Questions about purchasing property to build on.
Hey guys! I'm brand new to this forum, but not new to construction. Let me start off by saying I'm 22 years old, and I'm looking to build my own home. I've worked in all aspects of construction from the time I was 15 until the last company that I worked for went under 2 years ago. I've worked on a few projects since that time. I did an addition on my brothers home, and also built a detached 24x30 garage, So I'd consider myself "ready" to tackle my own house.
Before I can do that I need to purchase a piece of property. This is one part of the job I've never had to deal with personally. I've found a decent lot that seems perfect for what I'm trying to do in a decent neighborhood with similar homes comparable to what I'm trying to build. The problem is it's been on the market for 1.5 years, and It's insanely cheap! So I want to be very prepared when it comes to dealing with the real estate company, and I want to ask as many questions as possible to make sure that this is a sound investment.
So far my main concerns are the water/sewage hook up situation, Which is pretty easy to deal with. If I have to dig a septic tank, and pop in a well or not, and the costs associated with hooking up to the city's. Of course I'll ask about zoning, making sure it is all in ordinance for me to build on the property. Beyond that I'm not really sure what questions to ask, or if there are any other questions TO ask.
If anyone has been through this process before please lend some advice and it will be greatly appreciated.
Thing to check at the county or city hall of records---
Are there any easements---gas--electric city sewer or other use that make building difficult or impossible.
Utilities---is electric and gas---sewer and water available? Cost for hooking in? Any huge tax or fee when that is done?
Septic----is the lot larger enough? Most areas require 1 1/2 acre for a home with a leach field---any thing smaller requires a mound system,if septic is allowed at all.----will the ground perk?
What restrictions apply to the size and placement of the house?
What will the property taxes be when the house is complete?
These are just a few things you need to know----Mike----
Bargain lots exist----don't assume there is something wrong without verifying---
The lot I built on was 'mismarked'----I had been looking for a long time and a lot the size I wanted looked like $40,000 to $50,000
I spotted one in the listing books for $19,000 --close to the river---I figured it was a swamp but checked any way---
Long story /short----great site---owners moved out of state 20 years ago and were old---they had no idea that the area had grown and the lot was worth much more-----I made an offer---and owned the property by the next afternoon.
This was 24 years ago----My brother in law offered this advice on making an offer--Make it an odd number---it will look like you broke open the piggy bank and counted up everything you have--and there is no more---
My offer was $17,745----they took it.
In your case....you made a profit the moment you closed the sale.....
So....was it swamp?
Nice and dry---the 'river rats' use my back gate when the roads floods out-----which has happened twice in the 20 some years that I have ived here.
common questions to be answered concerning a vacant lot:
1. lot dimensions
2. zoning requirements
a. yard setbacks
b. maximum building square footage (percent lot coverage) if any limits
c. maximum impervious lot coverage (if applicable)
d. height limitations
e. construction requirements based upon architectural style or color limitations (some zoning districts have requirements that you can only build a certain style home, or can only paint your home using certain colors)
3. conservation & wetland issues including buffer zones and limitations on construction
4. septic/sewer requirements
5. domestic water/well
6. drainage/stormwater runoff (some areas have requirements for pre-construction and post-construction drainage. does water flow onto your site, if so how much? are you allowed to discharge water from your site?)
7. FEMA Flood Zone
8. High Wind Zone.
most of these questions can be answered by paying your building official and zoning officer a visit. ask what local issues can/will affect your ability to build a new home on the lot.
Is the title clean or are their liens against it you might be liable for once you own the property?
I bought my first piece of raw property at about your age. I learned so many lessons. And if not in the market the property and house I built was? I would have lost a dumptruck full of moola. Fortunately property values escalated almost too rapidly and I got out. I have no patience for flippers, and crappy assed construction. I left a nice house with gorgeous landscaping for whoever lives in it now.
Biggest lesson I learned is pay the pipers. I understand there are commissions and fees involved but I never even explore property, from that first experience on my own and without a competent real estate agent. And I have found great closing attorneys all over the country that spot title and lien problems in seconds but still charge me for outrageous amounts of money? Saved me lots bringing the suits in before even offering most deals.
Of course I beat them all up for commission reductions and so forth. They are negotiable.
I almost got bit one other time buying raw land but the above suggested we find the pins marking the boundaries. The land someone was trying to sell me did not match the original plat nor the surveyors pins. Quick use of a metal detector saved me tons.
Thanks for the good advice. I may go down to city hall and see what they say about the plot. I'm having a hard time getting the real estate agent to contact me about the property, but I'm being patient. At the price point I can't imagine his commission being being very high on this deal, so I'm sure it's not his top priority.
Do your homework--if you decide to make an offer--talk to a real estate attorney first--they will be needed later at closing and will word your offer so you have an out if the property has hidden flaws.
Forget the listing Agent..they dropped the ball. Besides its the Seller that pays the commission to the List Agent, who then pays the Buyers Agent. Don't give them another chance if this, thus far is their level of service. It shouldn't matter if there is only a small commission for the list Agent to collect. They are doing a diservice to their Seller client and to you. What if you turned out to be a big time investor with a load to spend on several pieces of property. Or that you have a ton of friends all looking to buy. Big or small this person is not doing their job. In real estate, time is of the essence.
Hire yourself a Buyers Agent with the understanding that you do not pay any commission. Don't sign a Buyers respresentation contract unless you carefully read it. Make sure it is for that particular piece of property only and that you are not on the hook for commission.
A competent Agent can save you lots of money in Lawyers fees. He or she can hash out the whole deal, collect the survey of the property, make the calls to town hall to find out about all of the particulars that affect this property ect. .All at no expense to you.
The only thing left for the lawyer is to check for liens, prior discharged mortgage and make sure you get a free and clear title.
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