Well... You need to find some land! If everything does not fall into place as far as finding the land and being ready to build on it right away, you can get a "lot loan" from the bank that will pay for just the land. It is easiest to start figuring out a house plan once you have a lot, but it never hurts to at least make a list of your needs/wants in a house in the meantime. So, you have a lot, then you need to either start searching stock house plans or see an architect and have a house designed specifically for you (you can always find a stock plan then have it modified by an architect, something that is usually more cost effective than having one designed from scratch). Once you have a plan chosen then you will need to get bids from builders to give you an idea of how much it will cost to build your house. Or, if you are going to build it yourself, you can take your house plans to the local lumber yards or subcontractors you would use. Once you have all of your construction costs you can then go back to the bank and get a constructin loan. The bank will probably put the remaining balance from your lot loan into your construction loan. The bank will probably want your contract with the builder that you chose and need copies of your house plans. Also, our bank needed either proof that we had sold the house(s) that we currently owned or proof that we could afford to keep them plus this new mortgage payment before they would give us our construction loan...

That is a fairly basic rundown! I hope that it helps, but if you need more details this is definitely the place to ask!

This is easy. Assuming you have the downpayment money, look for land. When you find a piece of dirt that you want that is within your price range, make an offer with a financing contingency. Typically, it will say that you will make a good faith offer to obtain financing, and if you can't get it, you get your money back and the offer is null and void.

Any half way decent real estate agent will know how to do this. If he or she doesn't, run and find one who does. The process is routine.

Thank you both for your help in this...I have been emailing back and forth with an agent, but we aren't planning on doing this til early next year at the earliest, so just in the research/looking around phase now...but I will talk to her about the financing contingency...thank you!!

Any offer for land should have the water and septic contingencies satisfied first, then the finance contingency. Doesn't do you any good to have a $500K financing for a house on land that doesn't perk. Take good look at the availability of amenities before even making an offer -- that lovely lakeside lot might be 20 miles from a fire station [which would make your insurance rates high].

Keep in mind that the more you can provide for downpayment, the happier banks are to loan. 20% used to be okay, but nowadays it takes 30% to make most loan officers smile happily. (That's 30% gross -- cost of lot plus cost of house, and possibly plus cost of landscaping)

Also keep in mind that appraisals consider the neighborhood as well as the house planned. If you want to put a $500K house in an area that has nothing but $200K houses, your house is going to be considered a white elephant and unlikely to get its cost back should selling be necessary, which something any good bank officer thinks about, and they aren't going to willingly invest in anything that isn't a sure bet to be cost effective in the event the applicant defaults. (A lot of loan officers who overlooked that basic are now in hot water due to foreclosures and mortgage defaults.)

In general, buying land long distance is problematic. Real estate agents are genius at taking photos and writing descriptions that emphasize the positive, while never mentioning the negatives. If the buyer doesn't know the area, it can be a real disadvantage.

Trying to satisfy contingencies in a serial versus parallel manner can run you out of time. If water contingecy means drilling a well and not coming up with a dry hole, the process could take weeks or more, depending upon the time of year and how busy the drillers are. Most sellers will balk at giving more than 60 days to satisfy all the contingencies. Some won't go over 30, although you can usually talk them into 45.

I would suggest trying to get the ball rolling on all the contingency items as soon as the contract is signed.

Yes, the long distance thing has been an issue. We were up there in May and looked at several lots - it's amazing how good some photos can look. :-) We do know the area well, thankfully, so I can narrow down the good/bad, but then it comes down to the individual lot.

There are some lots that have been cleared and a lot of the site work is done (driveway, electric, phone at lot) and there are even a few with municipal water/waste, but who knows if they will still be available when we are ready to purchase. But we will go up a lot more frequently when the time gets closer so we can be on hand for the details.

The well is one issue that I'm most nervous about - we are planning on doing geothermal, so a well is required, but asides from seeing what the surrounding wells are like, there is no other way to determine if it will have enough water. Or so I was told by one builder! :-)

Talk to all the drillers you can. Get their sense of the area you plan to build in. Geothermal does not automatically require a well. You can also do ground or pond loops in some cases.

As one who has paid for several wells in different areas, I do agree with the builder. Nearby wells can give "a feeling" but no guarantees. For example, I have one 100' well which gives clear, sweet, artesian-like water @ 40 gpm; new owner across the road -- about 200 feet from my well -- had to have 3 wells drilled before hitting water at 250'. And his water is sulfurous which will require treatment before use. So in his case, you can't even go by what the neighbor gets.

OTOH, if you are willing to pay for a deep enough well, you can find water almost anywhere. The key words are "pay" and "deep". I'd ask local well-drillers for their opinion as being more informed than a builder's, but it is still just a guess. Wells fall into the earth-moving category where you won't know how much it will cost for what you get until you get it.

BTW, frog-hopper ~ the only time I had water written into the contingency clauses was in a case of a new subdivision, and thankfully so as it turned out that the developers were not able to hook into the municipal source. Other buyers were stuck with a waterless lot or with paying big bucks for a well, while I was clear. It's probably silly of me, but in towns and subdivisions I expect water to be provided; but with rural acreage it's my choice to take a chance on the welldiggers. However, perc is perc and is always written as a contingency; and no-pass perc is a no-go for me.

I one bought a house without a good domestic water source. They were pulling drinking water directly out of a river with a jet pump. Nobody could figure out how they got a loan to build the place, but they must have as it had a sizeable mortgage.

I bought the place with financing and well contingencies. Getting everything done was like pulling teeth, but somehow it all happened. Most of the credit goes to the real estate agent I used for that transaction. She would not give up.

I would not do it again.