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The decision to actually purchase real estate is just the first of many decisions to come. When buying a home you need to decide on the what, where, when and how. Decisions to make include finding the right neighborhood, the right house, the right loan, real estate agent and home inspector. The process of buying land demands answers to the same questions, plus a lot more.
Do you want raw land or vacant land, or do you even know the difference? Raw land, since it typically lacks services, such as water, power and sewer, is typically more expensive to build on. Vacant land or vacant lots, however, still require that you perform plenty of due diligence: easements, zoning, land-use restrictions and utilities, to name a few. All that "stuff" that the developer did prior to building the homes you'll find in a subdivision, is now up to you.
Then there is the cost to build a home, if that is your plan. The cost to build will vary, according to several factors, with the following three at the top of the list:
- House design
- Quality
- Price of materials
According to C.J. Hughes, of This Old House magazine, the cost of the land and the cost to prepare it for construction shouldn't make up more than one-fourth the total cost of the construction budget. Just how will you determine that budget? Use anonline calculator to get a rough estimate of construction costs in your area.
Like most real estate transactions, if you're a property virgin, the entire process may seem like information overload. Let's break it down into bite-sized chunks.
Visit Appropriate City and County Offices
Government agencies offer a wealth of information that will speed you on your way in your due diligence. Here are a few places to start:
Planning Department
Look at the long-range land use plan to determine if anything unpleasant is in the works, such as a landfill, prison, electrical substation or a poultry or pig farm if odors bother you. Check traffic counts and ask about any upcoming road improvements. Your country property may be slated as highway-front property, so don't skip this step.
One of the most critical pieces of information will be the zoning. This will, among other things, let you know if you can even build on the land. Also, ask if the land is in a recorded subdivision as this will bear on how you can use your land.
Does the parcel have municipal water and sewage? If not, you'll need to factor in the cost of installing these items when determining the total cost of construction. Check with the health department about local sewer and water codes.
Access to the parcel is crucial. Don't assume any road is public – ask.
Assessor's Office
Here is where you'll find tax records, flood-zone boundaries and the proximity of any wetlands or other restricted use areas. You may find more information about easements and whether or not you'll require one to gain access to the property and whether someone else holds one over the property.
Financing Land
The most unpopular part of any real estate transaction has to be obtaining financing. Fortunately, you'll find a lot more owner-financing deals in the land arena than that of the single-family residence.
Other ways to finance the land purchase include obtaining a home equity loan on your current house, community banks and the government. The U.S. Department of Agriculture (USDA) offers loans for vacant land, provided you are building a single-family residence on the land right away, according to Elias Askins with the USDA Rural Development office in Clark County, Nev.
If you're stumped about where to go for financing, ask your real estate agent or the title insurance reps in your area.
Choose a Qualified Real Estate Agent
When it comes to choosing a real estate agent, interviewing several is critical when you want to purchase land. The process is entirely different than buying a single-family home and requires a different set of real estate skills and knowledge.
Look for an agent who specializes in and has lots of experience with selling land. A bonus is finding an agent with construction credentials; he or she will be better able to counsel you about the building aspect of the land purchase.
The most important thing to remember during the purchase process is to not fall in love at first site with any parcel. You never know what lurks behind the public records until you peruse them, so, no matter how ideal a property seems, try to remain emotionally detached while lot shopping.
The Wheaton and Glen Ellyn area currently have 76 pieces of land for sale. To view land for sale in these and other areas, click on the image below or head to WheatonHomes4Sale.com.
