Land Buying Hell ? Don’t get trapped – 7 things you need to check out!

by OtisBradley on April 25, 2014

Buying land is different than buying a home.  You might be thinking “Duhhh,” however you wouldn’t believe some of the situations I have seen,  particularly when the land is in an outlying area and not attached to town or city infrastructure.

Here’s one story I hear all the time.

“Well we were visiting from LA (or NYC or Chicago or any big city and going to the country) and found the most beautiful 40 acre piece of land on the top of the mountains looking out over the Pacific for only a million bucks !  (a lot in their city 10,000 square feet – costs $1m)

Flash forward 2 years

“It’s just ridiculous !  The road and the utilities just to get the house are $1m !  We spent $200,000 and countless hours designing our house now they tell us –  2 years to get the permit

We’re putting the property up for sale!”

For some reason people assume once you buy a piece of land – all you do is build.  But why would you know this stuff?  Lots of realtors don’t know the requirements to build on raw land.  Many spend 95% of their careers selling homes and very little land.

Rules continue to change.

It’s hard to keep up with the building and zoning codes as a professional.  Even the inspectors have a hard time and that’s all they do.

Different  areas of the country/world have very different ways to figure this stuff out

  • Mortgage States vs Title States
  • Restrictive permitting vs no permitting

South Carolina may have challenging restrictions due to Hurricanes while California has restrictions because of earthquakes and fires.

I have a Mexican/American friend who purchased an oceanfront home in Mexico – in an existing development with many others – only to have it taken away by State.

It’s not always simple.  You might think – I will just go into the Building Department and they will tell me.   Oftentimes – you may have to check out several different authorities.   who often don’t understand what the other does

  • Fire
  • Zoning
  • Tax
  • etc

Disclosure is a big deal when you sell your house these days.

When I first started in real estate, Caveat Emptor was the term – meaning buyer beware.  Buyers purchased properties and any problems belonged to them.  Nowadays, the seller has to disclose any defects and sign forms to that effect.

Here are 7 items you need to check.

1.  Survey

I am amazed how many people buy land without a survey.  When I was 12 years old, my parents along with some friends purchased an old farm in Vermont.  It was supposed to be 40 acres – turned out to be 18.  Nobody checked.  Its pretty hard to walk around a piece of land of size and have any idea how many acres.

An acre of land is 43,580 square feet- many urban lots are 5,000 or 10,000 square feet

Surveys can be done to many levels of detail however at the very least you should find out the property lines.  Additionally, you can have the survey mark the topographic information (elevation lines), easements, utilities and other information.

2.  Easements

Easements are rights that someone else may have to your land.  Many different types of easements exist with many different types of rights.  For instance, its common that power companies have easements for power lines.  There may or may not be visible poles and lines but it can make a difference in how you might design your plans.  In New York City, air rights (the ability to use the space above) are often separated from the real estate.

3.  Utilities

Electricity, water, sewer, phone, internet, gas, TV

That’s actually 7 things to add to the list

Usually its pretty easy to check but be warned – outlying areas can be very expensive to add services.  Even when phone lines exist – it doesn’t always mean you can get internet.  We often only have the choice of Satellite service for internet which is more expensive and not as good

4.  Soils

Geology is an interesting, complex study of the evolution of the earth’s crust.  Most of us don’t give it a second thought as we drive along next to a rock cliff or valley but geologists do.  Geologists talk in terms of millions of years – of volcanic upheavals

I recently met with a couple, interested in building a new home They purchased their property with two existing older homes and they wanted to tear one down and build a new home.  However, the area is in a state mapped “ancient landslide” area and new construction is either not allowed or prohibitively expensive.  A simple consultation before the purpose would have revealed this

Not only landslides, earthquakes but soil strength or bearing capacity is important.   Building on sand, rock, clay or wet areas all have different requirements.

At the least get a knowledgable builder or soils engineer to have a discussion with you.

5.  Zoning

Rules!  Many areas have zoning requirements (some don’t).   Typically they allow smaller lot sizes in urban areas and require larger lots in outlying areas.  Heights and sizes of buildings – set backs from the lot lines – requirements for parking are some of the typical rules you will find in Zoning Departments.  These rules vary drastically from location to location.

6.  Special Restrictions

New and special restrictions – sometimes outside of the public requirements – come up all the time.  Neighborhood architectural committees can be really challenging.  Often times these are small groups of inexperienced (building wise) people, working with poorly conceived neighborhood plans.  Scenic restrictions are another set of rules that are showing up in many areas.

7.  Fire Department

Fire Departments are becoming more restrictive all the time.  And, they often operate  autonomously and sometimes without regard to local building departments.

  • Sizes of access roads
  • Minimum radius curves
  • Turn arounds
  • Fire hydrants with with certified pressure

Well the Neighbors did it !

Don’t fall into this trap.  In many areas you will see homes that have been built which were built illegally, without permits, built before permits were required. Just because another house exists, don’t fall into the trap that your property good to go. Zoning, geology or current building codes my require something completely different.

Don’t become a horror story.  If you are buying land, do your homework.  Don’t get stuck down the road because you didn’t check out the local rules and restrictions.

Here is a list (always growing) of things you can look into:

  1. Access
  2. Air Rights
  3. Archaeologists
  4. Bridges
  5. CC&R’s (Private Restrictions)
  6. Cell Phone Access
  7. City Planning
  8. City Zoning
  9. Civil Engineers
  10. Coastal Commissions
  11. Drainage
  12. Easements – Utility or Private
  13. Earthquake Zones
  14. Electric
  15. Environmental Health Department
  16. Fire Department
  17. Flood Zones
  18. Flowers (Protected by State)
  19. Gas
  20. Geology and Soils
  21. Grading Department
  22. Historical Commissions
  23. Internet Access
  24. Landscape Architects
  25. Native American burial sites
  26. Neighborhood Architectural Committees
  27. New Regulations in the works!
  28. Neighbors
  29. NYMBYists
  30. Planning Department
  31. Public Hearings
  32. Public Works Dept.
  33. Scenic Corridors
  34. Sewer/Septic
  35. Storm water
  36. Surveys
  37. Tax Liens
  38. Telephone
  39. Tornado Areas
  40. Tree Protection
  41. View Corridors
  42. Water
  43. Water Perc (percolation) Tests
  44. Waterways
  45. Wells – quality, quantity
  46. Zoning Clearance

Other Items?

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