Finding your dream home in Ontario isn’t an easy task. There are a lot of steps you need to take, from scouring online listings to scoping out neighborhoods and attending open houses, all of which can make the entire home buying process more tiring and time-consuming.

The truth is maybe your dream house just doesn’t exist yet, which is why buying land in Ontario and building your own home may be the perfect option for you. In fact, you’d be surprised to learn of the various benefits that come with purchasing a raw piece of land and shaping it into anything you want.

However, before you start calling up contractors to begin the building process, there are a few things you need to understand first when buying land in Ontario. Keep reading to learn about the most important ones.

Explore the different types of land:

The first thing you need to do is explore the different types of land you can find in Ontario. In general, there are four main types of land available and they are raw land, vacant land, zoned land, and Crown land. Each of these lands has its own pros and cons which you must be aware of before you make any purchases.

For example, raw land is land that has never been developed before and doesn’t have any utilities, such as power and water. So, if you are looking to build your home from scratch, this is the right type of land for you.

Or, if you want to spare yourself from all that trouble, purchasing vacant land is a better option as it is usually serviced, and may have utilities and pre-existing developments. 

Hire a local real estate agent:   

The importance of hiring a real estate agent cannot be overlooked. After all, these people are experts at their job and will help you navigate the process of purchasing land much easier. They will know how to read aerial land maps and help you choose the right type of land that best suits your budget and preferences.

In addition to assisting you in your search for land, a real estate agent can also help you better understand the zoning laws, subdivision requirements, and neighborhood associations which are imperative to know before making a purchase. 

For instance, some municipalities have specific zoning regulations on how the piece of land can be used and whether it is designated as residential, commercial, or agricultural.

Secure your funds:

Securing your funds is another important step you need to take to buy land in Ontario successfully. There are several financing options you can consider including getting a land loan, personal loan, or a home equity line of credit. 

However, the greatest issue with getting a loan is that banks consider it to be a much bigger risk than funding a typical home sale because you don’t have much collateral. So, if you miss a few mortgage payments, you will most likely lose your land. Because of this, many banks often require higher down payment percentages and charge higher interest rates, making it more difficult for people to get their loans. 

In general, you always have the option to pay for the land using cash, a personal loan, a HELOC, or a combination of these. 

Carefully read the subdivider’s agreement:

If the land you are planning to purchase is in a subdivision, then it is imperative that you read the subdivider’s agreement.

In this agreement, you will find restrictive covenants which are specific rules you need to follow on how you can use the land.

For example, you may be restricted to using certain building materials such as brick or stone, so they will match the appearance of other units in the area or be limited to where the garage needs to be built. 

Also, be aware of any hidden surprises you may find in the agreement that could disrupt your building plans and your budget. Make sure you review the document carefully to ensure all parameters are in order. If necessary, hire a real estate lawyer to help you better interpret the fine print.  

Final thoughts:

It is no secret that buying land in Ontario can be a long process. However, if you do your research in advance on the different types of land available and all zoning and subdivision requirements, you will be able to get through the process much easier and hassle-free.

And if you need more help, be sure to refer to our post and learn everything you need to know to purchase land in this Canadian province.