In This Article
The Seller Or Seller’s Agent
Building, Planning and Zoning, and Health Departments
Septic System Designers And Contractors
Water Treatment Providers
Yourself And Family View all LAND BUYING articles
See also Land Buying Checklist
In looking at land, there are many questions to answer before making an offer. Start with the most important questions (Can I build on the lot and use the lot as planned?) so you can quickly weed out parcels that will not meet your needs. If you are working with a real estate agent, start with him or her.
However, important questions should also be put to the proper authority or professional – such as town officials regarding permits, setbacks, zoning rules, and on-site sewage. If answers seem vague or merely an opinion (“As far as I know, you should be able to put a three bedroom on that parcel” or “I don’t see why you couldn’t subdivide”), find out who the controlling authority is and schedule an appointment.
When issues remain murky, get a second opinion. If at all possible, get a public official’s opinion in writing. (I had the head of a town Health Department put in writing that by purchasing a 1/3 acre lot contiguous to my own, I would be able to upgrade from a three- to four-bedroom septic system.) In real estate, only written communications have any legal validity.
In most cases, you will not know everything about a parcel before bidding. For one thing, you do not want to spend any money on investigations before your bid is accepted. The remaining unknowns should be added to your bid offer as contingencies and investigated only if the bid is accepted.
QUESTIONS FOR THE SELLER OR SELLER’S AGENT
While you cannot absolutely rely on the seller or their agent for this information, it’s a good place to start and, in most cases, you will get accurate information TO THE BEST OF THEIR KNOWLEDGE. Most of these questions appear in other sections as well, where you can get a more authoritative answer.
- Is the lot buildable?
- Are there any liens, rights-of-way, easements, covenants, or other deed restrictions or encroachments on the property?
- What other construction is planned or possible on the surrounding land?
- Are there any protective covenants?
- Are there any common facilities (water, septic, road, etc.), or common property that the homeowners or developer will need to manage. How will this be handled?’
- Will there be a homeowners association and fees?
- Are any portions of the parcel designated as wetlands or floodplain?
- Does the site have access to electrical power, natural gas, town water or sewer?
- Is there potable water on the site? What flow rate and water quality?
- Has as a perc test been completed? A septic design designed? Conventional or
- Are the boundaries clearly and accurately marked?
QUESTIONS FOR THE BUILDING, PLANNING AND ZONING, AND HEALTH DEPARTMENTS
If the sellers or agent’s answers sound acceptable, and you are pretty serious about the parcel, your next stop should be the town or county offices of the Building, Planning & Zoning (zoning questions), and Health Departments (water and sewer questions). Some issues may be handled by Building or Zoning, depending on the town.
- Is the lot buildable?
- How many bedrooms are allowed?
- What are the setback requirements for houses, porches, decks, outbuildings, or anything else you plan to build?
- Can I locate the building on the lot where I want to?
- Is there adequate road frontage or a suitable right-of-way for building?
- Is the road publicly maintained?
- Are there restrictions on house size, height, lot coverage, or other restrictions.
- What permits and fees are required and what are the costs? building, electrical, plumbing, porch, patio, well, septic, driveway?
- Are there impact fees or special assessments? What is the cost?
Zoning and Planning Department
- What is the property’s zoning district? Does your house and other uses you have planned, such as an in-home business, duplex, guest cottage, chicken coop, etc., comply with the zoning?
- Are you in a Special Zoning District? Any wetlands or floodplain on the property?
- Was the lot legally subdivided?
- Can I subdivide the lot (if that’s part of your plan)?
- What lot coverage is allowed, and how is it calculated? (This determines what percentage of the lot you can cover with structures. Some count decks, porches, and driveways as well)
- Are there any restrictions due to wetlands, flood plains, water frontage, steep slopes, endangered species, historical or cultural sites, or other issues?
- Any tree-cutting or land clearing restrictions?
- Any other restrictions you should be aware of?
- If town sewer service is available what is the total connection cost, including fees?
- Is there a valid perc test on record (some expire in 2-3 years)? What type of septic system is permitted? For how may bedrooms?
- Has a septic design been completed?
- If the land is not perc tested, can they recommend names of companies authorized to perform the testing?
- What tests are required (deep hole, perc) and what time of year can a perc test be done in this jurisdiction?
- Does the area where you are looking typically have trouble with high water tables for poor soils for septic systems? If so, what types of alternative systems are allowed?
- Are there any known problems in the area with well yield or water quality? How deep are typical wells in the area?
QUESTIONS FOR THE UTILITY COMPANIES
You’ll need to find out what companies can provide electrical power, natural gas, and other utilities to the building site (ask the seller, agent, or a neighbor) In some cases, you’ll have more than one choice, but for budgeting purposes, the costs are likely to be very similar. Have your street address and parcel number handy when you contact them.
Also provide them with a site map showing the planned location of your home. It may make sense to talk to an electrician or plumbing before contacting the power or gas company to see if they can do some of the work for less money than the utility company.
- Can your company provide power to my building site?
- Will the lines run on poles or underground? What will be the total costs be to bring power to the home, including fees, trenching, and meter installation?
- Will any trees or other obstructions need to removed to reach the home?
- Can natural gas be brought to the home?
- What will be the total cost to bring gas into the home, including fees, trenching, and meter?
- What are your options for phone, cell phone, cable or satellite TV, and high-speed Internet?
- How much can you save by combining multiple services from a single vendor (it also can simplify your life)?
- What are the setup fees and monthly fees?
QUESTIONS FOR THE SEPTIC SYSTEM DESIGNER AND CONTRACTOR?
- What type of system is the most economical and reliable?
- If an alternative system is required, what are the options with pros and cons?
- Where on the lot can the system be placed?
- How much will it cost to install, including permitting?
QUESTIONS FOR THE well DRILLER
It’s good to speak to more than one driller. Also neighbors can be a good source of well info. Finally, check with your local health department and the Dept. of Environmental Protection to see if they are aware of any well water issues in your immediate or surrounding area. Although water tends to move slowly through the aquifer, a problem a couple of miles away, like leakage from a landfill, could become your problem a few years down the road.
- How deep are neighboring wells?
- What are flow rates and water quality of nearby wells?
- What are costs to install the well (based on estimated depth)?
- What are the labor and material costs to complete the well and plumb to the house? (including pump, trenching and backfill, plumbing, wiring, pressure tank)?
- What water problems are common to the area, such as hardness, acidity, sulfur dioxide (rotten egg smell), other minerals such as iron, manganese, sodium (salt), magnesium, and copper. Any evidence of nitrates or other potentially hazardous materials?
- What sorts of water treatment systems are commonly used in the area and what do they cost to install and maintain?
QUESTIONS FOR WATER TREATMENT PROVIDERS
Some water treatment issues need immediate attention. Others like hard or acidic water can be dealt with a few years later – or maybe never if the house is only used seasonally. If the water will need treatment, you should learn about the range of options and a rough estimate of costs. After a water test, any health-related questions need to be addressed and any offer should be contingent upon an adequate supply of potable water.
- What water issues need to be treated for health reasons?
- Which will affect smell, taste, staining, and other nuisances?
- Which will harm or reduce the efficiency of plumbing and household equipment?
- What treatment system do you recommend?
- How many gallons per day of treated water can the system produce with your well’s flow rate?
- Is the unit NSF-certified as a system (not just the individual components) to treat your specific water quality issue?
- What is the initial cost and operating cost, including power, additives, filters, and other consumable parts?
- What routine and long-term maintenance is required, and how long will the equipment last?
- Does the company offer a service contract?
- Are rental units available? How does the price compare with owning?
- How reliable is the unit in the installer’s experience? What are common problems?
Is there a written warranty and what does it cover? What is not covered? Has the company honored warranty claims, in the installers experience.
Any question that remains murky after speaking with town the seller, agent, and town officials should be run by your lawyer, or the appropriate professional: engineer, well driller, septic system designer, etc. If the answer from you lawyer is “that will take some research,” get an estimate of how much it will cost to find the answer and decide whether it is worth it. Most questions about legal ownership and encroachments will be answered during the title search. Depending on the characteristics of the land and nature of the deal, questions might include?
- Are water and mineral rights a concern in this area?
- What should I add as contingencies to the bid offer?
- How much time do I need to address these contingencies?
If bid is accepted
- If title problems are found, how much time and money will it take to resolve them?
- Will any variances be required to build what and where you like, and what is the likely outcome of applying for these variances?
- Will I be getting a warranty deed for the property? If not, should I purchase owner’s title insurance?
QUESTIONS FOR YOURSELF AND FAMILY
- Do you like the building site, the views, the sunlight, and breezes?
- Have you considered the four seasons?
- Is the site soggy or buggy in the springtime?
- Have you visited the site different times os the day?
- What changes are likely over the next several years: new roads, housing developments, strip malls? Are your views and peace and quiet likely to last?
- Can you afford the land and development costs?
- Do you like the neighborhood, schools, and property tax rates?
- Distance to work, recreation, shopping, banking, medical care, etc.?
- Any nuisances to be aware of, for example:
• noise from a an industrial site, gun club, nearby snowmobile trail, or airline flight path overhead
• smells from a pig farm, or silage spreading in the spring or fall
• chemicals from a golf course, agriculture, or an industrial site
What Will Utilities Cost on New Lot?
Hello I am planning on buying a lot in Cabazon city, CA Below are some questions I have before considering buy it also attached is the lot parcel#. How much would it cost me to put utilities put in.
Is the lot buildable?
How many bedrooms are allowed?
What are the setback requirements for houses, porches, decks, outbuildings, or anything else you plan to build?
Can I locate the building on the lot where I want to?
Is there adequate road frontage or a suitable right-of-way for building?
Is the road publicly maintained?
Are there restrictions on house size, height, lot coverage, or other restrictions.
What permits and fees are required and what are the costs? building, electrical, plumbing, porch, patio, well, septic, driveway?
Are there impact fees or special assessments? What is the cost?
What is the property’s zoning district? Does your house and other uses you have planned, such as an in-home business, duplex, guest cottage, chicken coop, etc., comply with the zoning?
Are you in a Special Zoning District? Any wetlands or floodplain on the property?
Was the lot legally subdivided?
Can I subdivide the lot (if that’s part of your plan)?
What lot coverage is allowed, and how is it calculated? (This determines what percentage of the lot you can cover with structures. Some count decks, porches, and driveways as well)
Are there any restrictions due to wetlands, flood plains, water frontage, steep slopes, endangered species, historical or cultural sites, or other issues?
Any tree-cutting or land clearing restrictions?
Any other restrictions you should be aware of?
I really appreciate your fast response thank you
You’ve got a great list of questions — a good place to start your research. It’s a lot of work, but better to know all this ahead of your land purchase. You live in a high-cost, heavily regulated area, so you can’t take anything for granted.
Sorry, but I cannot possibly give you realistic numbers for utility costs (and if I threw out some numbers, you shouldn’t believe them). This is very specific to your site characteristics and local utility fees.
If you haven’t already, I suggest reading the article son budgeting for site development and typical site costs, which includes some broad ranges of costs. Where you fall within this range – or outside it – will depend on a number of factors:
In addition to the hookup fees charged by the utilities for all of the above, you will need to pay for any trenching, piping, are wiring costs for work on your property. In general, you pay for the work on your property and the utility will make the final connection. For well and septic, there are permitting and inspection fees from the town or county in addition to the installation costs and hookups to the house.
Best to contact the individual utilities for their estimated costs as hookup fees can vary enormously.
Bryan Connolly says
Should I Have Engineer Survey Building Site?
I am purchasing a lot in a sub-division in Massachusetts (8 parcel subdivision that is new). the lot is level and appears to be free of wetlands based on Town and State GIS system. Have been told the soil has a lot of clay.
We are planning on a slab foundation and will have Municipal water and sewer connections (currently stubbed to the property line).
My question is to do my due diligence do I need a full blown civil engineer survey done? Or can I have a simplified version focusing on water runoff, soil stability (to support the structure, which will be single story home and garage), etc (what else should I be concerned about?).
Thanks for any guidance you can provide.
Well, the more information the better, but you have to balance that against the cost.
In a subdivision with a reputable developer, they should have already done a full survey and a fair amount of site engineering. So I would start by asking the developer for any existing reports on site conditions.
Most likely, the simplified engineering review would be adequate. With soils high in clay content, you do need to be concerned about soil strength, drainage, and stormwater management. Septic systems are a challenge, but it sounds like you will be tied into a municipal system.
With site drainage, the development plan and execution are often more important than the initial site conditions. Assuming the developer is building a road, storm sewers, and other drainage features such as culverts and swales, the quality of the engineering and execution are a concern. On a high and dry site, it’s not so critical. On a site with a lot of surface water and subsurface water to manage, it can be critical.
We once built a house in a development near the bottom of a large hill. Water was running through the foundation excavation in the springtime, but the completed foundation was dry as a bone. Lots of gravel under the house, a good sewer system, swales and a few well-placed surface drains handled all the water perfectly.
So I’d have the engineer review the developers plans, take a look at the site, and give you a professional opinion. If he feels further investigation is warranted, you can decide how far to go.
Also, take a look at other developments by the same company. There’s no substitute for integrity and competence.
Glenn McHenry says
How To Buy Land in Another State?
I came across your site while trying to figure out how to purchase land to retire to. I am in my late 40’s and I and my wife are looking to buy land in Nevada to retire to (around 20-40 acres).in about 10-15 years. Most of the land I’m finding on various sites are listed as vacant land/undeveloped and have no utilities and most no developed roadway to it. We live several states away so it is difficult to do onsite inspections and tours of the various properties. I’ve started reading through the various information you provide and it is a wealth of knowledge, I figured if I bought now, by the time we retire it would be paid off and possibly have a house built but now I seem to be overwhelmed at all the facets of buying vacant land. Do you have any words of wisdom that I can start with on this journey? Thank you for your time and the really wonderful articles.
Can’t say I know much about the specific development rules and regulations in Nevada (I’m in New England). But my guess is that, like most places, it is more restrictive in and around cities and large towns and less restrictive in more rural areas. But don’t make assumptions. Find out as much as you can about the area where you are planning to purchase land.
Despite some limited consumer protections in some areas, wherever you buy vacant land, the governing principle is still “caveat emptor” — let the buyer beware. That means that the burden falls largely on the buyer to evaluate the property and the surrounding area. Seller disclosure laws vary from state to state and county to county, and fraud (using outright lies about significant issues to sell the property) is illegal everywhere, but proving fraud and recovering for your loss is never easy.
If I were looking to buy land out of state, the first thing I would do is familiarize myself with the local regulations, especially around septic systems and zoning. What are the accepted uses of the land you are considering and the neighboring properties? Also at the top of my list would be drinking water, and utilities such as gas and electric. What are your options and costs? Does the site have any water or drainage issues (in your area I would be concerned about flash floods during heavy rains)?
While I might do preliminary research online, I would definitively make a site visit early on to get the lay of the land, and make site visits to properties of interest. I would pay a visit to the local building and zoning department and ask them what they know about upcoming development plans in the area. Is there a regional development plan which designates which areas are marked for high-density development, commercial development, major roadways or other infrastructure like an airport, for example. Also ask about what challenges you might face in developing vacant land in their area.
I would also try to find a reputable and knowledgeable buyer’s broker to do some of the legwork and help you evaluate the properties. Working with a buyers broker is no guarantee that you will get a good deal or avoid common pitfalls, but it’s better than throwing darts at a board. If you find the right person, he/she can make the process go a lot smoother. (Just keep in mind that the broker wants to make a sale sooner or later or they do not get paid. They are representing your interests in the transaction, but also have a strong incentive to complete a sale).
Once you’ve narrowed your search to a few lots, work with the broker to develop a pro-forma development budget for the land. If necessary, contact local subcontractors or utilities to get rough estimates for septic systems, road work, utilities, etc. By all means, walk the land, identify the boundaries, and take stock of what is on the surrounding properties. If there are neighbors, you can learn a lot by knocking on their door and asking lots of questions.
Make a list of the issues most important to you — views, peace and quiet, privacy, nearby amenities, public utilities, etc. Rate the land now and how you think it might be in the future.
Since you don’t plan to build for 10 or more years, do the best you can to project 10+ years out. Is the quiet patch of land you are considering likely to be quiet in 10-15 years, or in the middle of high-density suburban development with shopping malls and freeways? You can’t foretell the future, but you can get a good idea by asking the right questions of the right people.
Finally, consider buying a developed lot in a subdivision from a reputable developer with a good track record. You will pay more up front, but many of the savings you obtain from buying vacant land will evaporate as you slog through the regulatory hurdles and bring in all the infrastructure necessary to make the lot buildable and habitable.
Hope that gives you some useful ideas for starting the process. The more research you do up front, the fewer risks you take, and the fewer headaches you are likely to encounter. Once you have enough knowledge to proceed with confidence, you should be fine. You won’t know every last thing until you actually get into the project, but you should know enough to steer clear of financial and regulatory shocks that can derail a building project at the outset.
Hi, I just came across this site. If you haven’t bought in NV yet, and are still considering it, let me give you some food for thought …
I have lived in Northern Nevada for 40+ years. If you are looking to buy property in No NV (by the amount of land you’re looking for, perhaps Pershing or Northern Washoe counties?) be aware than NV has the highest amounts of naturally occurring arsenic in its water system, and its very hard, too. Water filtration and purification systems are highly recommended. I grew up with a home on 5 acres in Dayton (Lyon Co) with a well, and Mom & Dad did NOT put in a water system (house built in ‘78 … they didn’t know and it wasn’t disclosed) … many plumbing problems 15 years later, well pump had to be replaced, and we couldn’t wash our white clothes at home … the water would turn them yellow. Sulfur smell was bad, too (but after a year, you got used to it). The house was built on river front property next to Carson River, so the water table was high and the well was only drilled to 100’, but they should have gone deeper because the water was 70 degrees out of the pump. Carson River also has a high mercury content due to mining and ore refining in the late 1800’s … that didn’t stop us from swimming and fishing in it constantly while growing up. I don’t seem to have any health problems from it (I’m in my early 50’s), and our dogs and cats all lived to their 20’s, so take that for what it’s worth. Ask about land use history if looking for land around boom town areas in NV to disclose any potential chemical dumping sites. Also be aware of improperly closed mine shafts, and random holes in the desert… the Nevada Dept of Mines does their best in sealing up old shafts, but it is amazing how often you come across them hiking or 4WD/UTV in the area.
I still visit the property frequently because my brother bought it when our parents retired and downsized. He still has lots of plumbing issues to this day, has another new well pump, even though he has now installed water systems. DO YOUR DUE DILIGENCE and all of the questions listed in this article are very good ones to ask … I wish my parents knew to ask them before they built their home (and now my brothers home).
Should I Trust Verbal OK by Building Inspector?
Great site with so much information!
You wrote this:
“If answers seem vague or merely an opinion (“As far as I know, you should be able to put a three bedroom on that parcel”…find out who the controlling authority is and schedule an appointment. When issues remain murky, get a second opinion. If at all possible, get a public official’s opinion in writing.”
Here’s my situation: I’m interested in a lot, and I contacted the town’s official by email. I asked a lot of questions (mainly the points you mention on your website) and this is part of the answers I got, from the Assistant Building Inspector / Fire Inspector / Civic Numbering.
“It should be a buildable lot as long as you can meet the set back requirements, 33 feet from the center line of the road, you will need highway approval for a driveway from TIR, you need to be 66 feet from any waterway or high water mark and at least 6 feet from a property line.”
Should I be concerned about the “should” in his sentence? …and if yes, who else/what else should I contact/do, since this is a town official person?
Thanx a lot in advance!
TIR? Are you in Nova Scotia where TIR handles roads and transportation? Is this vacant land or part of a subdivision? Is a perc test and septic system needed?
Vacant (undeveloped) land is always more risky to purchase than a developed lot in a subdivision, where the developer has done all or most of the engineering and permitting to establish that the lot is buildable for your project.
Public officials do like to hedge their verbal statements with “should” so they are less accountable if your project does not get approved. In their defense, they are making a statement based on incomplete knowledge of both the lot and your intended use – house size and height, number of bedrooms, commercial uses, etc.
Depending on the local approval process, your project may need approval from zoning, the health department, and the local or state highway department, in addition to the local department of building inspection. In many cases, there is a certain amount of discretion on the part of the individual processing the approval. There are a lot of opportunities to hit a snag.
In many cases, the problem can be resolved by modifying your project. In others, a special permit or variance is required, which is time-consuming and not guaranteed to succeed. Zoning is generally the most complicated issue to tackle, so I would recommend meeting with a zoning official in addition to the building inspector.
To reduce your risk, I would recommend scheduling a face-to-face meeting with the building inspector and zoning official (in some cases, the same person). Bring a plot plan and your preliminary house plans – or at least the footprint of the house marked on the plan with the appropriate setbacks. Ask whether he sees any potential problems. If the driveway or curb cut is a potential problem, then you should speak directly with the department (TIR) that handles this.
I would ask for a written opinion, but I have had mixed luck with this. In one case, the building inspector told me verbally that I “should” not have any problems based on the renovation plan I showed him. However, when I went to get the building permit, he said I would need to apply for a special permit from the zoning board. This process took several months and a lot of aggravation.
Finally, you can add contingencies to your offer, making it subject to the necessary approvals. In most areas, it takes 2-4 weeks to get a building permit once you have detailed plan to submit. It may be difficult to get the seller to wait more than 30 days for you get all permits and approvals, but this “should” give you enough time to get at least preliminary verbal or written approvals. The only way to eliminate all risk is to buy land in a subdivision where all this work (except for the building permit) is done ahead of time. Building permits are relatively straightforward unless you have an unusual project that falls outside the limits of the building code.
Should I Buy Non-Conforming Lot That Was Denied Variance?
Hi, what a wonderful site. It has immense wealth of information. Well done guys.
I live in central NJ and want to build a house. I have a question about buying a lot and I have found one that fit my budget and is in the area I am looking to build in.
I asked the listing agent to send me the survey for the property and he tells me there is no survey report available . I called up the town ship and they also do not have any survey but they sent me a copy of a letter written to a previous listing agent stating “I am in receipt of your letter dated March 23, 2016 with regards to the above-referenced property.
Please be aware that the subject property is currently zoned RR/C. You can access the permitted uses in that district along with the bulk and area requirements on the Township website http://www.westwindsortwp.com. Go to the Code Book section and reference Section 200-156& 157.Please note that the subject property is non- conforming in lot area. The zoning requires a 3 3 acre lot in order to build a single family dwelling. The subject property is only. 75 acre. I am enclosing a Zoning Board of Adjustment Resolution dated April 3, 2003 in which a lot area variance for FAR( Floor Area Ratio) to construct a 3, 569 square foot single family dwelling was denied. Please keep this in mind when marketing this property”
Does this mean that there is no way I could get permission to build a single family home or it can be granted after fulfilling certain criteria and paying fees etc. there are houses built across the road on smaller lots 0.69 acres. Not having a survey report is that a red flag .
Your input is eagerly awaited. thanking you in anticipation.
I would proceed with great caution on this lot. If it’s a great spot at a reasonable price, it may be worth further research and, if things are looking promising, to make an offer to purchase.
However, any offer to purchase the lot needs to be contingent on your getting permission to use the lot as you envision. If this means obtaining a variance from the town – and it sounds like it does – this process could take a few months or much longer. However, the owner may not wish to wait that long to see if the deal closes, so he may reject your offer and you may have to walk away. The main problem is not the lack of survey; it’s the problems you may face trying the get a building permit.
A “non-conforming” lot is one that does not comply with current zoning regulations – for example, one that is too small to build on. A non-conforming building is one that does not comply with zoning – for example, one that is built closer to the lot line than required by setback limits.
To build a non-conforming building or to build on a non-conforming lot requires a variance or, in some cases, a special permit (essentially a low-level variance). You should prepare your strongest case together to apply for a variance or special permit, but there is no guarantee that the Zoning Board of Adjustment (ZBA) will grant it. The more professional your appeal, sometimes prepared with the help of a lawyer or architect, the greater your chance of success, but again there’s no guarantee.
Also, abutters to the property are served official notice and allowed to weigh in. Their support or objections can sometimes sway the board’s vote on the variance.
The fact that a variance to build a single-family house was already denied is not a good sign. The ZBA hearing is typically a matter of public record, so you should be able to obtain a transcript and find out why the variance was denied. Knowing the reason for denial could help you evaluate your prospects for success. ZBA decisions are not always consistent or completely logical. In some towns these are volunteer positions with no formal qualifications. You can go to court to appeal a zoning decision, but it usually not worth the cost or effort.
The fact that houses in the same neighborhood sit on smaller lots may not matter. Zoning rules change over time. If the other lots were subdivided when the area had ½ acre zoning, for example, then the lots were suitable at that time. In many towns, zoning rules are “grandfathered” from the time the lot is subdivided. Even if the lot is developed many years later, the older zoning rules still apply.
So it sometimes takes some digging, often with the help of a real estate lawyer, to figure out the applicable zoning standard for a lot. Also, don’t hesitate to contact the a town zoning official to pick their brain — preferably in a face-to-face meeting. It’s free and you can often learn a lot.
If you do make any offer, I strongly recommend that you use a lawyer to write, or at least review, your offer. Pay particular attention to the length of your inspection period and the zoning contingency. Also make sure that your earnest money is held in a safe escrow account (approved by your lawyer), so that the money will be returned to you in full if you cannot get the necessary approvals.
Because of the time required to get the necessary approvals (during which time the lot is off the market) the seller may want to keep a portion of the deposit if you back out – in essence, you would be purchasing an option to buy the land during a specified period. This is common in commercial deals, but could also make sense in this case if you feel you have a good chance of getting your development plans approved.
Best of luck with your land purchase!
Utilities Included on Unimproved Land?
The seller is selling land and saying he is adding the utilities “for free”. What does that mean?
“Adding utilities for free” could mean a lot of different things. I would ask the seller exactly what he means and include language in your offer and purchase-and-sales agreement (P&S) that reflects the details of his offer. Include specifics about what he will provide and the timing of any improvements.
If there are municipal water or sewer lines nearby, he might be paying to bring these to the edge of the site. He may be doing the same for power and phone.
He could also be offering to drill a well or provide a community well and/or septic system shared by more than one lot.
Whatever he is offering, there will probably still be costs to the buyer such as extending the lines to the house (trenching and pipes/wires), utility hookup fees, and completing the well system.
You can read more here about budgeting for site development and making an offer on land.
Best of luck with your land purchase!
L Shields says
Should I Buy Land Falling in Value
Is it a good idea to purchase a lot that is depreciating in value? I’m in the process of a first time buyer land deal, but quickly realized the appraisal value on this land has been decreasing alot within the last few years. Should I still purchase it?
It’s better to buy now than when the price was a lot higher. But is it going to fall further? That’s never an easy question to answer. If you are buying the land for investment purposes, buying a lot with decreasing value doesn’t sound like a good idea, unless you have reason to believe that the trend is about to reverse and the price will go back up. Is your time horizon a few years or a few decades?
In general, vacant (undeveloped) land values are more volatile than house prices, so buying vacant land is inherently more risky than buying a ready-to-build lot or a house.
If you are buying to build a house that you plan to live in for many years, then the decreasing value might be less of a concern.
However, I would still be cautious and would want to know why the value has been falling. Is this a trend for the surrounding area or just this lot or neighborhood? Are there issues that are driving the price down that you are not aware of? A new highway or industrial park planned nearby? A toxic waste site discovered nearby? Is it in a newly designated flood zone? Problems with zoning or with the regional economy? Has a perc test been completed? Is there potable water?
What do you find attractive about the land? Views? Convenience? Sunny, south-facing? Mature trees? Do you think others will find the same features appealing?
Once you understand the cause of the falling land value, then you can better judge whether buying the lot would make financial sense for you. If you can’t figure this out on your own, consider paying an independent appraiser a few hundred dollars for a professional opinion. Appraisal is part art, part science, but an experienced appraiser has a lot more insight into pricing trends than the average buyer.
If you are planning to borrow money for the purchase, be aware that many banks are reluctant to lend on vacant land, especially larger parcels which can be difficult to appraise or resell. They are much more comfortable lending on fully developed lots in a subdivision which are ready to build on.
Make sure you do your homework and do not end up with a bargain lot that is unbuildable or difficult to resell.
Bill Marland says
Should Land Seller Disclose Subdivision Plat?
Should the developer or his agents provide a plat upon request of the individual lot I intend to buy prior to me signing a contract offer? I would like to know if there are any easements or non-buildable areas, setbacks, driveway restrictions and see the proposed building envelope before I go to the trouble of getting a pre-approval letter and paying for an attorney to review the contract. The lot is improved land with water, electricity, natural gas and sewer already in place, so the land has to be platted. The sales agents are telling me the developer doesn’t want to supply this until after I submit an offer. Sounds a little backwards to me. Thank you.
Sounds backwards to me as well. Before making an offer, it’s absolutely reasonable to get a full description of the property, as well as a copy of any protective covenants that go beyond the standard zoning regulations that apply to this district. Setbacks, lot coverage, and driveway placement are typically governed by zoning, but rules within the subdivision may be more restrictive.
In general, any numbered lot in a subdivision should have a plat map that shows the approximate boundaries and dimensions, along with any easements, roadways, flood plains, and other survey details. Most plat maps are recorded with the county registry of deeds and are public records. Protective covenants and HOA rules may also be recorded, but should be provided by the seller.
You could probably get most of this information from the town or county registry, but the fact that the developer does not want to provide it sounds like a red flag to me. It doesn’t necessarily mean he is hiding anything, but it may reflect an attitude of someone you’d rather not do business with going forward.
Depending on how the deal is structured, you may have continued dealings with the developer for some time and need to rely on his performance to provide roads and other infrastructure. He may have the power of design review over what you build. Or it may be the sort of deal where you buy the land and never deal with the developer again. Best to understand these issues before proceeding.
Best of luck with your land purchase and new home!
Karen Beskau says
Can Devloper Build on “Green Space” Next Door?
Can a developer sell you a corner lot, and tell you the land between you and the corner is “green space”, so you won’t have anyone next to you, and charge you a “premium” for a corner lot — then after your house is built, decide to sell the “greens space,” since it was bigger than they thought, so now you don’t have a corner lot anymore?
Our house was designed and built for a corner lot, and now will have large windows looking into the new house.
Is there a way to stop the developer from selling that green space and make our lot an actual corner lot?
This is a legal question and I am not a lawyer – so I suggest you find a lawyer with a lot of experience in real estate litigation (not just attending real-estate closings).
Your experience sounds extremely frustrating on several counts. You feel you were mislead by the developer which cost you real money in the premium you paid for the lot. Also your house plan is compromised and you don’t have the privacy or views you were promised.
On the face of it, it sounds like you have valid claim to either be compensated for the loss of value in your home, or to stop the land from being developed. In buying vacant land, it is largely up to buyer to investigate the conditions of the land. An exception to this is fraud, defined the legal self-help publisher Nolo.com as “intentionally deceitful or misleading words or actions that wrongfully benefit the perpetrator of the fraud at the personal or monetary expense of another.”
My guess is that you will have a pretty strong case if you have anything in writing documenting the developer’s description of the “green space” and connecting the price of your lot to its bordering on undeveloped land. Was this supposed to be common land owned by a homeowners’ association (HOA)? Is the green space part of the site development plan approved by the local zoning board? Did the developer commit to the town or the other homeowners that this space would remain undeveloped?
You can do a little research yourself by visiting your town’s zoning office and requesting to see the site development or subdivision plan (also called a plat), which should be part of the public record. Ask to meet with the zoning office to discuss the subdivision plan and see if the town might be willing to get involved.
In most cases, however, you would need to take legal action, or at least threaten to take action, to persuade the developer to change their plan. In any of your neighbors are impacted by this, they may be willing to join you in your effort. The first step is to arrange a brief meeting with a lawyer to describe the situation and see if you have a strong legal case. Ask what are your options, the associated costs (in time and money), and the likely outcome of taking legal action.
To make efficient use of the lawyer’s time and get a meaningful opinion, you should do as much homework ahead of time as you can, bringing along any documentation of the developer’s promise that the lot next door would remain as green space. Best of luck!
Can Builder Help Evaluate Lot?
First of all, thank you very much for your great information and advice! Like your website, it’s really helpful.
My question is, will a builder objectively evaluate a lot for me even though I don’t yet know whether I’ll eventually select that builder to build my home?
Here’s the situation. I want to build a modular home, have a general design in mind, and am looking for land. I’m considering three different reputable manufacturers, each associated with a different local builder. Because my lot characteristics will affect building costs, I’m told I need to choose a lot before I can get total cost estimates from these three manufacturer/builder teams to compare. I’ll then select a manufacturer/builder team based on what they can provide (including quality per spec info), price, and whatever else I can find out including builder reputation.
Since I can’t know who my builder is until I get bids, and can’t get bids until I have a lot, is there a way to obtain a builder’s objective advice on a lot? It seems awkward. How do you recommend I proceed? Thanks!
If these builders are willing to take a look at the lots you are considering, by all means I would accept their offer. My guess is that you will get similar feedback from all the builders as the site issues will be more-or-less the same for all three. Getting the opinions of two or three builders should help you assess the pros and cons of the various sites. The more information you get about site development costs and issues, the better.
In general, the cost quoted by the modular manufacturer only cover the cost of the building delivered to the site. They do not typically include the foundation, utility hookups, site work, paving, landscaping, well and septic (if needed), permitting, and on and on (see Budgeting for Site Development). Using modular construction can still save you money, but not nearly as much as you might think based on the net cost of the modular.
Once you’ve settled on a particular site, you should try to get turn-key pricing from the builders. If you don’t have a lot of experience, it’s can be hard to recognize what is NOT covered in their bid. Ask lots of questions, including “Are there any other costs I should anticipate before this house is ready to move into?” Compare the bids, not just on price, but also on specifications and what exactly is included and excluded from the bid. Making an apples-to-apples comparison takes some effort.
Read more on Modular Home Cost Savings
Who Can Help Evaluating Lot
We are looking into buying a piece of undeveloped land. Do you recommend a contractor takes a look at it before buying (or civil engineer)? Our concern is that once we go to build the lot is not as build-able as we thought. We want to avoid any sticker shock after buying the land.
That’s a great question and I wish there was a simple answer. If you are buying a house, you hire the best home inspector you can find, but who do you hire to inspect a piece of land? Undeveloped or “vacant” land is far more difficult to evaluate than an existing home.
If you have a specific question, then you can consult with or hire the appropriate professional — for example, a septic system designer about perc testing and on-site sewage, an excavation contractor about site work, or a surveyor about boundaries, easements, and issues such as protected wetlands or flood plains which should appear in a current survey.
A seasoned general contractor who has purchased and developed vacant land could certainly be a good resource and could help you identify the big cost items and help with preliminary budgeting, if you can find someone willing to share that information. Anyone who has built at least a few spec homes in the area on unimproved sites is well aware of the issues and costs involved.
A civil engineer could also provide a good, independent overview of water and drainage problems and other site development issues as they deal with these on a regular basis. A geotechnical or soils engineer might be appropriate if you have specific concerns about soils conditions, such as filled land, expansive clay, or poor soils such as peat. The trick will be finding someone experienced with small-scale residential development such as single family homes. Most engineers (and land development consultants) work on larger scale projects with multimillion dollar budgets.
Contractors or architects can provide you with names of suitable engineers. Interview a few on the phone, focusing on small firms or sole practitioners. Tell them what you need them to do, ask if they are a good fit for this, and what they would charge.
To make the best use of your time with an engineer or other paid consultant, bring a written list of your questions and concerns along with a description of your preliminary building plans and any site plans, subdivision documents, protective covenants, or any other deed restrictions you are aware of. Also bring any existing perc test reports, well yield reports, or other relevant documentation you can put your hands on.
Best of luck with your search for a great building site!
Who Builds The Road to Our Lot?
We are looking at a piece of property that does not yet have road access. We know where the right-of-way is and where the road would go. My question is who is responsible for getting the road put in? Who do we contact to get information like the time-frame and our potential cost?
Who is responsible for the access road or driveway depends completely on the conditions of sale. If the lot is in a development, the developer would typically build the road to your lot line. In other cases, they buyer would be responsible unless you negotiate otherwise.
You, or your real estate agent if you are using one, should start by asking the seller about the road – who is putting it in, when, and what type of road. If the seller is building the road, make sure this is put in writing. If it’s not well documented, then you should make your offer contingent upon the road being completed before you close – or later if that’s agreeable to you.
If the seller is not building the road, you can make your offer contingent upon your getting a suitable bid for the road (within, say, 14 days). If your offer is accepted, you will need to contact one or more companies to get an estimate from an excavation or paving contractor.
One thing to keep in mind is the right-of-way. This is a legal issue and might need review by a lawyer before you proceed. You would need to make sure that the right-of-way is legally valid and is consistent with your plans. If there is any uncertainty on your part, I would make the right-of-way and your usage of it a contingency of your offer. You may want a real-estate lawyer to help write, or at least review, your offer.
Should Seller Remove Tree Stump?
I have recently bought a piece of undeveloped land. The seller has cut down a tree and left the stump, hiding it under the wood chips on purpose. Is that legal? How can I legally make the seller pay for removal of tree stump?
The answer to these kinds of questions is never black and white. That’s why there are so many lawyers!
Disclosure laws requiring sellers of real estate to disclose “defects” vary from state to state, and are generally stronger with respect to homes than to land. Unfortunately, with land, the operative rule is often “caveat emptor,” which means “Let the buyer beware.”
Also, a stump would generally not be considered a “defect,” like buried toxic materials. On the other hand, if the seller promised you that he would cut down the tree and remove the stump, then he is bound by contract to remove the stump. If such an agreement is in writing, then you’d have a much stronger case. If he simply said verbally, or in writing, he would cut down the tree, but did not mention stump removal, then it is less clear who would be responsible.
At the end of the day, the practical question is how much of your time and money you want to expend trying to get the seller to remove the stump. One meeting with a lawyer could easily cost you more than the cost to remove the stump. And in Small Claims Court, it’s not clear that you would win unless the seller specifically agreed, in writing, to remove the stump.
Keep things in perspective. If this is the biggest (and most expensive) surprise that you encounter in buying and developing the lot, then you are luckier than many buyers of raw land. For most people, a land purchase is much more difficult to evaluate than a house. Land development expenses, which can run into many thousands of dollars, catch many buyers by surprise.
A recent question om buried debris addresses many of the same issues.