Buying New Construction or Land in Massachusetts

A brand-new home, or a piece of land where you can build your own, is a dream for many families. New construction can mean modern systems, better energy efficiency and fewer surprise repairs. Buying land gives you the most control of all. But both paths work differently from buying an existing home, and Massachusetts adds its own rules about septic systems, wetlands and zoning. This guide explains what to watch for.

Part 1: Buying new construction

Types of new construction

• Completed or “spec” homes: The builder has finished the home and is selling it, much like a resale.
• Homes under construction: You buy before the home is finished. You may be able to choose some finishes.
• To-be-built homes: You choose a lot and a plan in a development, and the builder builds it for you.
• Custom builds: You own or buy land and hire a builder to build a home you design.

Use your own agent

The friendly salesperson in the model home works for the builder. Their job is to sell homes for the builder at the best price and terms for the builder. Having your own agent helps you compare the price with other new and resale homes, negotiate upgrades or closing cost help, and review the timeline and contract terms.

Builder contracts are different

Builders usually use their own contract forms, which are written to protect the builder. Before you sign, have your own Massachusetts real estate attorney review it. Key points to look for:

• Deposits: How much is due and when, where the money is held, and when you can get it back
• Completion date: What happens if the home is late, and whether you have any remedy
• Price changes: Whether the builder can raise the price for material costs or change orders
• Specifications: Exactly what finishes, appliances and features are included
• Final walk-through: How the “punch list” of unfinished items will be handled
• Certificate of occupancy: The local building department must approve the home before you can move in

Inspect new homes too

New does not mean perfect. Many buyers hire a home inspector before the walls are closed (a “pre-drywall” inspection) and again before closing. Read our guide to home inspections.

Warranties

Many builders offer a written warranty, often covering workmanship for a shorter period and major structural parts for longer. Read exactly what is covered, for how long, and how to file a claim. Massachusetts courts have also recognized an implied warranty of habitability for new homes sold by builders, which can protect buyers against certain serious hidden defects. Ask your attorney how it applies to you.

Part 2: Construction and land loans

If you buy a finished home, you use a regular mortgage. If you are building, financing works differently:

• Construction-to-permanent loan: One loan pays the builder in stages during construction, then turns into a regular mortgage when the home is done. There is often only one closing.
• Two-step financing: A short-term construction loan, then a separate mortgage after completion. This can mean two sets of closing costs.
• Land (lot) loans: Loans to buy land alone usually require a larger down payment and have higher rates than home loans, and fewer lenders offer them.
• VA construction loans: VA-backed loans can be used to build a home. VA’s funding fee for construction loans is the same as for purchase loans (2.15% for first use with less than 5% down). See our veterans guide.

Lenders will want to see the builder’s contract, plans, budget and timeline. They release money in “draws” as work is completed and inspected. Talk with a lender early. Our mortgage types guide explains the basics.

Part 3: Buying land in Massachusetts

A pretty lot is not always a buildable lot. Before you buy land, you need to know whether you can build what you want, where, and at what cost. Your offer should give you time to find out, with contingencies for the items below.

Septic: perc test and Title 5

If the land is not served by town sewer, the home will need a septic system. In Massachusetts, septic systems are regulated under the state’s Title 5 rules and by your local Board of Health, which may have stricter local rules. Before you build, an engineer typically runs soil tests, including a “perc test” (percolation test) to see how fast water drains, usually witnessed by the local Board of Health. If the soil does not pass, a septic system may be very costly or not allowed.

Water

Ask whether town water reaches the lot. If not, you will need a private well. Ask about expected well depth, water quality testing and local well rules.

Wetlands and the Conservation Commission

Massachusetts protects wetlands, streams, ponds and nearby land under the state Wetlands Protection Act. Each city or town has a Conservation Commission that reviews work in or near these areas. Many towns also have their own wetlands bylaws that can be stricter. If the land has wet areas, a stream or low spots, work may need Conservation Commission approval, and some parts of the lot may not be buildable. A wetlands scientist or engineer can map the areas for you.

Zoning

Each municipality sets its own zoning. Check with the town’s building or planning department:

• Minimum lot size and street frontage
• Setbacks from property lines
• Height limits and allowed uses (single-family, two-family, accessory units)
• Whether the lot was approved as a buildable lot, or if a variance or special permit would be needed

Utilities, access and costs

• Distance to electric, gas, cable and internet lines, and the cost to bring them to your house
• Driveway access, slopes, ledge (rock) and tree clearing
• Easements, shared driveways or rights of way that affect the property
• A current survey showing exact boundaries

Step by step

1. Get pre-approved, and ask a lender about construction or land loans if you plan to build.
2. Work with your own agent from the first builder visit.
3. Have a Massachusetts attorney review every builder or land contract.
4. For land, build in time and contingencies for perc tests, wetlands and zoning review.
5. Inspect during construction and before closing, and keep all warranty paperwork.

Ready to explore? Start a home search with new construction filters.

How Luis can help

Luis has more than 30 years of experience with residential, land and multi-family sales in Greater Boston. Our team can help you compare builders, review lots and coordinate with attorneys, engineers and lenders, in English or Spanish. Book a free 15-minute call to talk about your plans.