Dream of buying land & building?
Great question! I get this question often and thought putting a blog post together would be helpful.
Evaluating and buying land remains a process. Where to start (sort of like which came first the chicken or the egg!)? Do you have a builder? If not, now is a good time to discuss builders and options. Is a public or private sewer system or septic system in place? If not, then we need to get a soil scientist out to evaluate the septic potential and a report for the health department. Is there water available (public or private or well)? If no water is available, perhaps we need to drill a well, make the offer subject to drilling a well and getting x gallons of water a minute or have a geologist/hydrologist study the land. Are the boundaries clearly market or do we need a new survey? How about clear title to the property? Have the timber or mineral rights been sold? Does it matter? Are you going to pay cash, finance with the seller, or secure third party financing? The questions go on and on depending on your needs and the land charecteristics. With a background in Forestry and Wildlife Management, I really enjoy getting outside and walking land with clients before, during and after the purchase process.
I like my clients to make informed decisions when buying land. We start with an initial meeting to discuss the process and review the options. Then we develop a plan and timeline to meet the buyers individual needs and the characteristics of the specific parcel of land and transaction. Fortunately, the Virginia Association of REALTORS has developed a standard contract (meeting the needs of lenders, attorneys, buyers and sellers) to use on purchases of unimproved property that builds in study periods for many of the options and has standard language to cover others. Before making an offer we need to cover financing options. I like Farm Credit or cash for land purchasers (there are other options if you are looking to build soon that allow you to purchase the land, finance construction and move into permanent financing with a 30 year fixed rate loan). We also make the transaction contingent upon appraisals, financing and other items specific to the property. The offer to purchase includes many items protecting the buyer should we find challenges during the study periods (I usually build in two study periods: one for the builder to evaluate the site and one for the soil scientist to evaluate the septic potential of the lot. When needed other study periods can be added). The study periods usually last 30 to 60 days. Based on the information, we make informed decisions.
Over the last 20 years helping buyers and sellers of land, I’ve developed contacts with surveyors, attorneys, soil scientists, builders etc. Hopefully, this answers some of your questions about buying land. If not, please ask! The only bad question remains the one you do not ask. So, if you’re interested in buying a 1/3 acre lot in a subdivision or 1,000+ acres in the country or something in between, let’s talk, start the process, and develop a plan to meet your needs!