Purchasing a vacant lot for a home build can be a tricky process. If some nice “in-fill” lots have caught your attention, read on…
Before jumping into a vacant lot purchase, it is wise to learn everything you can about the space. A little research can help you uncover unexpected costs or difficult development situations. Liberty Homes is happy to offer input in this regard. We can handle most details and help you through the buying and building process. Should you decide to “go it alone,” here are some helpful tips consider:
1. Value: How much is the lot worth? If the seller is asking more than it is worth, or the site is depreciating in value, it probably won’t be a good investment.
2. Zoning: Study the zoning laws! The laws determine what type of structure can be built on the property. Is the land zoned for residential? Commercial? Mixed use? Are there plans for a new business or busy road to be developed 10 years from now? If the lot is residential, what type? Single-family? Duplex? Townhome? Check with the zoning office in your county or search the county’s online database to find this information.
3. Costs: Know all of the costs involved. When developing a lot, there are quite a few fees, such as utility connections, surveys, permits, and lot improvements (i.e. tree removal). You may also consider title insurance to protect you against any potential liens on the property.
4. Financing: How are you going to pay for the lot? Consider finance options for the buying the land and building the home. If you need to take out a loan you may be able to wrap the interest costs for the construction and lot loan into the home loan. FYI, our preferred lenders can save you a considerable amount of money, and under certain circumstances, it is sometimes possible for Liberty Homes to purchase the lot and wrap it into the cost of the build for you.
5. Utilities: Are utilities already installed on the lot? If not, plan on the added cost of connecting to the power company and city water and sewage. There may be some instances where you will not be able to connect (i.e., too far from the main lines), in which case you will need permits to drill a well for water and install a septic system.
6. HOA: Is there an existing HOA with CC&Rs? CC&Rs (codes, covenants, and restrictions) are regulations set by the developer or builder, and you agree to by virtue of your purchase. You’ll want to know in advance in they exist and if you can abide by them. Also, be sure your builder is aware of them. Sometimes CC&Rs may restrict the materials allowed on the home’s exterior, or they may determine if you can park your RV or boat on your lot.
7. Surrounding Area: Is the neighborhood already developed with sidewalks, gutters and fire hydrants? If not, some cities may require that to be done before residential building can begin. Also, Make sure there is road access to the lot if it is a vacant piece of land. Building private roads can be tricky and may require easements from your neighbors.
8. Survey: Get a copy of a recent survey or arrange to have one done. This determines the property lines and can detail flood zones, floodplains or fault lines. The plat map can also provide this information. If you are in “Zone A” there is a 1% chance of flooding per year and you will need flood insurance. Ideally, you would like the land to fall in Zone X or Zone C, where there is .1% of flooding.
9. Topography: Find the typography or slope of the lot and others surrounding it. Determine if the homes around your lot would be sloping toward your home, which could cause erosion or soil problems that could hurt the foundation if drainage is not occurring properly. In some cases, this can be prevented by a retaining wall or simply by grading the lot, which will help move the water into the street. This is of particular importance if your lot rests at the bottom of a hill.
10. Permits: There will be many permits (and their associated fees) that will be needed throughout the process. The homebuilder will usually be the one to acquire these. The key permits are for building, zoning, and utility connections.
Found your perfect lot in Salt Lake or Utah counties? We would be happy to help build your home! Call us at 801-839-4898 or email info@libertyhomes.com for more information.
Let’s get started!
Source: KimSongsak
