For You, From Ed
Buying Land for Your Custom-built Home? A Few Thoughts...
It’s not for everyone, but if you love a project and the thrill of a build, there’s nothing quite like it! Several clients have recently asked me for a primer on the process- here are a few thoughts:
• Approved financing or cash needs to be in place from the start if you’re seriously considering buying land and building. Otherwise, you’re just thinking about it. What’s a realistic budget for land and for your build? Seek referrals to lenders that offer construction loans.
• Realtors are licensed real estate professionals delivering value as they help you navigate the land-buying process. They are a resource who can direct you to the source.
• MLS-listed properties likely provide to you or to your realtor more detail about the land offering than those being directly sold by a landowner.
• Shovel-ready, ready-to-build, or fully-engineered properties should have all municipal approvals in place, so all you need to do is get your building permit. Verify with the local building department that the property is fully-engineered and have them verify what’s needed for you to proceed with your build.
• Raw land generally refers to property lacking municipal approval as a building lot. (Just to confuse things, a fully-engineered property is at times also referred to as raw land when there are no improvements to the property.) A first step might be to learn from the local building department what would be required to secure building approval. Alternately you can reach out to a local professional engineer for guidance on the property, or pursue both inquiries concurrently.
• Improvements (or an improved property) deliver added value. Is there a new and municipally-approved septic system on the property? Is there a drilled well with casing in place? Are well logs available from the well-driller or local municipality? Are utility poles in place? Have utilities (water, sewer, electric, etc.) been brought to the property? Is there a municipally-permitted driveway culvert in place? Improvements save buyers money and time.
• Engineering raw land and issuance of a building permit in some instances are fairly straightforward. Often this is handled by the building department/building inspector without planning board involvement. Your professional engineer will advise.
• Public roads are typically maintained by village, town, county, or state.
• Private roads are typically not maintained by any municipality. Is there a deeded road maintenance agreement and is it satisfactory? Your attorney can counsel.
• Site Plans should be available for a fully-engineered property. If it’s raw land, you’ll collaborate with your professional engineer to design a site plan (showing location of house, driveway, utilities, etc.) meeting all municipal and regulatory requirements, including approval for a driveway entrance from the public road. Engineers and surveyors who’ve previously worked with a property have already done much of their homework and can offer good time and money value. Consider views you’re trying to capture from the homesite, or views you’re trying to minimize.
• Site work expense varies from site to site. How long will the driveway be? How will it be paved? How will you bring utilities to the house, above or below-ground, and at what cost? What’s the cost for water and sewer connection or a well and septic system?
• Wet or dry? Have your professional engineer verify whether the property floods, is in part or whole within a designated flood zone, includes wetlands, or if there’s designated protected wetland.
• Covenants, conditions, restrictions, easements, rights-of-way, subdivision regulations, HOA rules, and such might appear in the MLS listing. They impact how you may use the land and here your attorney can offer counsel.
• Environmental considerations include, but are not limited to, (fuel) storage tanks, air quality, traffic sounds, previous use of the property, etc.
• A contract establishes your relationship with a property and can include contingencies allowing time for due diligence and to find answers to your questions. Your attorney can offer counsel.
• Picturing the homesite as you stand on an unimproved lot, sometimes tree-covered, can be challenging. I’ve heard experienced builders explain on-site to their clients just what a property could be, letting them better envision their dreams. Priceless!
Once you’re ready to begin your land search, compile (and then revise!) a checklist of what’s important to you in a property and what questions you’ll have. And don’t forget to seek professional support and guidance and communicate directly with the local municipality to verify...verify...verify. Enjoy the journey!
By Edward Sattler, NYS Licensed Real Estate Salesperson
- Giulia Preziuso
- Monica Marschall
- Corinne – Queens, NY -- Dec 2018