Land can be a great investment and the first step in building your dream home. Purchasing a lot isn’t a decision one should make lightly; without research, a thorough checklist and due diligence, a plot of land can turn into a money pit or a labyrinth of paperwork and legal fees. Here is what to look for before you sign the deed on your lot.
Published September 28, 2019, Updated December 3, 2020
Published September 28, 2019, Updated December 3, 2020
Real Estate
10 Things You Need to Know Before You Buy a Piece of Land
December 3, 2020
Land can be a great investment and the first step in building your dream home. Purchasing a lot isn’t a decision one should make lightly; without research, a thorough checklist and due diligence, a plot of land can turn into a money pit or a labyrinth of paperwork and legal fees. Here is what to look for before you sign the deed on your lot.
Published September 28, 2019, Updated December 3, 2020
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Cost of Surrounding Land
1/20Cost of Surrounding Land
1/20Photo Credit: Getty Images
The best way to ensure you are getting a fair quote on your lot is to investigate the costs of similar plots in the area. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/10-signs-youre-about-to-lose-money-on-your-real-estate-investment-1912684/" rel="noopener noreferrer" target="_blank">The Biggest Signs You're About to Lose Money on Your Real Estate Investment</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandCost of Surrounding Land
PHOTO 1 of 20READ LESS -The best way to ensure you are getting a fair quote on your lot is to investigate the costs of similar plots in the area. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/10-signs-youre-about-to-lose-money-on-your-real-estate-investment-1912684/" rel="noopener noreferrer" target="_blank">The Biggest Signs You're About to Lose Money on Your Real Estate Investment</a>Photo Credit: Getty Images
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Cost of Surrounding Land
2/20Cost of Surrounding Land
2/20Photo Credit: Getty Images
This will also help your valuation should you decide to <a href="https://www.hgtv.ca/real-estate/photos/questions-to-ask-your-real-estate-agent-before-selling-1913136/" target="_blank" rel="noopener noreferrer">sell your land</a> in the future.Real Estate10 Things You Need to Know Before You Buy a Piece of LandCost of Surrounding Land
PHOTO 2 of 20READ LESS -This will also help your valuation should you decide to <a href="https://www.hgtv.ca/real-estate/photos/questions-to-ask-your-real-estate-agent-before-selling-1913136/" target="_blank" rel="noopener noreferrer">sell your land</a> in the future.Photo Credit: Getty Images
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Review a Recent Survey
3/20Review a Recent Survey
3/20Photo Credit: Getty Images
A land survey is a map outlining your property's legal boundaries. When buying land, it is important not to rely on a dated survey. A buyer must be named in the survey to ensure the validity of property boundaries and easements.Real Estate10 Things You Need to Know Before You Buy a Piece of LandReview a Recent Survey
PHOTO 3 of 20READ LESS -A land survey is a map outlining your property's legal boundaries. When buying land, it is important not to rely on a dated survey. A buyer must be named in the survey to ensure the validity of property boundaries and easements.Photo Credit: Getty Images
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Review a Recent Survey
4/20Review a Recent Survey
4/20Photo Credit: Getty Images
If there isn't a recent survey, you'll want to hire a professional to explain and assist you through this process. The cost of a land survey depends on the size of your lot, but will cost under $2,000 if your lot is under 20 acres. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/why-63-of-millennial-homebuyers-regret-buying-their-home-1931809/" rel="noopener noreferrer" target="_blank">Why 63% of Millennial Homebuyers Regret Buying Their Home</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandReview a Recent Survey
PHOTO 4 of 20READ LESS -If there isn't a recent survey, you'll want to hire a professional to explain and assist you through this process. The cost of a land survey depends on the size of your lot, but will cost under $2,000 if your lot is under 20 acres. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/why-63-of-millennial-homebuyers-regret-buying-their-home-1931809/" rel="noopener noreferrer" target="_blank">Why 63% of Millennial Homebuyers Regret Buying Their Home</a>Photo Credit: Getty Images
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Cost of Developing Your Land
5/20Cost of Developing Your Land
5/20Photo Credit: Getty Images
If you intend to build on your land, there will be some significant financial costs involved in converting your lot into a residence. Paving land is a significant expense. Accessing power lines can also get costly if your land is far enough from established utilities. <br><br> Related: <a href="https://www.hgtv.ca/renovations/photos/lessons-building-from-scratch-1914263/" rel="noopener noreferrer" target="_blank">The Most Important Lessons About Building From Scratch That No One Tells You</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandCost of Developing Your Land
PHOTO 5 of 20READ LESS -If you intend to build on your land, there will be some significant financial costs involved in converting your lot into a residence. Paving land is a significant expense. Accessing power lines can also get costly if your land is far enough from established utilities. <br><br> Related: <a href="https://www.hgtv.ca/renovations/photos/lessons-building-from-scratch-1914263/" rel="noopener noreferrer" target="_blank">The Most Important Lessons About Building From Scratch That No One Tells You</a>Photo Credit: Getty Images
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Cost of Developing Your Land
6/20Cost of Developing Your Land
6/20Photo Credit: Pexels
The cost to develop your land can vary greatly, depending on the size of the lot, what you want to build, whether you need to clear the land (of trees, etc.) and more. <br><br> Related: <a href="https://www.hgtv.ca/mike-holmes/photos/10-important-things-to-consider-when-building-your-forever-home-1910972/" rel="noopener noreferrer" target="_blank">10 Important Things to Consider When Building Your Forever Home</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandCost of Developing Your Land
PHOTO 6 of 20READ LESS -The cost to develop your land can vary greatly, depending on the size of the lot, what you want to build, whether you need to clear the land (of trees, etc.) and more. <br><br> Related: <a href="https://www.hgtv.ca/mike-holmes/photos/10-important-things-to-consider-when-building-your-forever-home-1910972/" rel="noopener noreferrer" target="_blank">10 Important Things to Consider When Building Your Forever Home</a>Photo Credit: Pexels
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Proximity to Utilities
7/20Proximity to Utilities
7/20Photo Credit: Getty Images
Building a commercial or residential property on your land means that you need to outfit your real estate with necessary utilities, such as water, phone lines, gas and electricity. <br><br> Related: <a href="https://www.hgtv.ca/green-living/blog/bryan-baeumlers-best-tips-for-year-round-energy-saving-1901047/" rel="noopener noreferrer" target="_blank">Bryan Baeumler’s Best Tips for Year-Round Energy Saving</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandProximity to Utilities
PHOTO 7 of 20READ LESS -Building a commercial or residential property on your land means that you need to outfit your real estate with necessary utilities, such as water, phone lines, gas and electricity. <br><br> Related: <a href="https://www.hgtv.ca/green-living/blog/bryan-baeumlers-best-tips-for-year-round-energy-saving-1901047/" rel="noopener noreferrer" target="_blank">Bryan Baeumler’s Best Tips for Year-Round Energy Saving</a>Photo Credit: Getty Images
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Proximity to Utilities
8/20Proximity to Utilities
8/20Photo Credit: Getty Images
Make sure the land you purchase is near power lines or a water main; otherwise, accessing the nearest utility hub can be costly and inconvenient. If your intention is to build in a remote area, be sure to factor this into your overall budget. <br><br> Related: <a href="https://www.hgtv.ca/cleaning-and-organization/photos/20-clever-ways-to-save-money-on-your-hydro-bill-1053120/“ rel="noopener noreferrer" target="_blank">20 Clever Ways to Save Money on Your Hydro Bill</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandProximity to Utilities
PHOTO 8 of 20READ LESS -Make sure the land you purchase is near power lines or a water main; otherwise, accessing the nearest utility hub can be costly and inconvenient. If your intention is to build in a remote area, be sure to factor this into your overall budget. <br><br> Related: <a href="https://www.hgtv.ca/cleaning-and-organization/photos/20-clever-ways-to-save-money-on-your-hydro-bill-1053120/“ rel="noopener noreferrer" target="_blank">20 Clever Ways to Save Money on Your Hydro Bill</a>Photo Credit: Getty Images
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You Need to Pass a Soil Test
9/20You Need to Pass a Soil Test
9/20Photo Credit: Getty Images
If you are not near a municipal sewer system, specialists will need to conduct a test to ensure the soil on the land can handle any leakage from a <a href=" https://www.hgtv.ca/mike-holmes/blog/why-your-home-might-smell-1920843/" target="_blank" rel="noopener noreferrer">septic system</a>.Real Estate10 Things You Need to Know Before You Buy a Piece of LandYou Need to Pass a Soil Test
PHOTO 9 of 20READ LESS -If you are not near a municipal sewer system, specialists will need to conduct a test to ensure the soil on the land can handle any leakage from a <a href=" https://www.hgtv.ca/mike-holmes/blog/why-your-home-might-smell-1920843/" target="_blank" rel="noopener noreferrer">septic system</a>.Photo Credit: Getty Images
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You Need to Pass a Soil Test
10/20You Need to Pass a Soil Test
10/20Photo Credit: Getty Images
You cannot build on the land if the lot doesn’t meet the requirements of this test, so make sure your purchasing deal contains a contingency about a successful percolation test.Real Estate10 Things You Need to Know Before You Buy a Piece of LandYou Need to Pass a Soil Test
PHOTO 10 of 20READ LESS -You cannot build on the land if the lot doesn’t meet the requirements of this test, so make sure your purchasing deal contains a contingency about a successful percolation test.Photo Credit: Getty Images
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Make Sure Your Zoning is Appropriate
11/20Make Sure Your Zoning is Appropriate
11/20Photo Credit: Getty Images
Areas are typically zoned for a particular purpose: industrial, commercial or residential.Real Estate10 Things You Need to Know Before You Buy a Piece of LandMake Sure Your Zoning is Appropriate
PHOTO 11 of 20READ LESS -Areas are typically zoned for a particular purpose: industrial, commercial or residential.Photo Credit: Getty Images
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Make Sure Your Zoning is Appropriate
12/20Make Sure Your Zoning is Appropriate
12/20Photo Credit: Getty Images
Find out which zoning laws apply to your area of interest; you can rezone your property should you need to, as long as you are well prepared and do the research in advance of the purchase.Real Estate10 Things You Need to Know Before You Buy a Piece of LandMake Sure Your Zoning is Appropriate
PHOTO 12 of 20READ LESS -Find out which zoning laws apply to your area of interest; you can rezone your property should you need to, as long as you are well prepared and do the research in advance of the purchase.Photo Credit: Getty Images
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Get Your List of Restrictions
13/20Get Your List of Restrictions
13/20Photo Credit: Getty Images
Restrictions are valid even when land changes ownership. When talking to your real estate agent, reviewing the restriction history on the property is one of the most important questions you can ask. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/become-a-homeowner-under-35-1926489/" rel="noopener noreferrer" target="_blank">How to Become a Homeowner if You’re Under 35</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandGet Your List of Restrictions
PHOTO 13 of 20READ LESS -Restrictions are valid even when land changes ownership. When talking to your real estate agent, reviewing the restriction history on the property is one of the most important questions you can ask. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/become-a-homeowner-under-35-1926489/" rel="noopener noreferrer" target="_blank">How to Become a Homeowner if You’re Under 35</a>Photo Credit: Getty Images
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Get Your List of Restrictions
14/20Get Your List of Restrictions
14/20Photo Credit: Getty Images
Make sure you are aware of the restrictions on your land before purchase. If any of them are dealbreakers (such as the number of vehicles or building a fence), you can still walk away.Real Estate10 Things You Need to Know Before You Buy a Piece of LandGet Your List of Restrictions
PHOTO 14 of 20READ LESS -Make sure you are aware of the restrictions on your land before purchase. If any of them are dealbreakers (such as the number of vehicles or building a fence), you can still walk away.Photo Credit: Getty Images
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Proximity to Roads
15/20Proximity to Roads
15/20Photo Credit: Getty Images
When buying land in more rural areas, it is important to have access to a well maintained roadway. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/canadian-houses-doubled-in-value-in-5-years-1932742/" rel="noopener noreferrer" target="_blank">Canadian Houses That Have Nearly Doubled in Value in 5 Years</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandProximity to Roads
PHOTO 15 of 20READ LESS -When buying land in more rural areas, it is important to have access to a well maintained roadway. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/canadian-houses-doubled-in-value-in-5-years-1932742/" rel="noopener noreferrer" target="_blank">Canadian Houses That Have Nearly Doubled in Value in 5 Years</a>Photo Credit: Getty Images
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Proximity to Roads
16/20Proximity to Roads
16/20Photo Credit: Getty Images
Should you choose to develop the land, you’ll need reliable access to nearby towns or cities to buy necessities or access services.Real Estate10 Things You Need to Know Before You Buy a Piece of LandProximity to Roads
PHOTO 16 of 20READ LESS -Should you choose to develop the land, you’ll need reliable access to nearby towns or cities to buy necessities or access services.Photo Credit: Getty Images
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Frequency of Natural Disasters
17/20Frequency of Natural Disasters
17/20Photo Credit: Getty Images
It’s important to check that your land doesn’t sit within a zone prone to flooding or other common natural disasters. <br><br> Related: <a href="https://www.hgtv.ca/bryan-baeumler/photos/bryan-baeumler-hurricane-irma-1908434/" rel="noopener noreferrer" target="_blank">Bryan Baeumler Opens Up About His Relief Work in Florida Following Hurricane Irma</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandFrequency of Natural Disasters
PHOTO 17 of 20READ LESS -It’s important to check that your land doesn’t sit within a zone prone to flooding or other common natural disasters. <br><br> Related: <a href="https://www.hgtv.ca/bryan-baeumler/photos/bryan-baeumler-hurricane-irma-1908434/" rel="noopener noreferrer" target="_blank">Bryan Baeumler Opens Up About His Relief Work in Florida Following Hurricane Irma</a>Photo Credit: Getty Images
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Frequency of Natural Disasters
18/20Frequency of Natural Disasters
18/20Photo Credit: Getty Images
Not only is this dangerous for you and your family, if your home is in a natural disaster zone, insurance may not cover the land or the property. Your land survey should communicate any concerns you will have about environmental factors impacting your property.Real Estate10 Things You Need to Know Before You Buy a Piece of LandFrequency of Natural Disasters
PHOTO 18 of 20READ LESS -Not only is this dangerous for you and your family, if your home is in a natural disaster zone, insurance may not cover the land or the property. Your land survey should communicate any concerns you will have about environmental factors impacting your property.Photo Credit: Getty Images
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Managing Land on an Incline
19/20Managing Land on an Incline
19/20Photo Credit: Getty Images
Whether your land is flat or sloped presents different opportunities and challenges when it comes to development and resale. Land on an incline is more expensive to develop and requires significant planning when building a residence or business. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/landscaping-ideas-to-increase-property-value-1914905/“ rel="noopener noreferrer" target="_blank">Smart Landscaping Ideas Designed to Increase Your Property Value</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandManaging Land on an Incline
PHOTO 19 of 20READ LESS -Whether your land is flat or sloped presents different opportunities and challenges when it comes to development and resale. Land on an incline is more expensive to develop and requires significant planning when building a residence or business. <br><br> Related: <a href="https://www.hgtv.ca/real-estate/photos/landscaping-ideas-to-increase-property-value-1914905/“ rel="noopener noreferrer" target="_blank">Smart Landscaping Ideas Designed to Increase Your Property Value</a>Photo Credit: Getty Images
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Managing Land on an Incline
20/20Managing Land on an Incline
20/20Photo Credit: Getty Images
You also need to watch out for <a href="https://www.hgtv.ca/mike-holmes/blog/water-leaks-101-how-to-protect-your-home-1920494/" target="_blank" rel="noopener noreferrer">water runoff</a> if you’re looking to develop at the base of an incline, as you can be prone to flooding or mudslides in rainier climates. <br><br> Related: <a href="https://www.hgtv.ca/scott-mcgillivray/blog/ask-scott-where-should-i-focus-my-budget-on-my-first-flip-1914391/" rel="noopener noreferrer" target="_blank">Where You Should Focus Your Budget on Your First Flip, According to Scott</a>Real Estate10 Things You Need to Know Before You Buy a Piece of LandManaging Land on an Incline
PHOTO 20 of 20READ LESS -You also need to watch out for <a href="https://www.hgtv.ca/mike-holmes/blog/water-leaks-101-how-to-protect-your-home-1920494/" target="_blank" rel="noopener noreferrer">water runoff</a> if you’re looking to develop at the base of an incline, as you can be prone to flooding or mudslides in rainier climates. <br><br> Related: <a href="https://www.hgtv.ca/scott-mcgillivray/blog/ask-scott-where-should-i-focus-my-budget-on-my-first-flip-1914391/" rel="noopener noreferrer" target="_blank">Where You Should Focus Your Budget on Your First Flip, According to Scott</a>Photo Credit: Getty Images
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