How do you buy land and build a house in Texas? The steps in order

• Start with a lender who finances land and construction. They tell you which loan fits and what they need from you.
• Check the land before you buy it, not after. Legal access, power, water, sewer or septic, flood risk and deed restrictions.
• Your builder needs to see the land. What you can build depends on the lot, and site preparation costs vary a lot.
• Construction gets paid in stages. With a construction loan, money is released as work is completed and inspected.
• Last comes the homestead. Once the home is your principal residence, you apply with the county appraisal district.

1. Talk to a lender. Ask about land loans, construction loans and whether they offer one loan that covers land and construction together. If you are self-employed, find a lender who reads business income well. Do not change how you earn or how you file without talking to me first.
2. Decide what you want to build, and why. Rough size, a shop, a barn, room for work equipment. That decides how much land you need and which restrictions get in the way.
3. Search with that filter. A lot of land sits outside city limits, where the county sets the rules. Inside a city, city zoning applies.
4. Write your offer with time to investigate. A land contract should include a period to check everything before you are fully committed.
5. Check the land thoroughly. A survey and title commitment for access, easements and restrictions; FEMA's flood map; if you will need septic, a soil evaluation and what TCEQ or its authorized agent in that county requires; if you will need a well, ask whether the county has a groundwater conservation district that requires registration or a permit; and what it takes to bring power from the nearest pole.
6. Walk the land with your builder before closing. They tell you where the house can sit, what needs grading, the driveway, and how that lot changes the budget.
7. Close on the land (or on land and construction together, if your loan allows). The title company records the deed with the county.
8. Plans, budget and construction contract. The lender reviews the builder's contract and budget and usually orders an appraisal of the finished home's value.
9. Permits. Inside a city, city building permits. Outside, whatever the county requires, such as septic and floodplain development permits. Confirm with each office.
10. Construction in stages. The lender releases money in draws (foundation, framing, roof, finishes) after inspecting progress.
11. Completion and permanent financing. When the home is done, the construction loan converts to a regular mortgage or a new one closes, depending on what you chose.
12. Homestead. Once you own the home and live there as your principal residence, apply with your county appraisal district using Form 50-114.

Here's what happens next: if you want these steps laid out with dates for your situation, let's talk for 30 minutes.

There are two common ways to finance this. In one, you buy the land with a land loan (or cash) and later take out a separate construction loan. In the other, a single loan covers land and construction and converts to a mortgage at the end. Each has its own paperwork, closings and costs.

Neither is best for everyone. It depends on whether you already own land, how long until you build, and what your lender offers. What matters is knowing before you sign for the land, because it changes the order of everything else. Read more on how land loans work in Texas.

• Have you built on land outside city limits, with a well and a septic system?
• What does your budget include, and what is left out, such as grading, the driveway or bringing in power?
• How are change orders handled, and how much time do they add?
• What completion date goes in the contract, and what happens if it slips?
• Will you provide lien releases from subcontractors and suppliers with each draw?
• What warranty do you provide at completion, for how long, and what does it cover?

Get every answer in writing. If it is not in the contract, it does not count, and your lender will read that contract too. A builder who is comfortable answering these questions in writing is usually a builder who is comfortable being held to them.

• Buying the land, then shopping for a construction loan. It can work, but sometimes the lender requires things the land does not have. Lender first.
• Not bringing the builder to see the land. A slope, rock or a creek can raise site prep costs a lot.
• Assuming utilities. That used to be safe when land along the highway had everything close by. Today a lot of acreage is far from the power line and has no city water. Ask first.
• Skipping the deed restrictions. Some limit home size, animals, extra buildings or business use.
• Signing a construction contract without clear dates and draws. The contract says what gets built, when and how it is paid. Ask that the builder provide lien releases from subcontractors and suppliers as they are paid; the title company and lender review them.

Picture an engineer who wants to build a home with a separate office and a workshop for her projects. She started with the lender, who explained both ways to finance and which income documents they needed.

Then she looked at land outside city limits. On the one she liked, the survey showed a utility easement right where she wanted the house, and the soil evaluation showed which kind of septic system would work. Her builder adjusted the house placement before she closed on the land, not after. This is an example, not a real client; every lot, loan and build is different.

On the moves Veronica Yeary guides in Dallas-Fort Worth, the land gets reviewed with the lender and the builder at the same table, before anyone signs.

• Which loan you are offered: land only, construction only or both together, in writing.
• Access, easements and restrictions: on the survey and the title commitment.
• Flood risk: FEMA's official map, and read why almost nobody checks it.
• Septic: TCEQ or its authorized agent in that county.
• Water: city water, a water supply company or a well; and whether the county has a groundwater district.
• Taxes and districts: the appraisal district's list of taxing units; in a new subdivision, read how MUDs and PIDs work.
• Your business income: read what to sort out first.

This is not legal or loan advice: your lender and title company confirm your situation.

What comes first, the land or the loan?

The loan, or at least the lender conversation. The lender tells you what kind of land they can finance and what construction will require. That way you do not buy land that does not work for the loan.

Can I buy land now and build later?

Yes. Plenty of people buy land first and build years later. Check from the start that you can actually build what you want there, with utilities and permits.

How does a construction loan pay the builder?

In stages, called draws. The lender releases money as work is completed and inspected. When the home is finished, the loan converts to a regular mortgage or a new one closes.

Do I need a permit for a septic system in Texas?

Yes. Septic systems are permitted by TCEQ or its local authorized agent, often the county. They review the design and inspect the installation.

When do I file for homestead if I build?

Once you own the home and live there as your principal residence. You apply with your county appraisal district using the Texas Comptroller's Form 50-114.

Before you buy the land, let's put the steps in order for your situation: loan, land, builder and dates. Thirty minutes, no commitment.

Let's talk for 30 minutes about your situation, not houses: veronicayeary.com/en/book

Call or text 469-441-8890 · veronica@veronicayeary.com