Selecting and purchasing land for your new home is the first step in building your Value Build home.
While the task may sound daunting, rest assured that we are with you every step of the way, so you know what to look for, what to watch out for, and how to make it your own. Save or print this handy guide to The Land Acquisition Process.
Some key items to watch out for include:
• Utility Connections—How easy is it to get utilities to the lot? Is there water, gas and electricity close by? If not, then the cost to get utilities to the lot will likely increase significantly.
• Clearing—Is the lot heavily treed? Then, that’s going to cost you. The more trees you have to cut down, the more expensive it tends to be.
• Topography—Is the land sloping? Is it rocky? Looking at the land, you will have to think about if it is easy to build on (level lot, not rocky, good soil quality), or not. The harder it is to build on, the more expensive your lot improvement costs will be.
• Standing Water—If you see standing water on your lot, it could be located in a flood plain or have poor drainage. Either way, standing water can pose serious problems when building. Seek the advice of a professional to determine what can be done.
• Survey—A survey is sometimes required, but it is always recommended when buying land. A survey provides peace of mind by showing the exact location of the house you are buying. It shows the exact dimensions of the property’s boundary lines and how much land is included within those lines.
• Easements—A property easement is a legal situation in which the title to a specific piece land remains with the landowner, but another person or organization is given the right to use that land for a distinct purpose. Examples of easements include the use of private roads and paths, or the use of a landowner’s property to lay railroad tracks or electrical wires. The good news is that these are not common, but something you should definitely be aware of.
• Zoning—Land use and zoning laws involve the regulation of the use and development of real estate, and it’s important to be sure the lot your are looking at is zoned for your desired use.
• Setbacks—Different counties have different rules for setbacks. A setback is the minimum distance which a building or other structure must be set back from a street or road, a river or other stream, a shore or flood plain, or any other place which is deemed to need protection. Knowing your setbacks will help determine the placement and size of your home.
• Lot Dimensions—Knowing the size of your lot will also help in determining the size and placement of your home.
• Deed Restrictions—A deed restriction is a limitation on how you can use your property. Deed restrictions can limit what you do on your property as well as what you can build on your land. They often involve a homeowners association.
• Homeowners Association—The primary purpose of a homeowners association is to manage a neighborhood’s common areas such as roads, parks and pools. Homeowners are obligated to pay dues, which can be anything from $100 to $10,000 a year, depending on the neighborhood and its amenities. If your lot lies within a neighborhood with an HOA, it’s best to find out what the dues are and what they cover before you purchase your land.
• Neighborhood Covenants—A “covenant” is rule that governs the use of real property, also referring to an agreement to abide by these rules. These can cover anything from the color of your home to the actual layout (two story vs. ranch-style, etc.).
• Outstanding Liens—In the most basic terms, a lien is a legal notice that’s attached to your property title because of an unpaid debt. It gives the unpaid party a legal claim to a portion of your property when it’s sold, and you typically can’t sell or refinance your property if the lien isn’t cleared. A lien attaching to a property such as a home, though, is a matter of public record and should be researched prior to purchase.
Now you know what to look out for, let’s get to the fun part: The Value Build Land Acquisition Process!
1) Construction Loan
We will connect you with a specialist that will get you set up with a construction loan to cover the cost of lot, home, and the lot improvement costs all in one loan. This establishes the top line of your budget. We will then connect you with a local Realtor in your market that will represent you as a buyer’s agent. The first thing the seller’s agent will ask for is the bank approval letter, which you will have ready to go. We will take these three key documents: the land contract, the lot improvement budget and purchase agreement for the home to give to the lender so there is one closing at the beginning of the build.
2) The Land Acquisition Manager
The Land Acquisition Manager will connect you with our Realtor Partners that will assist you with finding land. The Land Acquisition Manager will continually work with you through the process to make sure everything is running smoothly. Once you find a lot you are interested in, the Land Acquisition Manager will set up the Lot Evaluation so we can provide feedback on the lot, covering all of the key items listed above.
3) Lot Evaluation
We will walk the land with you to determine the detail of building on your lot: evaluating slopes, soil, location of driveway and home, and areas of concern, determining what a budget might look like to get started. You will have the lot improvement sheet in front of you to talk through in great detail what it’s going to cost to build on it.
There you have it—you are armed with the knowledge you need to make an informed decision on your land, and you have the peace of mind that comes when you work with the expert team at Value Build from start to finish.
If you have specific questions about the Land Acquisition Process, give us a call! We are ready and waiting to address your concerns, so you can get started on the path to your new home.