What Is a Feasibility Study? Understanding the Critical Step Before Building on Your Lot

You’ve found it. The perfect piece of land where you’ll build your dream home. The location is ideal, the size is right, and you can already picture where the house will sit. You’re ready to make an offer.

But before you get too excited, there’s a critical question you need to answer: Is it actually feasible to build here?

That seemingly simple question—”Can I build on this land?”—is more complex than most first-time land buyers realize. And getting the answer wrong can cost you tens of thousands of dollars, months of delays, or even force you to walk away from a property you’ve already purchased.

This is where a feasibility study comes in.

What Exactly Is a Feasibility Study?

A feasibility study is a comprehensive evaluation that determines whether a specific piece of vacant land can support the construction of your intended home. It’s the process of asking—and definitively answering—the question: “Is it feasible to build what I want to build on this particular lot?”

Think of it as a deep investigation into everything that could make or break your building plans:

Can the lot handle a septic system, or is sewer access available?
Is electricity readily accessible, or will it cost $50,000 to run power lines?
Where does water come from—well, municipal, or something else?
What do the local building departments and county regulations say about what can be built here?
Are there wetlands, easements, or environmental restrictions?
What about soil quality, drainage, and slope?
Are there any hidden deal-breakers lurking beneath the surface?

The feasibility study is not just a nice-to-have. It’s the essential step that protects you from buying a piece of land that looks perfect but can’t actually support your building plans.

Why the Feasibility Period Exists in Land Purchase Contracts

When you write an offer on vacant land, your purchase contract should always include a feasibility contingency period (sometimes called a due diligence period or inspection period).

Here’s how it typically works:

The Contract Timeline

Offer Accepted: You and the seller agree on price and terms
Feasibility Period Begins: Usually 30-60 days (sometimes longer for complex properties)
Investigation Phase: You hire experts to evaluate the buildability
Decision Point: At the end of the feasibility period, you either:
- Accept the feasibility (move forward with the purchase)
- Negotiate with the seller to address issues
- Walk away and get your earnest money back

This contingency period is your safety net. It allows you to invest time and money into professional evaluations without being locked into buying a property that won’t work for your plans.

What Makes It Different from Buying a House

When you buy an existing house, you get a home inspection. The inspector looks at what’s already there—the roof, the foundation, the electrical system.

When you buy vacant land, you’re investigating what could be there. You’re not inspecting a structure; you’re evaluating potential. That requires a completely different set of experts and a much more complex investigation process.

What Does a Feasibility Study Actually Involve?

A comprehensive feasibility study examines multiple critical factors. Let’s break down each component:

1. Septic System or Sewer Access

Why it matters: Every home needs a way to handle wastewater. Your options are typically municipal sewer hookup or a private septic system.

What’s evaluated:

If sewer is available: Distance to the sewer line, hookup costs, capacity fees, permits required
If septic is needed: Soil percolation tests (perc tests), property size requirements, topography considerations, environmental restrictions

Potential issues:

Soil that doesn’t percolate well enough for septic
Property too small for the required septic system and setbacks
Sewer connection costs that add $20,000-$50,000 to your budget
Environmental regulations that prohibit septic in certain areas
Seasonal high water table that prevents septic installation

Real-world example: A beautiful wooded lot might have heavy clay soil that fails the perc test, making it impossible to install a conventional septic system. Alternative systems exist but can cost 3-4 times more than standard septic.

2. Electricity Access and Utility Hookups

Why it matters: Your home needs power. The question is how much it will cost to get it there.

What’s evaluated:

Distance from the nearest power pole to your building site
Whether lines exist on the property or need to be run
Voltage availability (some rural areas may need transformers)
Utility company requirements and timelines
Underground vs. overhead installation costs

Potential issues:

Utility company requires you to pay $30,000+ to extend power lines
Easement negotiations with neighbors to run power across their property
Remote locations where solar + battery storage becomes more cost-effective than grid connection
Long wait times (6-12 months) for utility company to complete the work

Real-world example: A lot that’s only 500 feet from the road might seem close, but if power needs to be run underground through rocky terrain, installation costs can exceed $50,000.

3. Water Source

Why it matters: Safe, reliable water access is non-negotiable.

What’s evaluated:

If municipal water: Connection availability, tap fees, pressure requirements
If well water: Drilling depth estimates, water quality considerations, flow rate expectations, well drilling regulations

Potential issues:

No municipal water available and well drilling costs $15,000-$30,000
Water table so deep that drilling becomes prohibitively expensive
Water quality issues requiring expensive filtration systems
Shared well agreements with neighbors that complicate financing
Seasonal water availability concerns in drought-prone areas

Real-world example: In some areas, wells routinely need to be drilled 400-600 feet deep, costing $25,000-$40,000. If the feasibility study reveals this cost upfront, you can budget accordingly or negotiate with the seller.

4. Building Department and County Requirements

Why it matters: Every jurisdiction has specific rules about what can be built and where.

What’s evaluated:

Zoning regulations and permitted uses
Setback requirements (how far from property lines you must build)
Building codes and construction standards
Permit requirements and timelines
Architectural review board approvals (in some communities)
Impact fees and development charges

Potential issues:

Zoning doesn’t allow residential construction
Setbacks so restrictive that your planned house doesn’t fit
Building moratoriums preventing new construction
Historic district regulations limiting design choices
Wetland setback requirements reducing buildable area
Height restrictions that affect your design plans

Real-world example: You find a 2-acre lot that seems perfect, but county setback requirements mandate 75 feet from all property lines. After accounting for setbacks, the actual buildable area is only 50×50 feet—not enough for your planned 3,000 square foot home.

5. Environmental and Site Conditions

Why it matters: Natural features can significantly impact buildability and costs.

What’s evaluated:

Wetlands and protected environmental areas
Floodplain designation
Soil quality and bearing capacity
Slope and drainage patterns
Tree removal requirements and restrictions
Endangered species habitats
Archaeological or historical significance

Potential issues:

Wetlands covering 40% of the property, making it unbuildable
Floodplain location requiring expensive elevation or flood insurance
Rock ledge requiring blasting and adding $30,000+ to foundation costs
Protected trees that can’t be removed, limiting building site options
Steep slopes requiring expensive retaining walls or erosion control

Real-world example: A lot looks flat and perfect until the feasibility study reveals seasonal wetlands in the only suitable building area. Federal and state wetlands regulations make development impossible without expensive mitigation that exceeds the property’s value.

6. Easements and Legal Restrictions

Why it matters: Legal limitations can restrict how you use your property.

What’s evaluated:

Utility easements crossing the property
Access easements (rights of way)
Conservation easements
Deed restrictions and covenants
Shared driveway agreements
Mineral rights issues

Potential issues:

Easement running through the middle of your planned building site
Deed restrictions limiting house size, style, or color
Access easement giving neighbors legal right to cross your property
HOA requirements you weren’t aware of
Mineral rights owned by someone else, allowing future extraction

Real-world example: The perfect building site turns out to have a 30-foot wide utility easement running right through it. The power company has legal rights to access this area, and you cannot build within it.

7. Access and Driveway Requirements

Why it matters: You need legal, year-round access to your property.

What’s evaluated:

Legal access rights (deeded access, public road frontage, or easement)
Road maintenance responsibilities
Driveway length and terrain
Driveway permit requirements
Winter access considerations
Fire department access requirements

Potential issues:

Landlocked property requiring easement negotiation with neighbors
Shared private road with unclear maintenance agreements
Steep driveway grade requiring expensive engineering
County won’t issue building permit without improved road access
Fire department access requirements necessitating a wider, paved driveway

Real-world example: A beautiful mountain lot has legal access via a narrow dirt road. The fire marshal requires all new homes to have 20-foot wide all-weather access for fire trucks. Creating this access requires $40,000 in road improvements.

Who Conducts the Feasibility Study?

A proper feasibility study isn’t a one-person job. It requires coordinating with multiple professionals and agencies:

The Feasibility Expert/Coordinator

This is often a land use consultant, civil engineer, or experienced land developer who serves as the quarterback of the process. They:

Understand local regulations and requirements
Know which questions to ask and which agencies to contact
Coordinate soil tests, surveys, and other evaluations
Interpret technical information for the buyer
Provide a comprehensive report summarizing findings

Additional Professionals Often Involved

Licensed Surveyor

Establishes property boundaries
Identifies easements and encroachments
Maps topography and building site options

Soil Engineer/Geotechnical Engineer

Conducts perc tests for septic feasibility
Evaluates soil bearing capacity for foundations
Identifies potential excavation challenges

Environmental Consultant

Conducts wetlands delineation
Identifies protected species or habitats
Reviews environmental regulations

Well Driller

Estimates drilling depth and costs
Evaluates water table conditions
Reviews historical well data in the area

Utility Companies

Provide cost estimates for service extensions
Clarify timeline and requirements
Identify any capacity limitations

Local Building Department

Confirms zoning and permitted uses
Explains setback and code requirements
Outlines permit process and timelines
Clarifies any recent regulation changes

How Much Does a Feasibility Study Cost?

This is one of the most common questions—and the answer is: it depends on the complexity of the property and what needs to be evaluated.

Typical Cost Range: $3,000 – $15,000+

Basic feasibility study ($3,000-$5,000):

Zoning verification
Utility availability confirmation
Basic site walk-through
Building department consultation
Preliminary cost estimates

Comprehensive feasibility study ($7,000-$15,000):

Everything in basic study, plus:
Boundary survey
Topographic survey
Perc test for septic
Wetlands delineation
Geotechnical soil evaluation
Detailed utility cost estimates
Comprehensive written report

Complex property feasibility ($15,000+):

Everything above, plus:
Multiple test holes for difficult septic situations
Extensive environmental assessments
Detailed engineering for challenging terrain
Legal review of complex easements or access issues

Is It Worth the Cost?

Absolutely—when you consider the alternatives:

Buying land that can’t support your building plans: Loss of entire purchase price
Discovering septic won’t work after closing: $20,000-$50,000 for alternative systems or abandoning the property
Finding out power extension costs $40,000: Significant budget overrun or project cancellation
Learning about deed restrictions after purchase: Potential inability to build what you planned

A $5,000-$10,000 feasibility study can save you from a $50,000-$200,000 mistake.

Think of it as insurance. You’re paying experts to find problems before you own them, when you still have the option to walk away and get your earnest money back.

The Feasibility Study Timeline

Understanding the timeline helps you plan appropriately and avoid rushing critical evaluations.

Typical 45-Day Feasibility Period:

Days 1-5: Initial Coordination

Hire feasibility expert/coordinator
Identify which evaluations are needed
Schedule site visits and tests
Begin gathering available documentation

Days 5-15: Information Gathering

Contact utility companies for service availability and costs
Meet with building department to review requirements
Research zoning, setbacks, and code requirements
Obtain any existing surveys, perc tests, or studies from seller
Review deed, title report, and legal restrictions

Days 15-30: Field Work and Testing

Conduct survey (if needed)
Perform perc test for septic
Complete soil testing
Wetlands delineation (if applicable)
Site walk-through with experts
Well driller assessment

Days 30-40: Analysis and Cost Estimates

Compile all findings
Calculate actual costs for utilities, septic, well, etc.
Identify any deal-breakers or significant concerns
Prepare comprehensive written report
Review findings with buyer

Days 40-45: Decision Time

Review complete feasibility report
Decide whether to:
- Accept feasibility and proceed with purchase
- Negotiate with seller to address issues or adjust price
- Walk away from the deal and recover earnest money

Note: Some properties require longer feasibility periods (60-90 days) if they’re particularly complex, if testing can only be done in certain seasons, or if government agencies are slow to respond.

Red Flags That Emerge During Feasibility Studies

Experienced land buyers and their feasibility experts watch for warning signs that indicate potential problems:

Seller Red Flags

“I don’t know much about the property”

Seller may be offloading a problem lot
Lack of information suggests they haven’t explored buildability
Could indicate inherited property or out-of-area owner

“The previous buyer backed out during their feasibility period”

Find out why—they may have discovered significant issues
Request copies of any studies they commissioned
Understand what made them walk away

“I had a study done a few years ago, but things may have changed”

Regulations often become more restrictive over time
Utility costs may have increased significantly
Previous study may have missed critical issues
Always conduct your own current feasibility study

“You can definitely build here—I checked with my buddy at the county”

Informal conversations are not official determinations
Get everything in writing from official sources
Don’t rely on seller’s assurances

Property Red Flags

The lot is priced significantly below comparable properties

There’s usually a reason for bargain-priced land
Low price may reflect known buildability issues
Investigate thoroughly before assuming you found a deal

No other homes in the immediate area

May indicate buildability challenges others have discovered
Could signal septic, water, or access issues
Research why the area hasn’t developed

Property has been on the market for a long time

Extended time on market suggests something is wrong
Other buyers’ feasibility studies may have revealed problems
Seller may be more motivated, but understand why first

Odd property shape or size

Irregular lots sometimes result from subdivisions that left unbuildable remnants
Very small or strangely shaped lots may not meet current zoning requirements
Question why the property has unusual characteristics

What Happens If the Feasibility Study Reveals Problems?

Finding issues during the feasibility period isn’t necessarily a deal-breaker—it’s actually the whole point of the study. You have several options:

Option 1: Negotiate with the Seller

If problems are discovered, you can request:

Price Reduction

“The perc test failed, and an alternative septic system will cost an extra $25,000. Can we reduce the purchase price by $25,000?”
Seller may agree to share costs or reduce price substantially

Seller Contributions

“Will you pay for the power line extension as a condition of the sale?”
Seller handles the problem; you get buildable land

Property Improvements

“Can you complete the well drilling and provide water test results before closing?”
Reduces your risk and uncertainty

Option 2: Adjust Your Plans

Sometimes the solution is modifying what you intend to build:

Moving the building site to avoid wetlands or challenging terrain
Reducing house size to fit within setback requirements
Changing architectural plans to meet deed restrictions
Accepting a well instead of municipal water
Choosing alternative septic system design

Option 3: Walk Away

If the feasibility study reveals deal-breakers or costs that exceed your budget, the feasibility contingency allows you to:

Cancel the contract
Recover your full earnest money deposit
Move on to search for better-suited property

This is not failure—this is the contingency working exactly as intended. You’ve protected yourself from making an expensive mistake.

Questions to Ask Your Feasibility Expert

To get the most value from your feasibility study, ask the right questions:

About Buildability

Can I build the size and style of home I’m planning on this lot?
Where is the optimal building site considering all factors?
Are there any absolute deal-breakers I should know about?
What’s the most challenging aspect of building on this property?

About Costs

What are the total estimated costs beyond the land purchase to make this buildable?
Are there any hidden costs I haven’t considered?
How do costs compare to similar properties in the area?
What’s the range of costs (best case to worst case scenarios)?

About Timeline

How long will the permit process take in this jurisdiction?
Are there seasonal limitations (perc tests only in summer, etc.)?
What’s the realistic timeline from purchase to breaking ground?
Are there any factors that could cause significant delays?

About Alternatives

If the first-choice building site doesn’t work, are there alternatives on the property?
What options exist if septic/well/utilities are more challenging than expected?
Can anything be done to address the problems you’ve identified?

About Regulations

What are the most restrictive regulations affecting this property?
Are there any pending regulation changes I should be aware of?
What happens if regulations change between purchase and building?
Do I need any special permits or approvals beyond standard building permits?

How the Feasibility Study Fits Into Your Overall Land Buying Process

Let’s put the feasibility study in context with the complete land buying journey:

Step 1: Define Your Criteria

Location preferences
Lot size and acreage
Lifestyle considerations (rural vs. suburban, proximity to work/schools)
Budget for land and construction
Timeline for building

Step 2: Property Search

Work with a real estate agent experienced in land sales
Review properties that match your criteria
Visit the area and properties in person
Narrow down to the best candidates

Step 3: Initial Due Diligence

Review available information (surveys, previous perc tests, etc.)
Drive the property and surrounding area
Research zoning and general buildability
Confirm the property meets your basic requirements

Step 4: Make an Offer

Include feasibility contingency period (30-60+ days)
Allow adequate time for thorough investigation
Specify what needs to be evaluated
Protect your earnest money deposit

Step 5: Conduct Feasibility Study ← YOU ARE HERE

Hire qualified experts
Complete all necessary testing and evaluations
Review findings thoroughly
Make informed decision about proceeding

Step 6: Financing

Work with lenders familiar with land and construction loans
Understand that land loans differ from home mortgages
Lenders often require feasibility study results
Construction-to-permanent loans may be appropriate

Step 7: Close on the Land

Remove contingencies and proceed to closing
Transfer ownership
Pay closing costs (typically lower than home purchases)
Officially own your building site

Step 8: Design and Permitting

Work with architect or builder on house plans
Submit plans for building permits
Address any plan revision requests
Wait for permit approval

Step 9: Construction

Hire contractor (if not already involved)
Begin site work and construction
Monitor progress and quality
Address issues as they arise

Step 10: Move Into Your Dream Home

Final inspections and certificate of occupancy
Complete any punch-list items
Enjoy the home you built on the land you carefully evaluated

The feasibility study in Step 5 is the crucial checkpoint that determines whether Steps 6-10 are even possible.

Common Feasibility Study Mistakes to Avoid

Mistake 1: Skipping the Feasibility Study to Save Money

The thinking: “The lot looks great and the seller says it’s buildable. Why spend $5,000 on a study?”

The reality: Without a feasibility study, you’re buying blind. That $5,000 investment often prevents $50,000-$100,000+ mistakes.

Mistake 2: Using Inadequate Feasibility Period

The thinking: “30 days should be plenty of time to check things out.”

The reality: Coordinating multiple experts, scheduling tests, waiting for government agencies, and analyzing results takes time. 45-60 days is more realistic for thorough evaluation.

Mistake 3: Relying on Seller’s Information

The thinking: “The seller said they had a perc test done 5 years ago and it passed, so septic should be fine.”

The reality: Regulations change. Test results expire. Soil conditions vary across a property. Always conduct your own current testing.

Mistake 4: Hiring Unqualified “Experts”

The thinking: “My brother-in-law works in construction, so he can evaluate the property.”

The reality: Land feasibility requires specific expertise in local regulations, soils engineering, septic design, utilities, and building codes. Use licensed professionals experienced in feasibility studies.

Mistake 5: Not Getting Everything in Writing

The thinking: “The building department said over the phone that my plans should be fine.”

The reality: Verbal assurances mean nothing. Get official written determinations, cost estimates, and approvals documented.

Mistake 6: Ignoring Red Flags

The thinking: “The soil is rocky, but we can probably work around that.”

The reality: If your feasibility expert raises concerns, take them seriously. “Probably” and “maybe” become expensive and stressful when you own the property and are trying to build.

Mistake 7: Emotional Decision-Making

The thinking: “I love this property so much—I’m sure we can figure out the septic issue after we buy it.”

The reality: Never let emotions override feasibility facts. If fundamental issues exist, walking away is the right choice, no matter how attached you feel.

The Bottom Line: Feasibility Studies Protect Your Investment

Buying vacant land to build your dream home is exciting. The possibilities seem endless when you stand on an empty lot and envision your future there.

But that dream can quickly become a nightmare if the land can’t actually support your building plans—or if the costs to make it buildable far exceed your budget.

A feasibility study is not an expense. It’s an investment in certainty.

It answers the critical question—”Can I actually build here?”—with professional expertise, thorough testing, and documented facts rather than assumptions and hopes.

The feasibility contingency period built into your land purchase contract is your protection. Use it fully. Hire qualified experts. Ask tough questions. Review findings carefully. And make your decision based on facts, not emotions.

When the Feasibility Study Comes Back Positive

If your feasibility study shows the land is buildable within your budget, you can move forward with confidence. You know:

What it will cost to make the land ready for construction
Where you can build and what restrictions apply
What utilities are available and their costs
That the property can support your planned home
How long the permitting and preparation process will take

You’re not buying a dream—you’re buying a realistic, achievable building site.

When the Feasibility Study Reveals Problems

If significant issues emerge, you have the power to:

Negotiate with the seller to address problems or reduce price
Modify your plans to work within the property’s limitations
Walk away and continue your search

This is the feasibility contingency doing its job. You’re protected from making a costly mistake.

The land buying process is different from buying an existing home. It requires additional steps, specialized knowledge, and expert evaluation. The feasibility study is the most critical of these steps—the checkpoint that determines whether your dream home can actually be built on the land you’re considering.

Don’t skip it. Don’t rush it. And don’t underestimate its importance.

Your future home—and your financial security—depend on getting this step right.