Is Buying Land and Building a Home Cheaper Than Simply Buying An Existing House?

Property ownership is an exciting time at any point in life. The vision of creating a comfortable and inviting home, and the pride of ownership are some of the various reasons to take the next step toward buying real estate.

With so many great opportunities available, especially in today’s hot market, a logical question for buyers to ask is whether buying land makes more sense than purchasing an existing home. Rest assured that today we’re going to look into some of the reasons you should consider when exploring land buying options and answer some common questions regarding the process.

The Difference Between Buying Land for Building a Home and Buying a House

Loan structure is among the more significant differences when deciding whether land or an existing house is the right choice for you and your family.

Mortgages offer a range of options to suit needs and budget; however, land loans may offer a lower down payment if a buyer has a great credit score. In instances where an individual’s credit score may not meet a lender’s standards, prospective land buyers could take advantage of seller financing terms.

Seller financing is similar to a mortgage, but instead of borrowing money from a lender or bank to purchase real estate, a buyer will make payments directly to the real estate owner, or seller, until the purchase price is paid in full.

This benefits buyers in that securing funding through a traditional financial institution is eliminated, and buyers and sellers work together to negotiate a transaction without necessarily including credit score as a qualifier.

If a buyer is in the position to do so, one of the benefits of purchasing land with cash is that the amount for the land can be used as a down payment toward a construction loan when you’re ready to build.

Lenders can also include your land purchase within your construction loan in certain cases. Speaking with a land specialist will help you evaluate your options, while a financial advisor is able to work with you to assist with asset liquidation or arranging finance options.

Great Reasons to Buy Land

2021 has so far opened itself to a competitive housing market, with homes being snatched up faster than ever before. New home sales are quickly selling before builds are finished, and older homes may not be appealing to first-time buyers given the problems that may come with older construction.

The current housing market makes purchasing land a more appealing choice and affords you the possibility of creating a home based on your own specifications. Regions including South Texas offer great rural land opportunities amid gorgeous landscapes and away from the restrictions of homeowners associations.

Buying land also offers great privacy options and less intrusion from nearby neighbors, and lets buyers receive more space to create a dream oasis for their families. Other benefits include:

    • Low Entry Price (i.e. buyers enjoy the benefit of buying vacant land at a less expensive price than an improved lot)
    • Greater Flexibility
    • Minimal Carrying Costs
    • Long-Term Appreciation
    • Significant Appreciation Potential

What to Consider When Buying Land

The first step toward determining buying land for building a home is gauging your budget.

Buyers will need to factor in construction costs and additional costs including permits, fees, land adjustments, and if needed the cost of running water, sewage, and utility lines to the home.
A land expert will offer critical guidance to best understand the steps needed to move forward and make sound financial decisions regarding your investment.

SRC Land: the Right Land Development Company You Need to Help You Build Upon Your Dream

Finding the right land means more than envisioning a spot to build your dreams on. The land experts at SRC Land offer affordable lands across South Texas, including lands and lots available in Harlingen, and make the process of buying simple and reasonable for anyone who have struggled to secure funding with conventional lenders.

We work with everyone regardless of credit and enable first-time landowners to live their dream of buying land in Texas. With large acreage sites, and great inventory to choose from, your path to ownership is within reach.

Get to know more about our easy seller-financing options and get started on the way to owning your dream property today!

Contact SRC Land Now


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