Five Tips for Buying Land
Land is recovering! Once the absolute dog of the real estate world, raw land sales are improving. Sellers are finally seeing appreciation and fewer days on market. Buyers are encountering higher asking prices, fewer options, and keen competition for the best parcels. As a land buyer, what should you keep in mind as you search? There are plenty, but here are my top five.
1. What is your intended purpose and use? (Or, if you are investing, what do you expect is your end buyer’s intended purpose and use?) If you want to build a house, evaluate the house’s footprint against setback requirements for lot lines, garages and outbuildings, well and septic, easements, and any water features. Will the house still fit on the lot? Does anything need to be moved?
2. What zoning and restrictions are on the land? Is construction limited to single family homes? Multi-family? Industrial or commercial? Has the land been declared conservancy and unbuildable due to a high water table or other problem? If you want to use land different than its zoning, be sure to talk with the local Councilman/Alderman and approach the Planning Department. It’s best to know if you want the impossible before making an offer and spending lots of money!
3. Is the land enrolled in any state or federal programs? Many landowners lower their property taxes through agricultural exemptions, Managed Forest programs, Conservation Reserve programs, etc. While this is helpful to the owner/seller, there is a financial penalty to be paid for removing land from these programs. Be sure to research any tax exemptions and penalties, and decide how these penalties are to be paid before making an offer.
4. Look into environmental concerns! Were any businesses previously on the property? Environmental protection laws were not as strict years ago and factories routinely dumped chemicals into the ground. Underground storage tanks, previously no cause for concern, are major issues today. Beware of land that was once used for manufacturing or that once housed a tannery, gas station, dry-cleaning business, military base, or dump. Be sure to look into the land surrounding the property too, as groundwater will spread contamination to adjoining parcels. Underground storage tanks can become a real nightmare, as landowners are always responsible for full removal of the tank and any contaminated ground.
5. It’s time to take lots of soil borings. Soil boring is when a Geotechnical Engineer drills holes into the land to determine if it can support a foundation and whether it can accept a conventional septic system. Good soil means conventional construction and an inexpensive, high-quality septic system. Bad soil can mean additional footings or piers, a holding tank, or even that the land is unbuildable. It pays to have a written report proving that the land is buildable and knowing that construction costs won’t get out of hand due to bad soil.
There are a lot more considerations, but these five will take you a long way. Do you have questions about buying or selling land? Send Mike an email at firstname.lastname@example.org or give him a call at (414) 207-2938. He’ll be happy to help!