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Buying Land and Building

I work for Thunderbird Real Estate, and we are the land agency in Santa Cruz County. Any brokerage can sell land, but we do the lion's share in the county. Many people contact me at Thunderbird with the idea they can save money by buying land and building a house on it. Most folks are looking for land going for $100,000 or so. However, any piece of land in this price range will require a substantial amount of development before it can be built on - perhaps another $100,000 or $200,000 on top of the initial purchase price. Or, you can buy some land in the $300,000 range that's ready-to-build. But land loans require 30% down - you will need $100,000 cash (typically, unless there is owner financing) to buy a $300,000 piece of land. Building a house costs around $150 per square foot - perhaps $200 per square foot for a challenging site and/or higher quality materials or amenities. Yes, you can put a manufactured/mobile home on some land, and you can even do a yurt - but the county will require all the other things a house needs, such as a well, septic system, good road for emergency vehicles, etc.

In summary, buying and building is definitely an option...for people with a lot of money to put into the project. If you've only got a little bit of cash, buying a pre-built structure is definitely the most practical path towards home ownership.

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