How to buy vacant land and build a house | Olympia, WA

https://www.co.thurston.wa.us/permitt... and go to Geodata Maps.

When researching vacant land, look for:
What is the zoning of the property?

Are there easements? Usually there are utility easements, which is very common but check to see how you would access the property. Does it have its own access from a public road or would the property need (or does it already have) an easement for access?

Are there homeowner association rules and restrictions (CC&Rs)? The CC&Rs will outline the size and type of home that can be built and to what standards.

Is the parcel located within a city’s limits? You'll also need to go to that city’s planning department.

Thurston County has many environmental concerns that affect building such as preserving fish and wildlife habitat areas, wetlands, and bodies of water. Many require a buffer or a setback, which can shrink the building envelope of a parcel. Many buyers of vacant land assume they can use and develop every inch of the property. In many instances, this isn’t the case due to the protection of these critical area and/or the required setbacks. Critical Areas (can be found on Geodata Maps) and are:
Important fish and wildlife habitat areas
Wetlands
Critical aquifer recharge areas
Frequently flooded areas
Geologically hazardous areas like bluffs and slopes

How to Finance Vacant Land?
If paying cash for the land isn’t feasible, you can get a construction loan to purchase the land.
Construction loans are temporary. 
Not all lenders offer construction loans. 
Construction loans require that you have a builder, plans and a cost sheet and budget as part of your loan application.
Construction loans are risky for banks because for one, there is no collateral.
Typically, borrowers can expect to put down 20-30% (you cannot do a 0% VA loan, for example);
the interest rate is usually higher than it is for an existing home loan;
many lenders require the water to be on the property. This means if you have to drill for a well, that is an out-of-pocket cost and not part of the loan.
Construction loans are temporary. For example, your lender may offer this construction loan for 12 months. At the end of 12 months, the home is to be completed. At that time, your loan is then converted into a standard home loan.  
For some lenders, the construction loan and the conversion to the permanent loan is a two-step process meaning you could pay two sets of closing costs. Other lenders offer a one-step construction loan process where it automatically converts to a permanent loan without additional closing costs. There are pros and cons to each. 
Construction loans are interest-only and the monthly payment increases as the project nears completion. 
Understand how draws are handled, who approves them, when they are paid out.
Ask how cost sheet line items that come in over the cost are handled, and likewise, how are credits handled?  Can you apply credits to other line items?

Many buyers are unaware of the costs to build. Although you may be getting a loan, many costs are not included in the financing:
Utilities
Feasibility Studies – Geotech engineering, prairie land studies, septic perc test
Surveys
Mitigation/impact fees – for schools, parks, transportation, etc.
Loan costs
Construction overruns
Items not included by your builder or outside of the cost sheet like a driveway, landscaping, fencing.
If the home doesn’t appraise, you will be required to cover the difference

These things can add up quickly add up and can easily get to a six-figure cost.
If buyers do not have substantial cash reserves, building may not be the best option. 

Cost Sheet
The cost sheet that the builder prepares will outline the costs for each step of the build.  You’ll want to know if the lender will pay out draws based on invoices? Or just what the line item is for? 

Builders may skim, meaning the line item for a roof may be $25,000 but it actually only cost $18,000. The builder may pocket that $7,000 as his profit.

What to do During your Feasibility Period?
This feasibility time is meant for the buyer to determine if the property can be built and developed as the buyer intended.

The most common professional consultations needed are:
City/county planners and inspectors
Prairie plant/pocket gopher inspector
Geotechnical engineer (for slopes, evaluating landslide hazards, etc.)
Surveyor
Septic designer
Well driller
These will be inspections at the buyer’s cost. 

Septic Systems
If the property will need a septic system installed, a septic system designer will evaluate the soil to determine if and what kind of septic system would be suitable.

Drilling for Water
The biggest risk for many buyers is determining if there was water. To minimize the risk, look up well logs for neighboring homes (ecology.wa.gov) to see how far they had to drill, how much water they found and at what pressure.

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