#2 OVERLOOKING THE IMPORTANCE OF THE LAND

Overlooking the importance of a homesite is another common equity killer.

The first issue is usability.

Choosing an unsuitable or poorly situated homesite can add tens of thousands of dollars to the cost of your home. Demolition, development, infrastructure improvements, geography, flood plains, and environmental issues are all considerations when looking for a homesite. So before you buy land or start construction, make sure you have thoroughly evaluated all the potential costs and risks associated with the site.

The second issue is resale value.

We’ve all heard the real estate cliché, “location, location, location.” It’s a cliché because it’s true! When searching for the perfect homesite to build your home, keep in mind that not all land is equally desirable.

Here are some critical considerations when looking for the perfect homesite:

Adjacent Use

Does the homesite sit next to other homes? Does it back to other homes? Is there empty space on any side of the homesite? What is that space zoned? Can it be built on in the future?

Typically, a home surrounded by other residential homes or a desirable open space, like a park, forest preserve, field, or lake will command the most attention and return on investment.

If you are budget-conscious when looking to build, a homesite is one of those areas where a considerable amount of money can be saved. Like many things when building a new home, there is a delicate balance between personalization and resale value so it pays to think about the eventual resale value of a home in that location. Even the most beautiful home located on a less desirable homesite will appeal to a smaller group of buyers, likely take longer to sell and not fetch top dollar.

Lot Premium

In a neighborhood development, one where a developer or builder has multiple lots available for sale you may find that the cost of a homesite varies. Builders and developers will often apply lot premiums to certain lots they deem more desirable. This could be simply because the site is oversized, backs to open space, faces a more desirable geographic orientation, or is located in a cul-desac.

Buying a homesite with no or low additional cost could be appealing to many in order to save money on the overall build. After all, there is nothing wrong with saving money and maybe you are ok with a small homesite, any geographic orientation, or having neighbors closer by. The key is to understand the decision and realize that the homesite location will likely not net you a premium down the line when you go to sell.