What Is a Land Home Package: Key Implications That You Should Know
The US real estate market is headed for a recession, according to many experts. As the prospect of lowering home values looms, savvy buyers are looking for alternative ways to get into a house that will save them money and will insulate them from a market drop off.
One of the strategies that are becoming popular as a result of that need is purchasing a land home package.
A land home package (or a house and land package as they’re often called) presents a little bit of a different buying process than just finding a house on Zillow and buying it.
Our aim is to educate you on the implications surrounding land home packages so you know if they may be a good option for you.
What Is a Land Home Package?
A land home package is when buyers purchase a plot of land and contract a builder to craft a home on their parcel. Many buyers find this arrangement preferable to simply buying a house on a pre-established plot because savings can be found by purchasing homes and land separately, especially if both purchases are made in a single transaction.
Does a Single Business Sell You Your House and Land?
In some house and land deals, a single seller will offer you both a plot of land and the building services required to construct your house. These true packages usually represent a better deal than buying components separately.
With that said, it’s not uncommon for buyers to purchase land and building services from two separate vendors.
How Does Financing Work?
Banks are very cautious about loaning money for land. If you can make clear that you intend to immediately build a house though, most banks will offer you conventional financing.
Talk to your land home package seller to see if they work with particular banks that are used to financing these kinds of transactions. The more familiar your bank is with what you’re trying to do, the faster you’ll be able to secure the money that you need.
Is It Truly Advantageous to Buy a Land Home Package?
People do find savings when they buy a plot of land and their home separately in a single transaction. It’s also liberating to select a piece of land that you love and build your dream house on it rather than purchasing somebody else’s vision.
That being said, land home deals vary and it may be that they don’t offer you considerable savings over buying an existing property.
Do your diligence and make a decision that’s the most sensible, based on your findings.
Our Final Thoughts
Picking between buying a traditional property and opting for a land home package can make for a tricky decision.
The best advice that we can give you is to weigh options with a real estate professional. That way, you understand serious implications related to depreciation and zoning.
Do you need more information on land home packages now? If you do, consider browsing additional content in our real estate focused blog.