The location where you decide to buy land or a house is all a matter of taste and budget but there are still some important practical considerations which should influence your choice.
Here are a few things to think about to avoid mistakes.
On the whole, this is an idea that you can forget. These houses almost don't exist outside of towns. Of course, one of the very few renovated traditional houses by the sea will come on the market from time to time, at premium prices.
There are still plenty of ruined houses to be found but be aware of the fact that it is often more expensive to rebuild a ruin than it is to build a house from scratch. Part of the high cost of renovation is that anti-earthquake regulations need to be followed.
It is possible to buy land in an isolated area (provided you buy enough of it to get a building permit) but bringing in electricity (and water) may cost a fortune. Make sure that you know how much so that you can work out the total cost of building.
It is surprising how many people decide to build or buy property in Crete on the strength of what they experience during the summer months. They then might cut corners and build a house for warm dry weather and are in for a rude awakening when they spend their first winter here. These can be wet, windy and cold and a house without heating, good insulation and quality doors and windows will make for an uncomfortable stay. Even if you don't plan to spend winters in Crete, your house will need to be built well enough to last through these harsh months.
Crete sounds like a good place to retire: good weather (apart from the few miserable days that we get every year), lots of nature, almost non-existent criminality. But don't just look at the positive aspects, think long and hard about some less positive sides: Will you have enough like-minded people around you? How far are you from medical facilities? What happens if you cannot drive anymore? It doesn't mean that you shouldn't come and retire in Crete but it might affect the location you should choose.
Most people want a house with a sea view which means that they will
command a premium. If you can walk to the beach or are right on it
prices will be even higher. Assuming that you are able and willing
to pay more money for a great view, make sure that you are not in
danger of loosing it through other buildings in the future. Normally
an architect or civil engineer (an independent one, not someone employed
by the company selling the property!!!) should be able to assess
what the situation is.
If you still want a view but are on a limited budget, you can still find plots and properties with sea views (and mountain views, these are wonderful here as well) that are a little further away (5 or 10 minutes drive from the sea). Much better value and probably less likely to be overdeveloped in the future. The same caveat applies if you want to keep your view: get a house on a slope or make sure that no one can build between you and your view.
Avoid anything that is too far from a village unless you are willing to pay for the cost of bringing in water and electricity. In some instances, this could be higher than the cost of the house itself.
Do not touch anything without a clean ownership title (a lawyer will make sure that things are correct) and do not ever buy a plot that has not been approved for building by the forestry department (and in some instance by the archaeological department). In some instances plots are offered before these surveys are made but the sales contract should state clearly that your deposit will be refunded in full if your building application is refused.
Only buy an old house for renovation if you are aware of the costs of renovating it. Pay an independent civil engineer to survey the house and give you a cost estimate.