimproved land. Questions to consider include: are their other wells in proximity on adjacent farms or land? What are the depths of nearby water wells?  What kind of water quality might you expect in a given area of interest?

Some water well may have excess minerals such as iron (which means a water softener and or whole house water filter should be factored into your budget and other areas may contain sulfur (which generally has an odor). Be mindful of these factors, as the costs to drill a well & install a well pump vary from region to region.

Who are the reputable well drilling companies near you?  What do they charge?

Have more questions? We’re here to help!

Financing

If you’ve followed your steps, you’ve already spoken to your financial advisor & lender. They will assist you in the monetary portion of the purchase. They’ve already advised you on what you can expect to pay in a deposit. If possible, it’s often better to pay for the land in cash; this may increase confidence from lenders for construction loans to build your home. There are various options in the way of loans. The USDA has several programs that may prove beneficial for your family; check https://www.rd.usda.gov/programs-services for details. You can also research construction loans to permanent loans; these loans become a mortgage once a home is complete. It’s pertinent to discuss all your options with a financial expert.

The Broker You Choose Matters

A land broker’s first priority is to aid the client. A good land broker will be honest with you about expectations and availability. A great land broker will help evaluate your needs and wants with you to identify where compromises can be made. Don’t be afraid to ask for references or testimonials.