10 Tips for Buying a Lot in Durango

With the Durango area real estate market on overdrive and existing home inventory at record lows, prospective buyers (and sellers looking to upgrade) are considering building. The thought of a custom built home can be as daunting as it exciting! If you’ve never been part of building a house before, here are a few things to keep in mind.

**These tips are only intended to be conversation starters with your realtor and extended building team. Please be sure to ask and confirm all your questions independently. 

1. When you’re evaluating a lot, consider: views, sun and wind exposure, location, size, access, HOA fees and rules, and building codes and regulations (especially around design, fencing, setbacks, etc.). Do these fit your tastes and lifestyle?
2. Consider the natural features and topography, especially the cost and availability of water, for landscaping and fire mitigation, etc.
3. Are the utilities already in place? Water? Electricity? Sewer/septic? If not, how much will it cost to run them to the property?
4. Especially if the lot is not in a developed subdivision, understand the current zoning of the area, any usage restrictions, water and mineral rights, soil conditions, septic capabilities, and if the land has wetlands or is in a flood plain.
5. What will the property taxes be on your chosen lot with your proposed home size and value?
6. Will your home insurer cover the location?
7. Most builders are a bit wary to quote per square foot costs, even though it’s a metric most of us are familiar with. Here’s why: material costs are variable, finish choices can change the number significantly, and almost every build will have at least one change order. Find a contractor with whom you feel comfortable talking about budgets.
8. Incorporate costs to finish your property, such as: landscaping, paving roads and driveways, and other touches that likely aren’t included your original building costs.
9. Construction loans can cover the lot plus building costs. Most require 20-30% down, with interest rates that are slightly higher than a mortgage loan (presently, construction loans are about 1% higher). Ask your banker about “construction only” and “construction-to-permanent loans.”
10. Expect the unexpected! Even working with consummate professionals, building a house is bound to uncover a few surprises. Setting your mind to this reality can make it easier to manage when they happen.

For an extra resource, this article provides a primer on different types of loans and due diligence.

We love to connect great people with great people! Contact us at Homes Durango for referrals and references for trusted contractors.