The land-buying process in Texas requires careful planning, due diligence, and an understanding of local laws and regulations. In this guide, we’ll walk you through the major steps, key considerations, and what to know when buying land and constructing a house in Texas.
A Detailed Guide to How to Buy Land and Build a House in Texas
Building your dream home in Texas starts with finding the perfect plot of land. Whether you're looking for rural property or a lot in a developed area, the Lone Star State has plenty of options!
The land-buying process in Texas requires careful planning, due diligence, and an understanding of local laws and regulations. In this guide, we’ll walk you through the major steps, key considerations, and what to know when buying land and constructing a house in Texas.
Step 1: Determine Your Budget and Financing Options
Before beginning your search, it’s essential to understand your budget and financing options. Buying land requires different loans than purchasing a house. Here are the most common options:
- Land Loans — A land loan is used specifically to purchase land. Since lenders consider land loans riskier than home loans, they typically require higher down payments and have higher interest rates. Be prepared to make a 20–50% down payment on raw land or rural property.
- Construction Loans — If you're planning to build immediately, consider a construction loan, which allows you to finance both the land purchase and the home construction. After the house is built, the loan can be converted into a traditional mortgage.
- Owner Financing — Some sellers offer owner financing, which allows you to pay the seller directly over time without working through a traditional lender.
It’s wise to speak with a lender early on to get pre-approved for financing, which will give you a clearer understanding of how much you can afford.
At Beachside in Palacios, TX, we only require a 10% down payment for land loans, making it more affordable compared to traditional land loans. Additionally, our lots are priced significantly lower than those of our competitors, making homeownership more attainable. About 30% of our clients even pay cash for their land, reducing their financial risks for future construction financing.
Step 2: Research the Local Market and Browse Listings
Texas has a wide variety of land, from rural acreage to undeveloped lots in residential areas.
Start your search by browsing listings online or working with a real estate agent familiar with the local market. The type of land you choose will depend on your needs — whether you want recreational land for horseback riding, property to raise cattle, or a site for your dream home. Key factors to consider when buying land in Texas include:
- Location — Whether you want rural land or a house in a neighborhood closer to town, location is crucial. Consider how close the land is to schools, amenities, and your workplace.
- Land Costs — Prices vary significantly based on location and land features. Rural property is often more affordable, but you may need to invest in utilities and infrastructure.
- Property Taxes — Texas has no state income tax, but property taxes can be high. Research the local tax rates before committing to a purchase.
Beachside offers exclusive waterfront properties in a gated community in Palacios. Here, you’ll find a community center, private fishing piers, and private beaches, all within a residential neighborhood - ideal for building your dream home.
We’re not offering rural land, but rather a developed community with access to amenities and a serene coastal lifestyle.
Step 3: Understand Zoning Laws and Deed Restrictions
Before you make a land purchase, it's important to check the zoning laws and deed restrictions for the property. Zoning dictates what can be built on the land (like a residential, commercial, or agricultural building), while deed restrictions limit what you can do with the property. For example, some rural properties may allow you to raise cattle, while others might restrict livestock or impose HOA rules.
Texas zoning laws can vary by county and city, so consult with local officials to understand what’s permitted on your land.
In Palacios, Beachside is zoned for residential use, and our team is here to guide you through community rules and deed restrictions before you make a purchase. Beachside does not have an HOA; instead, we have a Property Owners Association (POA), which means fewer restrictions and much less hassle. Plus, the POA maintains our community amenities, so you can enjoy a well-kept neighborhood with lower overall costs.
Step 4: Conduct Due Diligence
Once you’ve found a piece of land you’re interested in, it’s time to conduct thorough due diligence. This step is critical to avoid costly surprises down the line. Here’s what you need to look into:
- Utilities — Confirm access to electricity, water, and sewage systems. Rural or undeveloped land may lack these utilities and require significant infrastructure investment.
- Environmental Issues — Get an environmental assessment to ensure the land isn’t contaminated or dealing with unresolved issues, such as old oil wells.
- Flood Plains — Check if the land is in a flood plain. If so, this could affect your ability to build and may increase insurance costs.
- Mineral Rights — In Texas, it’s common for landowners to sell off mineral rights separately. Learn whether you own these rights or if someone else can extract oil or gas from your property.
At Beachside, you can skip many of these concerns. Our community is already developed with underground city utilities and infrastructure, and we’ve already addressed floodplains and environmental issues. Buyers can focus on building their dream homes without worrying about these obstacles.
Step 5: Make an Offer and Negotiate the Purchase Price
Once you’ve completed your research, you can make an offer on your Texas land. Work with your listing agent to submit a formal offer through the Texas Real Estate Commission. Be prepared to negotiate the price, especially if buying land in a competitive market.
Your offer should include key details like the purchase price, down payment, closing date, and any contingencies such as securing financing or passing a property inspection.
Beachside requires only a 10% down payment, which is considerably lower than the 15%–50% typically required for land purchases elsewhere. Additionally, because you're buying directly from the developer, our land sale model and low pricing removes the hassle of back-and-forth negotiation, ensuring you get the best value without haggling.
Step 6: Secure Title Insurance and Close the Deal
Next, you’ll enter the closing process. You’ll secure title insurance and make sure there are no legal issues with ownership. You’ll also finalize your financing and complete any necessary inspections.
At closing, you’ll pay the closing costs, which can include loan fees, title policy costs, and taxes. After the closing date, you officially own the land and can start to plan your build.
Step 7: Plan and Build Your Home on Texas Land
Now that you own the property, you can start planning your dream home! Here are some key considerations to think about before starting with the building process:
- Building Codes — Ensure your home design complies with local building codes and regulations.
- Utilities — If the land is undeveloped, you may need to install water lines and connect utilities.
- Agricultural Exemption — If you’re using the land for farming, ranching, or recreational property, you may qualify for an agricultural exemption, reducing your property taxes.
Work with an experienced builder to ensure your home meets your needs and budget. Be sure to factor in potential delays, changes in land costs, and other unexpected expenses.
Beachside’s homes are built to strict wind shear specifications and are designed on pilings, which provide extra space, better views, and reduced insurance costs. With city utilities already in place, you can skip the complications of undeveloped land and focus on creating your dream home.
Build Your Dream Home with Beachside in Palacios, Texas
Owning land and building a home is a rewarding process, and buying land in Texas is an especially great investment. The state offers spacious lots, abundant recreational opportunities, and a low cost of living.
If you’re looking to build a house along the Texas Gulf Coast, consider joining us at Beachside in Palacios. With access to recreational land, beautiful waterfront lots, and a welcoming community, Beachside is an ideal location to build your dream home. Whether you're interested in purchasing land as an investment or are ready to build right now, we can help you navigate the entire process and find the perfect spot.
Take the first step in owning your piece of paradise! Book a tour of Beachside, and start planning your future in Palacios, TX.