Floor Plan of home

Maybe you've always wanted to build your dream home close to a winery in Santa Cruz. Perhaps you're frustrated because there aren't many houses for sale near Santa Cruz's beaches or Silicon Valley, the tech powerhouse, or you're considering creating your own in a tranquil area like Capitola Village, California.

You are not alone in this! Data from the Department of Housing and Urban Development and the U.S. Census Bureau show that more than 1.8 million new home permits were issued in March 2022, a 6.7% increase over the same month the previous year. 1,495,000 permits for privately owned homes were issued in December 2023, a notable 6.1% increase from December 2022 and a 1.9% increase from November. For single-family homes, permits in December were 994,000, up 1.7% from November. Finding the ideal location for your house is perhaps the first crucial step in building one.

Process of Buying Land and Building a House

The first step in constructing a house is finding the perfect land. You can achieve this by driving around and searching for signs or by going online and looking for phrases like "Santa Cruz homes for sale," "Pasatiempo homes for sale," "Homes for sale Watsonville, CA," or simply "land for sale near me." Some helpful websites to explore include LandSearch, PropertyShark, Zillow, and realtor.com. You might also check out LandAndFarm.com, LandCentury.com, Land.com, LandWatch.com, and LandHub.com as other options. These websites contain long listings of land that is up for grabs.

When looking for undeveloped property to build on, the best course of action is to work with a real estate agent specializing in land sales. A good place to start is the Realtors Land Institute, which provides listings and a search function to assist you in finding a certified land specialist in your region. A local agent who is a member of the Accredited Land Consultant title may be easily recognized by the term ALC after their name.

Make sure the person helping you find residential lots in Santa Cruz, for example, is aware of your preferences for the kind of building you want and where it should be located. It is crucial, especially if you have specific requirements. For example, if you long for a mountain view, explore possibilities in Scotts Valley, Los Gatos, Felton, or Santa Cruz. If you plan to build near a winery in Santa Cruz, ensure your helper is familiar with areas like Aptos, Watsonville, Soquel and Santa Cruz. Please ask about any upcoming developments that might affect your desired view, particularly if having a scenic landscape is your priority.

You can also check out the option of buying land from the government. Government agencies often have land for sale, usually coming from two sources. The first instance relates to surplus land held by municipal, state, or federal authorities that are no longer needed. The second situation is when property owners don't pay their yearly taxes, which resulted in tax liens, tax deeds, and auction sales of the lands. For additional information on land auctions, visit your state's surplus property division or search for surplus sales on the USA.gov website.

Another excellent resource for locating land for sale is an online auction site. Registering, obtaining property details, and placing an online bid is typically straightforward on auction websites. The majority of them don't charge you anything to visit and put bids because the seller covers the costs.

Buying land to build a house checklist.

The most important thing when buying land is doing your research, whether you're looking at Beachfront Santa Cruz, Silicon Valley, a peaceful neighborhood like Capitola Village, California, a place known for hiking in Santa Cruz, or any other part of the Bay Area. The following is a list of things to consider while buying land for a house:

a) Zoning Rules

Zoning is the most common type of land-use regulation, and cities use it to manage how properties are developed within their borders. When considering a piece of land to buy, you must ensure it fits with your plans for building a home. For a custom home, this usually means it should be zoned for single-family residential use. Every county and city has its own zoning rules that you need to check.

For instance, even if Los Gatos and West Santa Cruz are close, their zoning rules might differ greatly. The rules for building a vacation home in Santa Cruz at Scotts Valley might not be the same as those for a Santa Cruz commercial real estate investor looking at Aptos Santa Cruz. So, it's really important to see if the lot meets your needs, as changing the zoning of a property is expensive, takes a lot of time, and isn't guaranteed to happen. So, please don't buy a lot unless it can definitely support your urgent need to build a home on it.

b) Deed restrictions on how you can use the land

Ownership of land is transferred through a legal document known as a deed. . Besides describing the site, this document details any building or land use restrictions. Deed limitations are often common in areas governed by homeowners' associations (HOAs), and compliance with these restrictions is mandatory in addition to any current zoning laws. Typical deed restrictions imposed by HOAs may include:

    • Specifics regarding permissible home-based businesses
    • Rules for parking and designated areas for vehicles
    • Guidelines for fencing
    • Limits on the duration one can inhabit a recreational vehicle (motorhome or trailer designed for living, commonly used for camping or travel) throughout the year
    • Restrictions on acceptable types of pets
c) Accessibility

Imagine this: even though California's housing market and commercial real estate industry appear to have bright futures, would it make sense to purchase land in the beautiful Soquel, Santa Cruz, with plans to build a vacation house and an accessory dwelling unit (ADU) if the site is difficult to get to? Sometimes, a property next to a road might not have the legal right of access, or it could need a road to be built before it can be entered. Due diligence is necessary to avoid the danger of investing in something that may turn out to be worthless or of very little value because every lot is different.

When thinking about buying land, it's essential to consider several factors.

d) Utilities & Service

Not every lot has access to essential utilities like the internet, water, sewage, and electricity. During due diligence, it's critical to verify with local utilities to see if these services are available on the property or are close by. Remember that there can be costs associated with running services to your home, in addition to connection fees, even if they are available.

e) Build Requirements and Getting the Land Ready to Build on

Improvements, including fire hydrants, sidewalks, roads, water service upgrades, and under-grounding electrical lines, may be necessary on some properties. The buyer assumes risks associated with such things; therefore, don't hesitate to get in touch with local agencies to get the required information during your due diligence.

You need to obtain approvals from the county or local authorities before commencing construction, albeit one that involves expenses. It would be best if you also considered the costs of removing obstructions like trees and debris from the site. Also, inspect for vulnerabilities such as cables or pipelines and notify local utility providers of any issues. Ignoring this could lead to increased costs and legal complications. Getting property insurance is the best course of action. Remember that setting boundaries will require conducting a survey, which could incur extra costs.

Financing Land Purchase

Perhaps the largest obstacle to someone wanting to acquire land is financing the purchase. Numerous choices are available to meet different needs and circumstances. Here are some common methods:

Cash Purchase

Settling the entire cost of the land with cash removes the need for loan financing, making it a practical choice for individuals with the financial means to make a one-time payment. This approach becomes particularly advantageous when planning immediate construction, as it avoids reliance on contractors who may insist on having secured title and ownership.

Raw or Unimproved Land Loans

These loans are for raw land without amenities or construction. Lenders could need a substantial down payment, thorough plans, and a solid plan for the development of the land. Unlike conventional mortgages, the interest rates are often higher, and the repayment period tends to be shorter.

Improved Land Loans

If the property includes existing utilities, a water source, and road accessibility, it can be classified as improved land. Lenders may see loans for developed land as less risky than loans for raw property, although improved land still requires a sizable down payment.

Builder Financing

Getting land through a builder makes things easier. An experienced builder usually has their go-to lenders, and the property is already ready for development – already divided and zoned. This choice provides standard financing and saves you from worrying about soil tests, installing wells, or dealing with zoning problems.

USDA Construction Loans

If you have a modest income, you may be eligible for USDA building loans if the land is situated in a rural location. This program offers a Construction-to-Permanent Single Close Loan, encompassing both land and construction expenses. It's crucial to remember that this choice might not be the greatest choice for purchasers with long-term development ambitions and is more appropriate for individuals who want to begin work immediately.

Seller Financing

Fortunately, you may come across a determined seller prepared to finance the land they are selling. With this arrangement, both parties may benefit from the seller carrying the loan. A legally enforceable contract containing all relevant information—such as down payment requirements, interest rates, and loan terms—is key for establishing this agreement.

New Construction Loan

New construction loans offer a complete option if you want to start building as soon as you purchase the land. These loans streamline the entire process by integrating finance for the house and the land. Interest payments are usually required until the closing, at which point they are consolidated into a standard mortgage loan.

Floor Plan for second floor

Breaking Ground: Where to Buy Land to Build Your Dream Home in Santa Cruz, California.

Santa Cruz, CA, is more than just a destination; it's a lifestyle. With its stunning beaches, captivating landscapes, and a plethora of activities, it's no wonder many dream of calling this place home.

Exploring Coastal Charm: Santa Cruz Beaches and Beyond

Coastal life is appealing, so keep it in mind while purchasing land in California. Your land's value might be greatly increased by being close to the beautiful Santa Cruz beaches, such as Soquel, beachfront Santa Cruz, and Aptos. The lifestyle offered by these coastal areas should align with your vision for the property.

Investigating Capitola and Capitola Village

The City of Capitola, known for its picturesque village and vibrant atmosphere, is a sought-after location for land buyers. Please research the things to do in Capitola and understand the local amenities to help you gauge the potential of land investments in this charming coastal city.

Unlocking Commercial Potential: Santa Cruz Commercial Real Estate

If you are interested in commercial ventures, exploring Santa Cruz commercial real estate, especially in Silicon Valley, is a compelling option. Consider the economic dynamics of the region and evaluate opportunities for commercial development that align with your investment goals.

Embracing Nature: Hiking in Santa Cruz and the San Lorenzo Valley

Beyond the coastal allure, California is a haven for nature lovers. Delve into the experience of hiking in Santa Cruz and explore the trails in the San Lorenzo Valley. Understanding the region's natural beauty is essential when choosing the location for your land purchase.

Maximizing Land Use with ADUs: Accessory Dwelling Units

Explore the possibilities of maximizing land use through Accessory Dwelling Units (ADUs). Whether you're in Santa Cruz or one of the small towns near Santa Cruz, understanding the regulations surrounding ADUs can offer additional income streams and increase the flexibility of your land investment.

Closing the Deal in Scotts Valley and Watsonville

As you approach the final stages of your land-buying journey, collaborate closely with your real estate agent and legal professionals to close the deal seamlessly. Whether it's homes for sale in Scotts Valley or land for sale in Watsonville, the closing process is a critical step in officially securing ownership of your California dream property. Bottom line

Before acquiring land to build a house, you should conduct extensive research, just as you would with any other property type. Checking if the site is a suitable match prepares you for the obstacles and costs of building a house later. Working with a professional who can help you navigate potential obstacles, such as zoning and permissions, is also a good idea.

Paul Burrowes, CRS, CCEC, SFR, NHCP, LHC, REALTOR® Licensed REALTOR® with over 15 years of experience and expertise. Commits to being on time and transparent. Acts as your consultant to ensure you make the best decisions to fit your transaction at every step in the process. Negotiates towards a low stress, win-win outcome. Handles all the details for you, ensuring the hundreds of steps in your real estate transaction go smoothly. Proudly serving Silicon Valley, Santa Cruz, Monterey, and Santa Clara Counties! | DRE# 01955563 | (831) 295-5130 | paul@burrowes.com |

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