Things to Know Before Purchasing Your Land
It is always fun to start completely from scratch on a home-building project. By “from scratch” we mean all the way at the beginning with clients who are interested in purchasing a piece of land to build their home on. Gerard Construction is uniquely poised to help in these types of ventures because of the banking and financial background of one of our founders. There are a few key pieces of information you should know before we start signing the deeds for your new property.
What is Land Acquisition?
Land acquisition is the process of locating and purchasing a piece of property that has not previously been used with structures built on the land. In land acquisition purchases, a buyer will need to determine what they are in the market for before seriously looking at prospective pieces. Most of our clients are seeking out a piece of land for building a new home or second home, but other clients may be looking for investments, farmland, or even for speculative purposes.
What do I need to know financially?
Loans for land can be very different than loans for a standard home building project. According to Baratto Brothers, a team from the northern part of the country, a down payment for a raw piece of land can range from 20-50% of the property price. This amount is just for the land itself and should be kept in mind along with the projected price for the home building portion. The same team reminds us that land usually gains value as it is developed though, so “the rule of thumb is to start low and negotiate as you go along. Most raw land properties sell for 85% of the original asking price.” There is also a strong recommendation for hiring a surveyor and checking the plat for the legal description of the property. Both of these crucial steps will make sure you are fully aware of what you are purchasing and that there are fewer surprises when it comes to the building project itself.
What do you need to check?
- Zoning - this is a crucial step for any type of land acquisition. You will need to ensure that your intended purpose for the land is allowed by the type of zoning in place.
- Sewer/Septic Status - You will want to know ahead of time if your land is on the city’s septic system or if it will need its own septic system built in during the building process. If it’s the latter, you will need a professional’s help in determining if the land can support its own system.
- Wells - Just like the sewer and septic system, you will need to see how your building project and home will access water, whether that is through the city or by building a well. You may need to research the different types of wells and their advantages and disadvantages before deciding on a piece of property.
- Road Access and Easements - Knowing how you will get to your property and how much of the land is overlap with public property makes a huge difference in your day-to-day life.
- Utilities - While there is an occasional client who has other ideas about how to get power, most of our clients want consistent and steady access to electricity, Internet, and telephone services. Additionally, checking a cell phone signal at different points on the land and at different times of day may be important for some.
To begin searching for your next piece of land or for help evaluating land you already have your eyes on, please contact us today. We can start the search with you or jump in to begin building your home, we have the expertise and background to do both.