Purchasing bare land to eventually build your dream house is not quite as easy as purchasing an already built house. At Spring Lake Ranch we have creative ways to make land purchasing as easy as possible to facilitate all the aspects of building your dream home.

Traditional bank financing for land purchases

In Canada, traditional land purchase financing usually involves taking out a mortgage from a bank or other lender. Buyers must qualify for the loan, which requires them to provide evidence of their income, credit score and down payment amount. The interest rate and loan terms are based on the buyer’s credit worthiness. The process can take several weeks to complete and generally requires a high credit score in order to be approved. Once approved, buyers will have monthly payments that must be made until the loan is paid off. Unlike buying a home, a down payment for land purchase is often 50% of the purchase price or more!!

Flexible vendor backed financing for land purchases

At Spring Lake Ranch, we recognize the challenge of putting up 50% of the purchase price up front. Without necessarily having the home design, construction schedule, financing, and transferring the equity out of your own home while managing where you are going to live or navigating cash flow challenges that come with purchasing and building in Canada. This becomes tricky, expensive and downright overwhelming.

If you would like to get updates about vendor backed land financing opportunities at Spring Lake Ranch, please fill out the form below and we will send you our current offer.

If you are interested in this purchasing opportunity please contact us here at info@springlakeranch.ca.

When purchasing land, you need to go into the process with as much knowledge as possible. Just like purchasing a house, there are many considerations to take into account before you proceed with buying a parcel of land. With purchasing a finished home, you get what you get. When you buy land, you have the ability to fully design exactly what you need for your family and your future. Here are some factors to take into account as you choose your land.

Location

When buying real estate, as the age old saying goes, “location, location, location” is the most important component to your purchase. What does this mean? When choosing your lot you want to consider the following components such as view, light exposure, direction of back yard, front yard and privacy. If you are buying land for your home, find an area where you will enjoy living and can appreciate the surrounding area. Think parks, walking areas, stores, cafes, playgrounds, etc. Whether it’s urban or rural, you want to love where you live. 

We suggest sourcing out exactly where you want to live by taking a drive and exploring different areas. You can also do a lot of research online prior to making your decision. If you have children, then schools are important, so find an area with a top rated school. Access to amenities like; grocery stores, restaurants and recreation are also important aspects to explore. 

Equally as pertinent as the location of the land, is the community it is surrounded by. So as much as you are shopping for your perfect parcel, you are exploring your future community. What type of lifestyle does this community offer? Do you have access to recreation? Nature? Fresh air? Who will be your future neighbours? If possible, try and have a conversation with someone that lives in the area as this may be your greatest inside source of information.

Pricing

There are two areas to look at when addressing cost: comparative cost of surrounding land and the cost to develop your land. You want to ensure that the investment you are making is fruitful and attainable. 

The first step is to look at what other parcels of land in the area are selling for. You can request a comparative market analysis (CMA) from a local realtor or hop on MLS and do the research yourself. This will allow you to work with the landowner and offer the best price for the lot.

Secondly, you want to examine all of the associated costs to develop your desired plot of land. What services have been brought to property? The typical ones you will find are power, gas and phone. You will also need to look at the water source and wastewater management system for the area. If you are developing an urban lot, there will be a cost to tie into the public water and waste systems. If you are looking at a rural plot, there will be a cost for a cistern or drilling a well, a septic tank or wastewater management system.

Know the Details About Your Land

With any large purchase you make in life, make sure you do your research and ask ALL the questions. A few key aspects to examine are: zoning, building parameters and restrictions, a recent survey and soil quality. 

A great starting point is to make sure your zoning is appropriate and you are aware of any usage restrictions. This will tell you if there is protected land, easements, environmental concerns, farming caveats or the ability for commercial operations. 

Next, you want to request the architectural guidelines for the area as sometimes these guidelines are actually a caveat placed on the piece of land.  These will outline all of the building parameters and restrictions you will need to follow as you plan your future build. Having stringent guidelines is one of the best ways to protect your investment as you will have a clear picture of what will be built around you and how the properties will be used and maintained.

Financing

Many people do not realize that financing land is a very different process than financing a finished home. Typically, you need to put 50% of the land value down as a deposit and then the remaining balance can be mortgaged. When you decide to build your home, you will then usually enter a Builders’ Draw Mortgage to finance the construction phase of your home. Some banks will allow the land deposit and value to count as part of your down payment for this second phase, while others will see it as totally separate. Make sure you talk to your financial institute as well as a seasoned mortgage broker in order to know which will apply to you.

Another aspect to consider when looking at financing is your landscaping. Many communities will require that your landscaping be completed within a certain timeline and this is critical to know when planning your financing. Will you be incorporating this into your mortgage? Will you be paying for this with cash? Will you hire a landscape architect and professional landscaper to do this work or will you do this yourself? Make sure you allow enough budget to fully complete this stage of construction as it will expedite the finish line of your project and allow you to fully maximize all the benefits of your new home and the yard surrounding it.

Get Your Permits and Schedule Your Inspections

As you embark on this very exciting journey of buying your land and designing then building your dream home you will be working closely with the municipality. You will need to apply for permits for every step of the way. Be sure you begin this process immediately at the zoning and design stage. You will need a development permit, construction permit. Burning? You got it, permit. Need to install a wastewater management system? Permit. The entire construction process will need to have the proper documentation and inspections from plumbing to electrical to final occupancy. As much as all of these permits seem arduous, on the positive, they ensure that you have a completely sound structure and legal investment that will last for years to come.

Your first step is to find the perfect piece of land to call home. If you want to view the last remaining lot at Spring Lake Ranch, you can view the availability here. If you wish to speak with our team about any other tips to finding land, please feel free to give us a call.