If you have always dreamed of buying land for your custom home, you are not alone. In 2020, the United States will see almost 1.5 million new home building permits issued.  That is an increase of almost 500,000 from 2017.

While not all those homes were private builds or constructed on land separately purchased by the buyer, it is safe to say that buying land and building a house on it has become more popular than ever. Concerns about public health issues, such as COVID-19, have people leaving the big cities and congested areas to buy land and build a home with a reputable, custom home builder.

Buying land and building your dream home is more feasible than you might think!   But, options are dwindling for where to find land and you may need help understanding how to buy it, and how to build a house on it.

We, at Generation Homes, work with local real estate professionals as well as individuals interested in building a custom home on their own land.  We’re here to provide you with the most concise and current information on what it takes to buy property and build your dream home.


When it comes to purchasing land, one of the first questions you might have is, “Where do I start looking for property?”  In the Charleston area, you might find websites where sellers list raw land for sale.   You can also purchase land from a builder who has already subdivided the area.   These are typically the large national or regional builders.

At Generation Homes, we prefer to work with local real estate professionals who specialize in helping buyers find vacant land and build on it.  Utilizing their expertise can go a long way toward mitigating any potential issues with the property, such as easements, coastal restrictions, and flood areas, as well as, things like ponds or creeks located on the property.

Close-up shot of female hands holding small house model on the background of defocused green nature. Real estate, mortgage, eco or country house concept
Financing Land Purchase


When purchasing raw land, buyers can pay cash, obtain financing through a consumer or unsecured loan, or buy the land with a lot loan which secured the property in the short term until the building process begins.

Most custom-built homes use a convertible construction to permanent mortgage loan. The homeowner will close once on the loan package before construction begins. At this time, the lender would pay off the lot loan or outright buy the property in the homeowner’s name and escrow the construction funds for distribution to the builder during the construction process. During the build, the homeowner typically pays interest only on the amount of money spent to date for the property purchase and funds transferred to the builder during the build.

The cost of the land and the construction of the home can vary widely, based on location, acreage, and the type of home you plan to build.  Builders are often asked to provide their price per square foot. That is like buying a car by the pound!  Many factors go into determining the price per square foot of a home including the options and features included.  Generations Homes has built homes for as little $148 per square foot to as much as $450 per square foot.  To better estimate the over all cost, determine where you want to live, the size of the homesite you want to find, and list the features and specifications of the home you’re planning.


Potential Pitfalls

Like any other real estate transaction, buying land and building your home can involve its share of challenges. The most important thing to understand is your budget. Work with your builder to determine your overall budget.  Do not forget things like fees for architects, engineers, survey and site analysis for structural ability and utilities.  Your builder should work with you to set budgets for cabinetry, plumbing, electrical fixtures and flooring among other items that substantially drive the cost of the home. Understand the contract details when choosing a builder, and make sure you are both on the same page. It is your responsibility to understand the contract, so if you do not, find a lawyer or other experienced professional to help you.

Home in Hollywood Exterior Update

Remember that patience is also a key component in successfully building on your own land. Weather issues, material shortages and other unforeseen problems can be part of the process. Expect delays. Builders will commonly give you an anticipated conclusion date, but will not generally guarantee a specific date for completion until you are further into the process.

When you buy land and build a home, it is important to find people you can trust to walk you through the process. Find an agent that understands exactly what is involved, and a good builder who will be there after closing to help with any questions or problems.

Don’t go into the process blindly because you could end up with additional expenses that you did not anticipate.  Paying the commission fees to a knowledgeable, dependable agent will save you money in the long run!