Whether you want to build your dream house or hope to make a better profit in the future, vacant land offers a lot of flexibility. However, the buying process might yield some surprises. From zoning restrictions to environmental conditions, many considerations go into finding the right land for sale. Follow these simple rules to get it right and avoid buyer’s remorse.
Do: Work With a Realtor
A real estate agent experienced in land sales can use the knowledge and connections to find you a lot that fits your bill. Additionally, they will successfully navigate through negotiations, due diligence, and closing. Once you find the lot you’re interested in, an experienced realtor will educate you about the area and do extensive research. This will help you determine whether the plot is worth the money and save you from unpleasant surprises along the way.
Do: Understand Zoning
Zoning laws regulate what the land can and can’t be used for. Understanding these laws can help you find the right lot according to your intended purpose. If you’re working with a realtor, they can quickly learn what the land is zoned for. However, if you’re looking on your own, you can access zoning records at your city hall or city’s planning office — online or in person.
Do: Consider Other Restrictions
Beyond zoning, you should be aware of any restrictions that might prevent you from building the desired property. For example, in neighborhood developments, there’s likely an HOA that dictates the rules in the area. In addition, there might be legal setbacks, deed restrictions, and easements that might affect the average property size and type of property you can build. Covenants and ordinances can be very restrictive, so be sure to check the county Register of Deeds.
Do: Have Your Finances in Order
When buying real estate, it’s essential to know how much you can spend. Land purchases are often made in cash because lenders are less inclined to provide a loan or a mortgage for undeveloped land. Know the amount of money you have or can secure before purchase to determine your budget. Remember that proof of funds is also important when making a cash offer as it helps the land seller be confident that you gave access to the money.
Don’t: Assume You Can Have the Property Rezoned
If you want a specific lot of land badly, you could convince yourself you’ll be able to deal with zoning issues later on. However, there’s no guarantee that you will be able to have the land rezoned after you buy it. Therefore, if the land isn’t zoned for your desired purpose, consider making an offer but make the sale contingent upon getting rezoning approved. That way, if the zoning authority rejects your request, you won’t be stuck with land you won’t use.
Don’t: Underestimate the Cost of Building a Property
The land will likely be the most inexpensive part of your building project. However, you need to keep the cost of building on that land and how those expenses will fit into your budget in mind. On average, building a house costs $248,000. The cost per square foot ranges between $100 and $155 depending on the building’s size, location, and type of designs used. Building permit fees can be anywhere from $400 to $4,000. If you’re building on undeveloped land, you’ll also have to pay for bringing utilities to the site, which would cost you on average $4,220.
Don’t: Overlook A Perc Test
If the land you’re eyeing isn’t connected to a municipal water and sewer system, you need to do a percolation test on the soil. This test will inform you whether the soil supports a septic system. To pass the perc test, the soil has to filter a certain amount of water. Otherwise, you won’t be able to install a septic system, making the property virtually useless. To get a more accurate picture, conduct a few tests around the land.
Don’t: Overlook Natural Hazards
There are many fantastic properties that might have hidden natural hazards which could affect the ability to build and your safety. Make sure to check if the land is in a floodplain as you might not be able to obtain a building permit. Likewise, be aware of other hazards such as proximity to a fault zone, an increased propensity for wildfires, unstable soil, and highly erodible land.
Buying vacant land is an important decision. Every land buyer needs to thoroughly research the plot of land to ensure they can construct the property they want. While every situation is different, following the dos and don’ts we outlined here can make the purchase worth the work.