Due Diligence Before You Buy a Lot in Austin: The Developer's Pre-Acquisition Checklist

Developer & Investor Playbook  ·  May 2026

Every bad land deal in 78704 has the same origin story: a developer who bought the lot before completing the full due diligence picture. The flood zone that compressed the buildable footprint. The heritage tree in the center of the envelope that the seller disclosed but nobody fully investigated. The impervious cover that was already maxed by the existing home. This checklist exists because those deals keep happening — and most of them are preventable.

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Lot due diligence in 78704 is not the same as home inspection due diligence. When you are buying a home to live in, the inspection surfaces what is wrong with the structure. When you are buying a lot to develop, the due diligence reveals what is possible with the land — and the variables that constrain that possibility are specific to Austin's regulatory environment in ways that catch unprepared developers at significant cost.

This checklist is organized by category, ordered roughly by the sequence in which items should be investigated, and annotated with the specific Austin regulatory context that makes each item matter for a 78704 acquisition. Complete all of it before you go under contract if possible. Complete all of it before the option period expires if you are doing it after contract execution.

Why Lot Due Diligence Is Different — and Harder Than It Looks

The failure mode in lot due diligence is almost always the same: the developer focuses on the variables they know to ask about — flood zone, impervious cover — and misses the ones that are specific to the particular parcel. A heritage tree that was not fully mapped. A utility easement that cuts through the buildable envelope. A prior permit history that reveals a variance the current owner obtained and that cannot be transferred. An environmental overlay that the zoning map did not make obvious.

In Austin specifically, the combination of the city's heritage tree ordinance, the Edwards Aquifer Protection Zone, watershed protection overlays, compatibility standards, and the impervious cover calculation system creates a regulatory environment where every lot is slightly different — and where the difference between a straightforward development site and a complicated one is not always visible from the street. The purpose of a thorough pre-acquisition investigation is to surface that difference before you have committed capital, not after.

The cost of full pre-acquisition due diligence on a 78704 lot runs $15,000–$35,000 depending on the complexity of the site — surveys, arborist reports, engineering assessments, and professional analysis time. On a $900,000–$1.4M land acquisition, that represents 1.5–2.5% of the purchase price. It is consistently one of the highest-ROI expenditures in the development process.

Category 1: Zoning, Land Use, and Overlays

The starting point for any Austin lot evaluation is the current zoning designation and the overlay conditions that apply to the specific parcel. Austin's zoning system is layered — a property may have a base zone (SF-3, for example) and one or more overlay designations that restrict what can be built above and beyond the base zone requirements.

Checklist items:

☐ Pull the zoning designation through Austin's Development Services Department or the City's GIS portal. Confirm the base zone and all applicable overlay designations.

☐ Check for neighborhood deed restrictions. Several 78704 neighborhoods have adopted neighborhood plans that layer additional requirements — including compatibility standards, design standards, or use restrictions — on top of the base zoning. These plans can affect building height, setbacks, and permitted uses in ways that are not immediately obvious from the base zone alone.

☐ Verify compatibility standard applicability. Austin's compatibility standards restrict building height and setbacks for new construction adjacent to properties in SF or MF-1 zones. If your proposed development is adjacent to a single-family home — which is almost always the case in 78704 — compatibility standards will affect your maximum height and setback requirements. Confirm how this affects your building envelope before you finalize your site plan.

☐ Check for watershed protection overlays. Portions of 78704 fall within the Barton Creek Watershed or the Edwards Aquifer Contributing Zone, which carries additional impervious cover restrictions beyond the standard zoning limit. Pull the City's watershed map and confirm which overlay — if any — applies to the specific parcel.

☐ Confirm the permitted use. While residential use is standard in 78704, any non-standard prior use — a former home-based business, an ADU on the property, a documented commercial use — should be understood and confirmed to not create complication for your intended residential development.

Category 2: Impervious Cover Calculation

Impervious cover — the percentage of a lot that can be covered by hard surfaces including structures, driveways, walkways, and patios — is the constraint that most directly determines how large a home can be built on a given lot. In 78704, the standard residential limit is 45% in most zones, but overlay conditions can tighten this significantly, and the existing improvements on the lot may have already consumed a meaningful portion of the allowance.

Checklist items:

☐ Calculate the gross lot area. Get the survey or pull the plat from Travis County records to confirm the exact lot dimensions and gross area in square feet. The impervious cover calculation is based on gross lot area, not the buildable area net of setbacks.

☐ Determine the applicable impervious cover limit. Confirm the standard limit for the base zone and verify whether any overlay conditions reduce that limit for this specific parcel.

☐ Calculate the maximum allowable hard surface. Multiply gross lot area by the applicable impervious cover percentage. This is your total hard surface budget — structure footprint, all driveways, walkways, covered patios, and any other impervious surface.

☐ Assess existing impervious cover on site. The existing structure, driveway, and hardscape on the teardown property are counted toward the impervious cover total. If the existing home is larger or has more impervious surface than your target new build will use, you have more room. If the existing home has already consumed 40% of a 45% limit, you have very little room for additional hard surface in the new design.

☐ Confirm the impervious cover headroom for your target building program. Your architect or civil engineer should calculate the maximum home footprint, garage footprint, driveway area, and outdoor hardscape that can be accommodated within the remaining impervious cover budget. This calculation should be completed before you finalize your pro forma — the maximum SF that fits within the impervious cover limit is the constraint that defines your exit pricing.

Category 3: Flood Zone Status

Flood zone designation is one of the most consequential variables in a 78704 lot evaluation — and one of the most easily checked with a simple FEMA map query. A property inside a Special Flood Hazard Area (SFHA) carries flood insurance requirements, may require elevated foundation construction, and in some cases significantly limits what can be built or how it is positioned on the lot.

Checklist items:

☐ Pull the FEMA Flood Map. Search the FEMA Flood Map Service Center (msc.fema.gov) for the specific parcel address. Note the flood zone designation — Zone X (outside the SFHA), Zone AE (100-year floodplain with base flood elevations), or Zone A (100-year floodplain without detailed analysis) are the most common designations in Austin.

☐ Review the Base Flood Elevation (BFE) if applicable. For Zone AE properties, the BFE establishes the minimum elevation at which the lowest floor of the structure must be built. This affects foundation type, first-floor elevation, and in some cases the architectural design of the entire structure.

☐ Check for LOMR or LOMA applications. Letters of Map Revision (LOMR) and Letters of Map Amendment (LOMA) can modify a property's official flood zone designation even after the FEMA map is published. Check with the City of Austin's Watershed Protection Department or a licensed surveyor whether any recent map changes affect the parcel.

☐ Get an elevation certificate if the property is in or near an SFHA. For properties in or adjacent to a flood zone, an elevation certificate from a licensed surveyor establishes the precise elevation of the land and any existing structures relative to the BFE. This document is required for flood insurance underwriting and is useful for understanding the true development constraints on the parcel.

☐ Confirm the flood zone's impact on your building program. Discuss the flood zone implications with your architect and engineer before committing to a design — elevated foundation requirements, fill limitations, and drainage requirements can all affect your construction cost and timeline in ways that need to be reflected in your pro forma before acquisition.

Category 4: Heritage Tree Assessment

Austin's Urban Forestry ordinance is one of the most consequential site-specific variables in a 78704 development evaluation — and one of the most frequently underestimated by developers coming from other Texas markets where tree ordinances are less robust.

Checklist items:

☐ Commission a tree survey from a certified arborist. A professional tree survey identifies every tree on the property with a trunk diameter at breast height (DBH) of 19 inches or greater — the threshold that triggers Austin's heritage tree protection. The survey maps each tree's location, DBH, species, and condition. This is a required submission for most Austin building permits and should be in your hands before you finalize the site plan.

☐ Map heritage trees against your target building envelope. Overlay the arborist's tree map on the lot survey and your proposed site plan. Heritage trees within or adjacent to the buildable envelope affect where the structure can be placed, require a Tree Protection Zone (TPZ) calculation, and may require structural engineering coordination to avoid root zone damage during construction.

☐ Understand the removal vs. preservation decision. Heritage tree removal in Austin requires a separate tree removal permit and triggers a mitigation requirement — replanting equivalent caliper inches of trees elsewhere on the property or paying a fee in lieu. The cost of removal and mitigation can run $15,000–$50,000 per significant tree. Preservation is always the lower-risk path when the tree is not directly within the footprint.

☐ Assess the construction impact radius. Austin's tree protection requirements establish a construction exclusion zone around heritage trees based on trunk diameter — typically one foot of radius per inch of trunk diameter. A 30-inch live oak has a 30-foot protected radius. Any grading, trenching, or construction activity within that radius requires specific authorization and engineering.

☐ Factor tree constraints into your site plan before your offer. A heritage tree in the center of what would otherwise be your ideal building footprint is a site plan problem, not a permit problem. The site plan that works around it may result in a smaller home, a different orientation, or additional foundation engineering — all of which affect your cost basis and should be reflected in your acquisition price.

Category 5: Utility Connections and Infrastructure

Utility connection status — water, sewer, electricity, and gas — affects both your construction cost and your project timeline in ways that are often underestimated in the initial pro forma.

Checklist items:

☐ Confirm active water and sewer connections. An existing home in 78704 should have active connections, but verify with Austin Water that service is active and that there are no outstanding account issues or service interruptions that could complicate the connection status during and after demolition.

☐ Assess the water and sewer line sizes. For larger luxury homes with high fixture counts, irrigation systems, and exterior water features, the existing service line sizes may be insufficient for the new build's demand. A civil engineer can assess whether line upsizing is required and what that costs — both in materials and in Austin Water connection fees, which can run $10,000–$30,000 for larger service upgrades.

☐ Confirm electrical service capacity. Modern luxury homes with multiple HVAC systems, EV charging, and high-demand appliances require electrical service capacity that older service connections may not support. Austin Energy can confirm the existing service size and the cost and timeline for service upgrades.

☐ Check for utility easements on the plat. Utility easements — for power lines, water mains, sewer lines, or telecommunications infrastructure — can run through a lot and constrain where structures can be placed. Pull the recorded plat and confirm the location and dimensions of any easements that affect the buildable area.

☐ Assess alley access and its implications. Many 78704 lots have rear alley access, which provides flexibility for garage placement and can allow the primary home's main facade to occupy more of the front lot without a visible driveway. Confirm whether the alley is maintained by the City or by adjacent property owners, and whether any easements or encroachments in the alley complicate your intended use of it.

Category 6: Permit History and Prior Development Activity

The permit history of a property is one of the most useful and least-utilized sources of pre-acquisition intelligence available to developers. Austin's permitting records are public and searchable through the Development Services Department portal.

Checklist items:

☐ Pull the full permit history for the address. Review every permit issued for the property — building permits, electrical, plumbing, mechanical, and any demolition permits. This history tells you what was built, when it was built, whether work was performed with permits or without them, and whether all permits were properly closed.

☐ Identify any open or expired permits. An open permit from prior work — a 2014 addition that was permitted but never received a final inspection, for example — can complicate your demolition and new construction permit process. Austin requires open permits to be closed before a new building permit can be issued in some circumstances. Confirm the status of all prior permits before acquisition.

☐ Check for prior variance or exception approvals. If the seller obtained a variance — for setbacks, impervious cover, height, or tree removal — understand whether that variance was a one-time exception or whether it runs with the land. Some variances are property-specific and transferable to a new owner; others are personal to the applicant and expire at sale. Confirm the status of any prior exceptions with the Board of Adjustment or Development Services.

☐ Look for unpermitted work. Work done without permits — additions, garage conversions, accessory structures — creates risk in two directions: the City may require removal or retroactive permitting before your new construction permit is issued, and the existence of unpermitted improvements may affect your insurance and title coverage. A thorough site visit and a review of the permit history against what actually exists on the property will surface most unpermitted work.

☐ Review any enforcement or violation history. Code enforcement complaints, citation history, and any unresolved violations associated with the address can create complications for your permit applications. Pull the enforcement history through the City's portal and confirm there are no outstanding violations that would need to be resolved before your new construction permit is approved.

Category 7: Seller Motivation and Title

The final category in a thorough lot due diligence process addresses the human and legal elements of the transaction — understanding what is motivating the seller and ensuring that the title to the property is clean before you commit capital.

Checklist items:

☐ Understand the seller's motivation. A seller who needs to close within 45 days for estate or tax reasons will negotiate differently than a seller who is testing the market with no urgency. Understanding the motivation — and having a broker relationship with someone who has had direct contact with the seller — is the due diligence that most dramatically affects your acquisition price.

☐ Order a preliminary title report. The title commitment from your title company will identify liens, encumbrances, easements, and any clouds on title that exist on the property. Review every exception listed in Schedule B of the title commitment and confirm that each one is either acceptable as-is or capable of being resolved before closing.

☐ Check for tax liens and delinquencies. Travis County tax records are public. Confirm that property taxes are current and that there are no outstanding tax liens that would need to be satisfied from the sale proceeds or addressed before closing.

☐ Verify ownership and probate status. In estate situations — which represent a meaningful share of 78704 teardown opportunities — confirm that the seller has clear legal authority to convey the property. If the owner is deceased, the estate must be properly administered and the representative must have authority to sell before any contract is executed.

☐ Confirm no HOA encumbrances that affect development. While most 78704 residential properties are not subject to HOAs, some neighborhoods have recorded deed restrictions or subdivision covenants that impose architectural standards, minimum square footage requirements, or other constraints that could affect your proposed development. Pull the recorded plat and deed and confirm whether any such restrictions apply.

The Site Visit Checklist

No amount of desk research replaces a thorough walk of the actual property with trained eyes. Here is what to look for on a site visit before making an acquisition decision.

☐ Walk the full lot perimeter and compare it against the survey. Confirm that the actual boundaries match the recorded dimensions — encroachments from neighbors, fences in the wrong location, and structures that cross the property line are more common than buyers expect.

☐ Assess topography in person. A lot that looks flat on a survey may have a 6–8 foot grade change from front to back that is not obvious from the street. Walk the rear yard and assess the grade change from the highest to lowest point — this directly affects foundation type and site work cost.

☐ Document heritage trees by location and approximate size. Before your arborist's formal survey, walk the property and note any trees that appear to be 19 inches or larger in trunk diameter. Flag any that are located within what would be your building footprint or driveway path.

☐ Check alley condition and width. If you intend to use alley access for garage entry, confirm that the alley is maintained, that the width is sufficient for your intended use, and that there are no obstructions (utility poles, transformers, neighbor encroachments) that would complicate access.

☐ Note neighboring structure height and proximity. Compatibility standards are triggered by adjacency to single-family homes. Assess the height and proximity of neighboring structures to understand how compatibility standards will affect your maximum buildable height on the specific parcel.

Red Flags That Kill Deals — or Should

Some findings in the pre-acquisition investigation are deal-killers — conditions that fundamentally change the economics or the feasibility of the development program. Recognizing these early is the purpose of thorough due diligence.

Watershed overlay impervious cover below 30%. If a Barton Springs Zone overlay or other watershed protection designation reduces maximum impervious cover below 30%, the buildable footprint on most 78704 lots is too constrained to support a luxury new build that pencils at current land prices. This is a deal-stopper in most cases unless the purchase price is adjusted significantly to reflect the constraint.

Active floodplain covering more than 20% of the lot. A lot where a significant portion of the buildable area falls within the 100-year floodplain requires elevated foundation construction, creates design constraints, and can require expensive drainage engineering. Understand the full scope of the constraint before proceeding.

Heritage trees with TPZ covering more than 40% of the buildable envelope. If the Tree Protection Zone calculations for heritage trees on the property consume more than 40% of the effective buildable area, the resulting site plan will be compromised — either a significantly smaller home than your program requires or structural engineering costs that compress your margin. Explore the constraint fully with an arborist and architect before committing.

Open or disputed title. Any unresolved cloud on title — a disputed heir, an undischarged lien, a recorded easement that crosses the center of the buildable area — should be resolved before closing, not after. A title company that says "we'll work it out" without a clear resolution path before closing is a red flag.

Unpermitted structures that complicate demolition. Significant unpermitted structures — additions, ADUs, or accessory buildings built without permits — can require retroactive permitting or documented removal before your new construction permit is approved. Understand the full scope of what exists on the property and what the City's position is on unpermitted work before acquisition.

Frequently Asked Questions

How long does full pre-acquisition due diligence take in Austin?
For a standard 78704 teardown lot, a thorough due diligence process — including tree survey, preliminary engineering assessment, flood map research, permit history review, and title preliminary — takes 10–21 days when properly sequenced. The tree survey and engineering assessment are the longest-lead items; both can typically be ordered concurrently. Building this timeline into your option period is essential — a 7-day option period is not sufficient for a complete investigation on a complex lot.

Can I do due diligence before making an offer?
Some of it, yes. Zoning verification, flood map research, permit history, and an initial property tax check are all available through public records and can be completed before you spend a dollar. Tree surveys and engineering assessments require physical access to the property — which typically requires seller consent and is easiest to arrange as part of an executed contract option period. The pre-offer investigation narrows the field; the option period confirms the details on the lots that survive it.

What is the most commonly missed due diligence item in 78704?
Watershed overlay impervious cover restrictions. The base zone impervious cover limit (typically 45% in 78704) is well-known and consistently checked. The additional restrictions imposed by watershed protection overlays are less consistently verified — and the consequences of missing them are severe. Always verify the full overlay picture for the specific parcel, not just the base zone.

Should I hire a dedicated development consultant for due diligence?
For your first several 78704 acquisitions, yes — a civil engineer or development consultant who regularly works in Austin's regulatory environment is worth the fee for the guidance they provide through the due diligence process. Experienced 78704 builders who have completed multiple projects have internalized this checklist over years of repetition. First-time developers in this specific regulatory environment benefit from professional guidance until the framework becomes second nature.

How does The Davis Agency help with lot due diligence?
The Davis Agency tracks the 78704 acquisition market and maintains relationships with the architects, civil engineers, and arborists who regularly work in the neighborhood. We can introduce qualified professionals for each stage of the due diligence process, provide current land comp context for your acquisition pricing, and help assess whether the specific constraints a lot presents are typical for the neighborhood or represent unusual risk. We have worked through this checklist on six off-market 78704 transactions — the patterns are familiar.