DFW and buying land....ready to pull the trigger and then wait

[Kelly M.]

I would like to buy land in the DFW area, anywhere from .66 to 1 acre.  I am conflicted about whether to buy now or wait until I am actually planning to build as I do not wish to pay property taxes on the land but I am concerned the few remaining lots in the areas I am interested in (Fairview, Allen, Lucas) will be gone and\or that by the time I am ready to build (in about 18 months from now) I will be priced out of the larger lots and will have to build on something smaller.  I am a bit shocked that in Allen I can get a .3 acre lot for $275K which I think is a lot of money but I can certainly afford it.  I have never built a house before, I have no idea of the lending process of a home build, yet for something reason, I feel an urgency to buy land right now.  Am I over reacting?  Will there be no more lots in a central area in Allen in 12 months or will the $350K for an acre of land in Fairview seem cheap in 12 months?  I would like some thoughts on people with more experienced than myself on this as I do not wish to make a mistake with hundreds of thousands on the line plus being on the hook for about $7K in property taxes per year while I figure things out.

[Bruce Lynn]

My thought is you will have to pay cash for the lot or if you are lucky and have good assets and good income you might can finance 50% of it.   You will have to pay property taxes.  I don't think every single lot in those cities will be gone in 18 months.  You have to think they're not all for sale today.  They won't all be for sale in 18 months.  Lots tend to trickle in.  They other option you have is to buy from a builder who owns the lots already and sells it to you with the new home included.

Of course one thing you may want to do before you move forward is go to one of the local banks or your credit union.  This is not Wells Fargo, BofA, Chase, etc, but some one like Texas Star Bank.  See if you can get a new construction loan.  See if you can get a land loan.  Then you know where you stand and have a pre-approval letter to go shopping.  That's really the first step in the process, even before you look at lots.