Sometimes, buyers can just look at a lot and imagine the possibilities. Sometimes, it's not quite as obvious and you have to show them. George and Pat Matarazzo of Wilmot, N.H., had owned a 1.8-acre lot near their farm for 15 years. They had tried several times to sell it as raw land, without success. The problem was that the lot included a good deal of wetlands. Potential buyers would take one look and keep driving.

But the Matarazzos knew what others didn't, the heavily wooded lot bordering a stream had potential.

So they built a spec house, to prove a home could be sited there. “People were nervous,” Pat says. “When we tried to sell the lot, they couldn't understand it. It was totally covered with pines and was clearly wetlands. Now they're saying, ‘Oh, what a beautiful spot.'”

Pat, who has worked in real estate and served as general contractor on the house, says that the key was finding the right house—one that would take advantage of the site's features and meet the local wetlands board's strict requirements, particularly those related to the location of the drain field.

The first decision involved determining the size of the house.

“The site would not support a McMansion,” says George, who is a land planning consultant for master planned communities and major developments. “We had to think small.”

That proved to be a strategic choice. Both of the couples who ended up making offers on the house were older professionals without children who said they were specifically looking for a smaller house that would be easy to manage.

The house the Matarazzos built was a stock plan Pat bought on the Internet from Hyannis, Mass., architect Kenneth Sadler Associates. The “Cape Cod Coddage,” as it's called, is a three-bedroom, two-and-a-half–bath cottage with the master bedroom on the main floor and a detached garage. Pat converted the plan's deck into a screened porch, added a fireplace in the living room and a walk-out basement, and made a few other minor revisions. The final version was 1,492 square feet.

The house's location was dictated by the need to be above flood level and by code requirements for distances between house and septic system. The highest ground was toward the back of the lot, near the stream.

George supervised the excavation of the lot and construction of a 300-foot driveway.

“You can hardly see the house from the road,” Pat says, “and from the screened porch, you can see the stream, which is very nice. I think the average person would have built it very close to the road and missed that whole view.”

Problems Into Assets The excavation—along with building the pump-driven septic system—proved to be the most expensive part of the construction process, but it also led to some of the site's most notable successes. For example, the 500 yards of fill the Matarazzos brought in to meet flood level requirements created the height needed to create the home's walk-out basement.

The Matarazzos also took advantage of their background in land planning to give the lot a finished look. Boulders and stepping stones uncovered during excavation were used to add character to the landscaping.

“In New Hampshire, a lot of people are digging foundations and burying the rocks,” George says. “We used them to define the driveway and put them around the exterior. All those things added great perceived value.”

They cleared a larger area than is typical, setting the house to the north so that the kitchen, dining room, and living room face south to take advantage of natural light. The bedrooms and the screened porch face the stream.

With an eye toward keeping costs down and completing the house before New Hampshire's severe weather arrived in late fall, Pat opted to use panelized framing. That decision helped keep the site clean, too. “When you're working on small parcels, that makes an impact,” she says.

Little Extras Several finishing touches helped the house sell quickly. On the exterior, the Matarazzos added scalloped shingles as accent details and a flat-rock walkway to the front door. They opted for Hardiboard siding, a relatively new product in the New Hampshire market, and painted it a soft white for a clean, elegant look.

Inside, they added built-in bookcases and installed sleek pedestal sinks in the baths.

Based on the lot and the selling price of comparable homes in the area, they had figured the house would sell for between $200,000 and $225,000. Within days of putting it on the market, they had two offers, and ultimately sold it for $265,000.

The buyers, Brian Nooney, a 52-year-old pharmacist, and his girlfriend, Susan Varoski, 45, a certified public accountant, loved it. They had been looking for a house for nearly a year and had almost given up when the house went on the market.

“From the moment I drove in the driveway, I said, ‘This is it,'” Nooney says. “We were dealing with someone who designed and put together the house with a lot of care. We liked the excellent quality materials, the attention to details—things you wouldn't find in a typical spec house. Pat packed in the usable space. We wouldn't want it any bigger. The first day I looked at the house was October 22. We closed on November 8. That's how much I wanted it.”

He especially loved the privacy of the location and how the house was positioned on the lot. “The house is damn near invisible from the road,” he says.

The wetlands, which had driven so many prospective buyers away when there was no house on the lot to showcase its assets, were a nonissue for him. “In 99 percent of cases, no one would want anything to do with this lot,” he says. “It's perfect for us.”

For the Matarazzos, the experience has given them the motivation to take their building business to another level. They're actively looking for more lots and are considering developing a small portion of their 150-acre farm.

“This whole thing worked because we took this problem site you could call a lemon, and [turned it into] lemonade,” George says proudly. “When people walked in the house, they were overwhelmed. It was so charming.”