Profile picture for Looking in Raleigh

What questions should I ask when working with a custom builder who already owns the land?

Greetings All,
I so appreciate reading the questions & responses to land first-archit/builder first questions.  I have had a dream house design in mind for several years and am just beginning to look for property, 2-ish acres, partially wooded. In my drive-around quest I discovered a property that is owned by a builder in an established neighborhood with nice houses. A retired builder friend of mine thinks highly of this builder so I met with him on site.  He indicated that my design would work on the property, since the prop'y is relatively flat. 
 
My questions are...
1. what should my questions be for him about process?  I've read the pros cons of buying land separately from house.  Liabilities of his crew working on my land, but if his insurance covers it, what other cons for me to buy land first?  
2. Should I be concerned buying the land from him without my own realtor (builder is also a realtor)
 
I'm not in a rush and do not anticipate needing a loan (hopefully makes it simpler).

Thank you!
  • July 31 2014 - Raleigh
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Answers (3)

Profile picture for Looking in Raleigh
Thank you all for your input! 
  • August 06 2014
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Profile picture for Sharon Lewis
Please use a  Realtor to represent your interests. I have worked with a many  builders in this area (Raleigh) it really is helpful to you.  , there are a LOT of things to know before and during the time you build with an independent builder.
  • July 31 2014
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1. It is simply easier if the land is included in the package to build the home. What you want in an ideal situation is for the builder to finance the construction and when the home is completed to yours and your lenders satisfaction to fund and pay off the home with your mortgage.
2. The advantage of buying the land as a direct part of the package from the dealer is simply that it is already included. This gives the builder some wiggle room based upon the appraised value of the land and your lender to adjust numbers for your maximum benefit and of course an approvable mortgage. If you buy the land for say $50k and when the appraiser comes in and appraises the land for $25k because you overpaid and you were counting on that land equity, you may have to come out of pocket for more money than anticipated as well as the potential for the loss. If the builder owns it and the land appraises light then the builder will take the loss. Far too complicated to answer here but feel free to reach out to me through my profile.
  • July 31 2014
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