With the exception of condo or apartment-style homes and other rare circumstances, a home purchase includes the land the home sits on. This is obvious to most people buying resale homes, but those purchasing brand-new are sometimes surprised to learn the cost of the land is separate from the advertised cost of the home.
Many homebuyers look carefully to find a builder that suits their needs, then find an available lot on which to build the home of their dreams. If location is more important to you, though, you can start by purchasing the land first. You’ll get the location you want but will have more time to find the right builder.
Here's what you need to know about the process of buying land.
When most people think about buying land for a home, they imagine buying a large parcel of land out in the country. If you’d prefer to live in a suburban setting, though, you can actually buy one of the lots in a development before you choose a builder.
For instance, all Qualico communities feature homes by several different builders, and no builder has a claim to any particular lot in the community. You can buy a lot in a community you like, then work with one of the builders who is allowed to build in that community.
Some people prefer the amount of land you can get by purchasing a parcel out in the country, but most buyers prefer the convenience of living in a developed community. You’ll get the advantages of things like paved trails, playgrounds, and nearby neighbours. You’ll also get the benefit of having public utilities like water, sewer, and electricity readily available. Those building in the country have to bring these utilities out to their location, and this can be a big extra expense.
There’s no doubt the best lots in a new community go quickly. You may like the larger yard and quieter location of a pie-shaped lot on a cul de sac. You may want a lot that has easy access to a pond or walking trail. You may prefer a lot across the street from the playground or one that’s as far away from the playground as possible.
These things aren’t always possible if you decide to wait.
Securing your lot before you choose a builder also gives you the time you need to find the builder that’s right for you. You won’t feel pressured to choose someone simply because you're worried about missing out on a prime lot.
At the same time, it’s important to realize all builders have to follow the community guidelines. This means you won’t be able to build a home that doesn’t fit the “look” of the community. In some cases, your home choices can be limited when you buy the land first.
For instance, there are usually rules that prevent two similar-looking homes from being placed next to each other. If your preferred look is already being built on the neighbouring lot, you may have to make other decisions. Anyone who has strong preferences about the exterior look of the home should consider finding a builder before purchasing a lot.
The easiest way to find a lot in a developing neighbourhood is to browse through Qualico’s list of available lots. With our Find Your Lot program, you’ll be able to look at what’s currently available in each community, then lock in your lot before you lock in your builder. The list conveniently lists specific attractive features of each lot along with the lot price. If you want a better idea of where a particular lot is within the community, click through to the community’s website and find the lot number on the community map.
Once you’ve found the lot you want, you can get the process started with a $1,000 deposit. This will put your lot on hold and off the market for 14 days while the rest of the purchase agreement is drawn up.
The final purchase contract will require you to make a 20 percent down payment on the land. You’ll enjoy no interest on your purchase for three months, and six percent interest for the next six months. Afterwards, the remaining balance is due. Paying that off might seem daunting, but by this time, you’ll probably have started building your home, and you can roll the amount into your mortgage.
Many families find purchasing their lot before deciding on a builder makes sense. It allows them to secure a property in their desired community. If this sounds like something that interests you, browse our available lots and speak with a sales agent to understand your lot options in a Qualico community.