Recently we have seen an increase of buyers looking for bare land to buy
There are a lot of different reasons for this.
· Finding your dream home isn’t easy. And right now there is low inventory for homes for sale.
· You'll spend a lot of time to searching online listings,
· Going to Showings
· Driving around Scoping out neighborhoods – and you may still come up empty-handed
· Maybe your dream home just doesn’t exist yet.
· In this case, building a home on a vacant piece of land may be the perfect option.
· Whether you’re buying vacant land to build a home for your family or you hope to sell the plot for a profit in the future, follow these rules to avoid buyer’s remorse.
Our first DO… Do Work With an Agent to Find the Land
· Working with a realtor when you purchase a home helps you navigate the finer details like negotiations, due diligence and closing the deal. But when you’re purchasing land, it's important to hire a broker who has experience negotiating land deals specifically.
Our second DO --Do Have Your Finances in Order
· As with any home purchase, it’s important to know how much you can afford to spend before you start visiting properties. Know that land purchases are often done in cash, because lenders are less inclined to provide funds for undeveloped land.
· Take a look at the amount of cash you have or can secure before purchase, and determine your budget that way.
· Proof of funds is also important when making a cash offer, as it helps the seller feel confident that you have access to the money you claim to, like a mortgage preapproval does when buying a house. If your cash is tied up in other investments, take it out prior to making an offer to avoid a sudden loss of funds from an unexpected disaster.
Do Consider the Value of Homes in the Neighborhood
· One of the biggest draws of building your home is the ability to customize it, but be sure you’re building your dream home in a neighborhood with similar taste.
· “If your design is overpriced, for the neighborhood then you’re not getting your (construction) loan,”.
Do Take Utilities and Road Access Into Account
It’s easy to take for granted access to running water, electricity and sewers when you’re buying an existing house, but with vacant land these are not always a given.
Don’t Expect to Get a Loan
A land purchase can’t be leveraged with a bank the same way a home purchase can, so you’ll likely have to pay cash if there’s no structure on the property yet.
You'll have a much better chance of being approved for a construction loan on the structure you want to put on the land, since the house you'll build serves as collateral on the loan.
Don’t Skip the Due Diligence
Similar to a home inspection and background research on a house, a plot of land needs to be subjected to tests and checks to ensure you know what you’re buying and that you’ll be able to build on it.
Environmental tests check the soil for contamination from previous use. The site of a former gas station or auto body shop is more likely to have contaminated soil, for example, and residential homes can’t be built there. The land's potential for flooding or its poor soil conditions for building are also a concern.
Don't Forget the Survey Finding marker pins or having a land survey to identify the boundaries. Especially if the land is in a neighborhood and has been vacant for years, neighbors may have encroached beyond the property lines, intentionally or not.
Do or Don’t Talk to the Neighbors
While speaking to neighbors when you’re looking at a house may be a great idea to get a feel for the area, discussing your plans to build on a vacant lot can easily lead to opposition to your future dream home.
neighbors who are used to having raw land near their homes may get upset when the status quo is about change and seek to keep you from building.
Don’t Assume You Can Have Property Rezoned
zones, codes and ordinances that limit what can be built on any property or require certain steps to build a sound structure.
For example, there may be required setbacks from the edge of the property, mandates to set your building so far back from waterfront, or a percentage of the land may be restricted from development. Getting an exception to the rule isn’t easy, and there’s a good chance it will be denied.
Rather than trying to rezone property, it’s best to keep your vision within existing limits. Seek land that will allow you to build what you want, but know your plot’s restrictions before finalizing the plans.
Even if the zoning itself isn’t an issue, proper site plan approvals and permits take time.