Vacant Lot Selection for New Construction Homes

Buying a vacant lot is an important and complex decision, just like any real estate purchase. For starters, there are plenty of reasons to buy a parcel of land. If you buy a house, it’s probably so you can live in it; but with land, you could choose to build your own house, use the property as a long-term investment or even to start up a business. Property also introduces a host of issues you don’t normally face when buying a resale home There are all sorts of restrictions that could apply to a vacant lot — you might not be able to build a house on it at all.

Know what you are getting into by hiring a licensed real estate professional to help you make the most educated decision.

For starters:

• Location: Location, location, location. The old real estate adage nails our first, most basic concern in land purchasing dead on. Think about it: No matter why you’re purchasing a piece of property, nothing is more important than location. If you’re making an investment, don’t buy land with no resale value. If you’re aiming on starting up a business, don’t buy land completely isolated from potential customers. And if you’re looking to build a house online resources to help you. For example, if you’re buying a few acres of land to build a house you’ll likely want to consider things like access to schools, your job, grocery shopping and restaurants. (Later we’ll delve into specific land concerns.)
• Cost: Real estate is an investment of time and money — and the more time you spend preparing, the more ready you’ll be to spend your money wisely. What kind of expenses can you expect to incur when buying a vacant lot? At some point during the purchasing process, you might want to consider title insurance. It “protects owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property” Consider it your shield against legal complications involving your property. While title insurance isn’t necessarily required during a property transaction, if you apply for a bank loan or a mortgage, the financial institution may recommend you purchase title insurance to protect their investment and your own.

Another cost to consider is a land survey. You may not need a survey done on land you’re interested in buying because the land could have been recently surveyed, and with minimal effort, you should be able to find out when a survey was last completed. Because surveys vary based on location and a host of other factors, it’s hard to give a general estimate of how much one will cost

Finally, remember that utilities and building costs will be expensive. In some cases, you may have to pay to have electricity and water run to your house before you even begin monthly service fees. On some land, you’ll have to drill a well or install a septic system alongside home construction. If you’re buying a piece of land as an investment, you’ll bypass quite a few of those headaches.

But no matter what kind of property you’ve got your eye on buying, you’ll want to know exactly what kind of government zoning restrictions are in place. We’ll discuss those next.

• Zoning: Zoning laws govern what can and can’t be done with land. Zoning is the division of land into subdivisions that will have varying restrictions of what can be built on each piece of property Make sure the lot you are considering can even be built on before making any future plans.
• Ordinances and Covenants: Land designed to be built on or sold, is typically divided up into smaller parcels that make up subdivisions unless it is a single lot site. If the vacant lot you’re eying is in the middle of an already developed community, the plans for a governing Home Owners Association are already in place to govern that area. HOA’s require membership fees and establish the rules for behavior and decorum in the area.

Restrictions may sound too stringent. They can be — but they can also protect you from having a run down or unsightly neighborhood.

• Utilities: Water and sewage can present more work. Vacant lots that aren’t in close enough proximity to water and sewage lines will require wells and septic systems to gain access to these two utilities. This can mean additional expenses and sometimes added hassle, as you’ll need permits for drilling a well and installing a septic system. Assuming you’re close enough to local resources to run in some or all of your utilities, the next issue to tackle is road access.
• Road Access: A public road obviously guarantees a route to a vacant lot at all times. But when private roads enter into the equation, things get complicated. If your property is landlocked, the typical solution is to make an arrangement with a neighbor for guaranteed access via a private road through their land, known as an easement.
• Easements: an easement according to Merriam-Webster is “an interest in land owned by another that entitles its holder to a specific limited use or enjoyment” After you have found that perfect piece of property for your dream house, you discover a problem: There’s no public road with direct access to the property, and the only way to access it is via a private road owned by your would-be neighbor. That’s where easements come in.
  The nature of your easement will vary by situation and can sometimes be resolved through a friendly conversation with your neighbor…but you may need to run a power line across a corner of a neighbor’s property, or perhaps you want to install a driveway running to their private road.
• Surveying: Even if a survey’s been done, it could be old and outdated. Getting a new survey will clearly define your property line — quite important when you delve into legal matters like easements.
• Flooding: So how can you know if a vacant lot falls within a floodplain? First, check the plats. Past research on the land may well have done your work for you already by mapping out the property’s elevation and determining potential flood areas. If you strike out, turn to a surveyor for help. Flood zones are clearly defined with letter designations. Zone A means a 1 percent chance of annual flooding — flood insurance is required for building here. Zones X or C are the ideal ratings — that means a less than .2 percent chance of annual flooding