Every home built needs a developed lot.

What is lot development? Lot development includes all the work necessary to take a piece of land and turn it into a home site. Every lot is different, so the work required varies with each lot and is dependent on many factors.   Typical lot development items are listed below. Though we offer assistance on some of the services listed, we hope you find this helpful when planning your lot development budget.


Permit costs and requirements differ significantly in different areas. The list of permits required, aside from well and septic, usually includes Zoning and Building. Zoning and Building permits are typically based on the square footage of your home. Keep in mind that some areas may also require additional permits or fees, such as Driveways, Street Numbers/Addresses, DESC (Site Grading and Runoff), Occupancy, Architectural Review, Park Fees, etc. It is often difficult to determine the costs for your permits at contract time because localities frequently change fees and requirements.

Septic System/ Sewer Line

Is a municipal or shared sewer system available, or has the local Health Department approved the property for a septic system? What are the fees for connecting to the sewer system? We strongly recommend contacting your local Health Department or municipality for a site evaluation in the early stages of the building process to obtain the type of wastewater system required for your property. (If you have not purchased land yet, this information is critical.)

To budget for a septic system, you should obtain a written quote from a qualified installer, and your budget should include the system’s price, test holes, soil surveys, system design, inspections, and permits. Depending on lot conditions, county requirements, and the number of bedrooms in your home, systems can range from $5,000 to over $20,000.

Construction Driveway

The construction driveway is the main artery for access to your project. Many heavy trucks will be running over your drive delivering anything from concrete to kitchen cabinets. Therefore, the driveway and culvert must be durable and accessible. American Heritage Homes requires your driveway to (1) run within 2 feet off the staked foundation at the garage door opening, (2) have adequate flares at the road to allow for turns, and (3) have a culvert of at least 30 feet. Builders typically review your specific construction driveway needs at your lot walk. When budgeting for your construction driveway, keep in mind that funds for driveway maintenance (repairs, snow plowing, etc.) during construction are often homeowner responsibilities.

Well Drilling/ Tap Fees/ Water Lines

If you have a private well, you will need to cover the costs for a well permit, installation of the well, well testing, a pressure tank, installation of the pressure tank, the circuit from well to basement, and all other associated components. Your budget should also include water softeners, filters, and installation fees. If you have access to city water, include any tap fees, fees associated with moving the waterline from tap to the basement, and the water meter installation into your budget. In addition, some water systems require a thermal expansion tank or a backflow prevention device. Check with your water company for more details.

Site Survey and House Staking

Many localities require a plot plan by a surveyor showing the house’s location and other project items. Especially in subdivisions or small lots, the house needs to be staked by a surveyor. Also, in some locales, the surveyor must come back and certify the foundation is in the right place and has the proper elevation.

Electric and Gas Trenching, Cable Laying and Utilities

Utility requirements vary greatly based on your site, distance from the road, electric company, gas company, propane company, etc. Typically, your builder will provide a temporary pole and box for construction power and the permanent electric meter base when it comes to electricity. However, you are responsible for getting the permanent power cable to your home. Usually, this is underground, and the electric company provides the service for a fee. If underground power is not an option, overhead service is your next option and often requires the installation of additional components. As far as natural gas goes, it is the landowner’s responsibility to apply for a natural gas hookup and the tap fee, installation of gas line and tracer wire, flexible riser, and meter mount. A licensed installer must install the meter mount. You should also include the anticipated cost of utilities during construction in your budget.

Downspout Conductors

Downspout conductors are underground pipes that allow water from your downspouts to be directed away from your home. These are important for properly managing the downspout water and maintaining your basement waterproofing warranty. If you are building in a subdivision with curbs, the conductors usually need to drain to the road through curb cores. Funds for the trenching, piping, and curb cores should be budgeted.

Owners All Risk Insurance

The overall liability for your property resides with you, the owner of the property. We recommend that you carry full liability coverage, often referred to as All-Risk coverage, for your property throughout construction. Usually, this is included in your current homeowner’s insurance. However, please follow the advice of your preferred insurance professional in this case. As the builder, we provide a Builder’s Risk policy for the home’s construction and confirm that everyone working for us on the site is covered by liability and Workers’ Compensation insurance.


At American Heritage Homes, we provide a dozer final grade with a positive slope away from the foundation using the dirt excavated from the basement and footing areas for fill. If extra fill dirt or topsoil is needed at the site for any reason or dirt needs hauled away from the site, the cost to purchase, move, spread or load the solid is included here. Your final grade will be as good as a bulldozer can reasonably get, and during rainy seasons, the grade will not be as good as during dry seasons. This grade is not meant to be a final seed grade. You or your landscaper need to provide the final seed grade before planting grass or shrubbery. You should expect to move some dirt closer to the foundation, especially in tight corners. Include money for any shrubs, trees, or hardscape (pavers, etc.) here as well.

Miscellaneous Site Conditions

You should also budget for unforeseen challenges in your lot development costs. These funds may or may not need to be used. However, typical uses of these funds include concrete pump truck fees when the concrete trucks cannot get around your excavation to pour footers, walls, or floor. Having to reroute field tile or poor soil conditions are other common challenges. Also, extra fill gravel for porches and garages is typical of these funds.

Finish Driveway

You might want to include money for at least a walkway from your drive to your front porch or stoop. If building in a subdivision, driveways (concrete or asphalt), walkways, and sidewalks are usually required.