How do you build a custom home in Scottsdale?

You build a custom home in Scottsdale by buying a lot, getting the plans through the City of Scottsdale's review and any association design review, hiring a licensed contractor, and paying for it with a loan written for construction. Before you commit to a lot, I'll pull the city's zoning information for the parcel, check whether the city maps it as Environmentally Sensitive Lands, and ask for the association's documents.

I'm Jen Keene, a REALTOR® with eXp Luxury in Scottsdale, AZ, helping buyers and sellers for more than 20 years. Before anyone sees a house or a lot with me, I walk them through pre-approval and the buyer broker agreement.

The steps go in this order: check the lot, buy it, get the association's design approval where there is one, get the plans through city plan review and a permit, build with a licensed contractor under a written contract, pass the city's inspections, and receive the Certificate of Occupancy. Each of those has its own decision maker.

Start with what the city says about the parcel. The City of Scottsdale's Property Information Request page gives the property's zoning and links to an interactive map, and it is the route for customized requests on setbacks, allowed land uses and a flood hazard determination. The city's single-family construction page says many subdivisions have their own amended development standards that differ from the Zoning Ordinance, and that those standards together with the easements on the lot create the building envelope. Ask the city for the standards that apply to your lot in writing before you design anything, and the page strongly recommends a boundary survey.

The Arizona Department of Real Estate (ADRE) adds two things for a buyer. Its Buyer Advisory says the title commitment lists exceptions to the title insurance (Schedule B), which can include easements and liens that affect how you use the property, and its Property Buyer's Checklist tells buyers to check city or county zoning maps for what is zoned next to vacant land.

If you're buying from a developer, ADRE adds a document. A subdivider selling lots in a subdivision, as A.R.S. 32-2101 defines it (land divided or proposed to be divided into six or more lots, parcels or fractional interests), has to give buyers a Subdivision Public Report, and A.R.S. 32-2183 says the subdivider must give each initial buyer a copy before the buyer signs an offer and take a receipt. The statute makes a sale rescindable by the buyer if the report was not delivered, within three years after the buyer signs. ADRE says the report covers utilities, common facilities, access and property owners association details, and that ADRE does not verify what's in it.

The city describes the Environmentally Sensitive Lands Overlay (ESL) as zoning rules for 134 square miles of desert and mountain areas, located north and east of the Central Arizona Project canal. The city says the ordinance requires that a percentage of each property be permanently preserved as natural area open space (NAOS), and that it protects washes, ridges and peaks from inappropriate development. The city's NAOS table sets the percentage by two things, the landform (Lower Desert, Upper Desert or Hillside) and the slope of the land, and the city's NAOS table cites Section 6.1060 of the Zoning Ordinance for the requirement.

The percentage depends on your parcel, so get the figure for your lot. The city publishes an interactive map of the ESL landforms and a protected peaks and ridges index map, so you can see how the city classifies a parcel before you make an offer. Call me with an address and I'll start with the city's maps. For the hillside side of this, here's my post on Scottsdale hillside lots and the ESL ordinance.

The city's page for single-family residential construction lays it out in four steps and a Certificate of Occupancy, and it lists single-family custom homes as one of the project types.

1. Gather site information. You identify the development standards and codes that apply before you submit plans, and a pre-application meeting with city staff is optional.
2. Submit plans for review. The city says plans go in electronically through its Scottsdale SPUR planning and permitting portal. Plans are reviewed across five disciplines: Planning, Building, Engineering, Stormwater and Fire.
3. Receive the permit. The city issues it once the plans are found to be in compliance and the fees are paid.
4. Pass inspections. You request them through SPUR, and the city says the work has to stay accessible and exposed until it's approved.

After a passed final inspection the city issues a Certificate of Occupancy. The city's One Stop Shop is the place to ask about submittals, permits and fees, and the city's current pages decide what applies to your project.

If the lot is in a planned community, the recorded declaration usually brings in an association design review, and that is a separate approval from the city's permit. The city's page says it is the property owner's responsibility, not the city's, to know the CC&Rs, and that the city does not enforce or monitor them. The Arizona Registrar of Contractors (ROC) says a property owner is responsible for telling the contractor about CC&R restrictions and construction policies before the contract is signed.

Arizona's planned community statute, A.R.S. 33-1817, sets a few ground rules. A design review or architectural committee has to include at least one member of the board of directors, who is the chairperson, and approval of a construction project's designs, plans and amendments cannot be unreasonably withheld. For new construction of the main home in a community that has design guidelines and takes a security deposit, the statute adds that the deposit goes into a trust account, that you can attend a final design approval meeting, and that the association does at least two on-site reviews during construction. That part also says approving the plans or the construction is not a warranty that they meet governmental requirements or safety standards.

If you're buying the lot from a current owner, A.R.S. 33-1806 sets what you receive from the community, including the declaration, the rules, recent board minutes, the budget and a dated statement of assessments, liens and unresolved violations. The seller provides it when the community has fewer than 50 properties and the association provides it when there are 50 or more. The design guidelines aren't on the statute's list, so ask for them by name.

The ROC licenses contractors, and its Before You Hire a Contractor page tells owners to look up the license record on its Contractor Search and to make sure the license class allows the work in the contract. The Arizona Attorney General's office also tells homeowners to check the license at roc.az.gov. The ROC requires a license bond, and workers' compensation coverage when the contractor has employees. It does not require general liability insurance, so ask for the certificate. A.R.S. 32-1152 covers the bond, and A.R.S. 32-1122 has the applicant attest to workers' compensation compliance.

A.R.S. 32-1121 exempts an owner who builds on their own property for their own occupancy, as long as the home isn't intended for sale or rent, and it treats a sale or rental offered within one year after completion or the Certificate of Occupancy as evidence it was. Have an attorney confirm that before you rely on it.

For a residential contractor there is also a second protection. A.R.S. 32-1152 requires either an additional $200,000 bond or cash deposit or participation in the Residential Contractors' Recovery Fund, and under A.R.S. 32-1132.01 the maximum individual award from the fund is $30,000. The statute I checked on October 30, 2026 sets the maximum at $30,000, and the Registrar can tell you if that has changed.

The fund has conditions that matter if the new home isn't your primary residence. The ROC says a claimant must be an owner who occupies or intends to occupy the home as a primary residence, or in certain cases an LLC or revocable trust whose members or trustors will all occupy it that way. For an administrative claim the contractor's license must have been suspended or revoked after your complaint, you must first claim against the contractor's bond, and A.R.S. 32-1133.01 says the claim must be submitted within two years after the proceedings, reviews and appeals on the Registrar's final order end.

Arizona law also sets what a residential contract over $1,000 has to say, and the ROC's contract requirements page points to the same statute. A.R.S. 32-1158 lists the contractor's name and license number, the owner and jobsite, the contract and estimated completion dates, the work, the total price, any deposit, the progress payments and the stages that trigger them, and your right to file a complaint with the Registrar, in at least ten-point bold type. Match the license number on the contract to the one you looked up, and have an attorney review the contract before you sign it.

The Consumer Financial Protection Bureau describes two kinds. A construction-only loan is usually shorter term with several fund disbursements, and you pay accrued interest until construction is finished. A construction-permanent loan converts to permanent financing once construction is done and amortizes the way a standard mortgage does.

Freddie Mac gives the same two descriptions. With a construction-only loan the balance is due when construction is complete, you can pay it off or convert it to a standard mortgage, and you apply for that mortgage before construction ends. Freddie Mac says that if you can't pay off the construction loan at completion, you pay two sets of closing costs. It also says a construction-to-permanent loan converts automatically, is often more expensive than a traditional mortgage, and that you should look for a lender who specializes in it. Here's how financing works when you buy a home in Arizona, and the loan terms for your build come from your lender.

Most of my part happens before you sign anything. I walk you through pre-approval and the buyer broker agreement first, and then I'll pull the zoning and ESL information the city publishes for the parcel, ask for the association's documents, read the Subdivision Public Report with you when there is one, and look up the contractor's license on the ROC's site. Contracts and association documents are the ones to have an Arizona attorney read. Here's how buyer agent pay works in Arizona.

Buying the lot before checking the zoning, the ESL maps and the association documents is the first one. Treating the association's approval as the city's permit is the second, because they are separate approvals. A third is assuming a licensed contractor carries general liability insurance, which the ROC does not require. The last is a construction-only loan with no plan to convert it, which can mean two sets of closing costs, as Freddie Mac says.

Before the offer, you get the parcel's zoning, setbacks and flood hazard determination from the city, look up its ESL landform on the city's map, read the title commitment's Schedule B exceptions, and collect the association's declaration, rules and design guidelines (or the Subdivision Public Report, if the seller is the developer). After closing on the lot, the association's design committee and the city's plan review each look at the plans. The city issues the permit, inspects the work and issues the Certificate of Occupancy, and a construction-only borrower gives that certificate to the lender to convert the loan, per Freddie Mac.

Pick the lot or the two or three lots you're considering and send me the addresses or parcel numbers. I'll pull the city's zoning information, check the ESL maps and ask for the association documents so we're looking at the same facts. You can get in touch here or call me at (480) 203-6605. For the buying steps in order, here's how buying works in Arizona. For lots inside an association, here's gated communities and HOAs in Scottsdale. This describes the general process and is not legal, tax, or lending advice.