Things you should know before buying vacant land to build a home, mobile home or other structure.
Buying bare land to build is a great way to get the dream home you’ve always wanted and increase the value along the way. But there are factors that can ruin your plans if they aren’t addressed early in the process. Below, we’ll go over some of the things that you should always make a part of your due diligence before buying a tract of vacant land.
- Zoning
Your first call or meeting should be with your local Building, Planning, Zoning, or Growth Management Department. Bring the parcel number and find out what the zoning is on the property. Make sure that you can legally get a building permit for the type of structure you wish to erect. Most people are surprised to find out some (even larger) tracts are un-buildable due to a variety of factors, (keep reading).
2. Flood Zones, Wetlands, Environmental Concerns
The old cliche about Florida being mostly swamp land isn’t true. However, most properties are within a short distance to flood zones or wetlands, and many tracts will have a bit of both on them. This doesn’t make most tracts un-buildable, but you may have to adjust the location of your new building to avoid wetlands setbacks and flood zones. A preliminary step is to pull a flood zone map from the local water management district to see what you are dealing with. Then there are environmental concerns such as endangered species, native plants and illegal dumping. Although these issues are rare, it warrants a call to the County environmental department to have them check things out.
3. Existing utilities
Water, Sewer, Electricity, these items are going to be necessary unless you plan to live off the grid. Even if you plan to install a well and septic, make sure power lines are nearby. Utilities charge big money to run new lines to a single residence.
4. Financing
Unless paying cash for land, your financing options are going to be quite different than an existing home loan. Some lenders won’t finance vacant land and almost all banks require at least 20% as a down payment and an interest rate that is a couple points higher. If you are going to be building soon you can do a land/home construction loan and roll it into one package. Then there is the Seller financed route, but this is becoming a rarer option.
5. Deed Restrictions
Is the land part of a subdivision with deed restrictions for size and type of structure to be built? Do they allow mobile homes? Is there an active homeowners association with fees? These are all questions to be asked early on in the process.
6. Road Frontage, Access, Easements
Does the property have road frontage with culvert and driveway in place? If not, check with the local public works to find out what the permitting, feasibility and costs will be. Will access be via an easement? If so, find out how wide and if it is a deeded easement or prescriptive. This will make a huge difference for resale or financing.
If you find a piece of land you love and want to move forward and get it under contract before you can check all these items, you have the option of negotiating a feasibility period into the contract (usually 30 to 45 days) to investigate these items without penalty.
Here comes the pitch:
Find a Realtor that specializes and is experienced in the unique steps involved in buying vacant land, and they will help you steer clear of the pitfalls and make your new homestead a pleasure from the start.
Sidney Stidham, Broker Realworks LLC email: floridaland1@live.com
