Key Takeaways

• Buying land in Colorado requires careful planning around zoning, water rights, permits, and utilities.
• Working with a builder early in the process can help avoid costly mistakes.
• Financing, soil testing, and title research are essential steps before closing.
• Different intended uses (e.g., guest houses, barns) may affect what land is suitable.
• Not all land comes with water rights in Colorado, especially in rural areas.
• Site readiness and legal checks (like surveys and title searches) protect your investment.

Let’s say that you’ve long dreamt of building a custom “home on the range” with exquisite mountain views. Your dream envisions a unique custom home distinct from those found in many Colorado Springs’ cookie-cutter neighborhoods, and one designed to offer all the amenities your family desires for exceptional household living. You now have the means to start considering prime home site locations and are ready to purchase any lot that fits your vision.

However, buying land in Colorado isn’t as straightforward as you might think. Before you rush out to buy a building lot and hire an architect, you should familiarize yourself with the state’s land buying process and understand potential pitfalls and complications that can arise when purchasing land for home building in Colorado.

With 35 years of experience helping folks build their dream homes in Colorado Springs, El Paso County, and beyond, Murphy’s Custom Homes is intimately familiar with the intricacies involved with the state’s land purchases. Here’s what you need to know about buying land in Colorado, including answers to common land purchasing questions you may have, as well as some you might not have considered.

From Dream to Dirt – Starting the Process

If you ask us, “How do I buy land to build a house?” we’ll respond that the process begins with your homebuilding vision. Before looking for land in Colorado to build on, you must know some distinct relevant details, such as home size, style, and family lifestyle goals. Absent that information, it’s much harder to narrow down optimal lots that would be perfect for your custom home.

We’ve had many prospective clients ask us if they need to buy land before working with a home builder. These clients are often surprised to learn that working with their chosen home builder before purchasing a lot can help them save time and money. A home builder who understands your custom home vision and lifestyle desires can prove invaluable in evaluating potential lots and performing soil testing and site plotting to ensure the property is perfect for your dream home before you commit to purchase. Those who don’t work with a home contractor before a lot purchase sometimes discover that their chosen land may not meld perfectly with their vision or have inherent limitations on what they can build on the property.

Colorado Isn’t Like Other States – Land Laws That Can Affect Your Dream Home

When out-of-state prospective clients ask us, “What are Colorado water rights, and how do they affect land ownership?” we know they’ve done some Colorado land buying homework. We’re further impressed when they ask about county zoning laws and other potential restrictions and permitting issues that may impact their dream home vision. Let’s look at how these can affect your homebuilding options.

In Colorado, water is a public resource with usage rights separate from land ownership. These usage rights are governed by a “first-in-time, first-in-right” policy that may prohibit or limit a new landowner from accessing the property’s available water. Land buyers who do not conduct due diligence research on these rights before purchase are sometimes shocked when the Colorado Division of Water Resources denies their well-drilling permit because area water rights have already been allocated to senior water rights holders. Thus, it’s crucial to ensure that any prospective lots include deeded water rights or an existing well permit, a task Murphy’s Custom Homes helps their clients do.

Once a potential property passes the water availability hurdle, you’ll need to assess how zoning laws may affect what you can build on the land. Zoning rules vary among the Colorado Springs-area counties, but they all dictate the property’s intended use, as well as the type, size, and location of structures that can be built on them. Along with fundamental zoning issues, property development may face restrictions based on design guidelines, view corridors, building heights, setback rules, and wildfire mitigation requirements. If your prospective lot is located within a neighborhood regulated by a homeowner’s association (HOA), you may face further restrictions relating to architectural and groundskeeping styles.

Behind the Scenes – What You Don’t See on a Lot Tour

Many of our homebuilding clients ask us whether they need a land survey before purchasing property, and what other inspections they should conduct before closing the sale. We inform them that they should always perform a survey, title search, and soil/percolation testing before purchase. A survey verifies the property’s boundaries, identifies easements that could limit property usage, and reveals topographic features like flood zones, slopes, or drainage that could impact construction and building design. A title search confirms that the owner legally owns the property unencumbered by liens or other claims and has the full right to transfer it to a buyer. Soil testing identifies characteristics that could affect foundation stability. In contrast, Percolation testing determines how effectively the soil can absorb and treat wastewater from a septic system, which is essential for those building on land not connected to a municipal sewer system.

Last, prospective property buyers in Colorado need to assess the lot’s access to water, electricity, sewer, and high-speed Internet. While a septic system may overcome the lack of municipal sewerage, the accessibility of the other utilities can significantly impact a homebuilding project’s budget and timeline.

Budgeting, Financing & Building Timelines

If you work with a Colorado home builder like Murphy’s Custom Homes before making your property purchase, they can also help you with figuring out financing, budgeting, and construction timeframes. When it comes to financing, many of our clients ask whether they can finance land and construction together. Builders like us who work closely with lenders know that the answer is yes, and that construction-to-perm loans help streamline the financing process for both the land purchase and construction. By combining the two loans, clients lock in mortgage rates and reduce closing costs and other fees. The loan covers the land purchase, and amounts used for construction are only charged interest when drawn. Once construction is completed, the loan converts to a traditional mortgage at the previously established rate.

About construction timeframes, numerous variables dictate the pace of the project. Still, your homebuilder should be able to establish decent estimates once they are familiar with the property and project scope. On average, a home built in the Colorado Springs area takes nine to 14 months after breaking ground, though outstanding design, permitting, and property prep work can extend this timeframe by three to six months. However, know that bringing your chosen home builder into the process early helps ensure a smooth and timely construction pace.

Let a Custom Home Builder Help You Buy the Perfect Land

An experienced home builder can prove invaluable in helping you purchase the perfect property for your custom dream home in the Colorado Springs area. Not only can they help you avoid common pitfalls with Colorado land purchases, but by bringing them into the homebuilding process early, they can turn your dream into a reality faster and with fewer complications.

Murphy’s Custom Homes has established a distinguished record of navigating their clients through the homebuilding process from property purchase to final inspection, and delivering them the homes of their dreams. Delivering quality home building in Colorado Springs and surrounding Home Range counties, you can contact us by telephone at (719) 488-8818, our online contact form, or by filling out our free Cost Estimating tool.

FAQ: Buying land in Colorado

How do I know if land is buildable in Colorado?

Determining whether a parcel is ready for your dream home starts with a few key checks: confirm the zoning allows residential construction, verify access to utilities or a viable well site, and ensure the soil is stable enough for a foundation. Don’t forget about legal access; your future home will need a road or easement to get to it. Partnering with a builder or experienced land specialist early on can save you from costly surprises and help you spot opportunities others might miss.

Do I need a septic system, or is sewer available?

It all depends on where your land is located. In more rural areas, a septic system is the norm, while properties in or near established neighborhoods often have access to city sewer lines. If you need a septic system, a percolation (“perc”) test will determine how well the soil can absorb and filter wastewater, an essential step before building.

What is the difference between water access and water rights in Colorado?

Water access means the ability to physically obtain water (via well, city, etc.). Water rights are legal entitlements to use that water, significant for wells or irrigation in Colorado’s prior-appropriation system.

What’s the best county to buy land in for a custom home near Colorado Springs?

Popular options include El Paso, Douglas, and Teller counties—each with its own personality. El Paso offers easy access to city conveniences, Douglas boasts upscale communities and scenic foothills, and Teller delivers mountain views and privacy. The “best” choice comes down to your priorities: budget, commute time, lifestyle, and the type of setting you want to come home to every day. We can build wherever you decide to buy, but it’s worth considering how each county’s location, infrastructure, and vibe align with your vision for your forever home.