What do you need to do/know if buying raw land?

farmhousegirlMay 15, 2012

Sorry, this is probably a dumb question...

A lot just came on the market. The owner hasn't gotten any approvals, permits, etc. They are leaving all of this up to the buyer, albeit giving the buyer time to aquire everything before settlement, but we don't know what the process requires! The lot is a heavily wooded, six acre parcel. The agent was really wishy-washy about what is needed. We have no idea what we'd be getting into buying raw land that the process has not been done for us. Most lots around here already have everything in place, so we are not sure what needs to be done or the cost involved.

We do know we will need a septic permit. Are there surveys and other things necessary? Or just building permits when we have the house decided on?

Also, how expensive is it to take down a lot of trees? Gosh, this custom building stuff is a money pit.

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When we sold our piece of property I know if it was us on the other side buying - we would have had conversation with the sellers on a:
perc test, soil study, slope analysis (if house is on a slope).
That's about $5-10K worth of study that either you pay now or later in your build.
Not every1 is willing to cough that up & it comes to how serious you are in love with the property.

    Bookmark   May 15, 2012 at 5:33PM
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I put this list together in response to a similar question by somebody else back a year or so ago. I can't find that thread anymore but as I recall, other people made some great suggestions also. I hope they'll chime back in.

Some things to ask before buying raw land...

1) Is this a legal lot? If not, how do I make it legal?
2) Are there any existing liens against the property?
3) Does the Zoning on the property permit my project?
4) Are there any existing zoning violations on the lot?
5) Are there any cultural heritage sites on the property?
6) Does the deed also convey the mineral rights to me? (Don't be surprised if it doesn't b/c on almost all land, the mineral rights have been divided from the surface rights. But do find out what minerals are likely to be located in your area and who owns those rights. Consider the possibility that the owner of the mineral rights may decide to mine for them. Laws generally give mineral rights owners amazingly broad rights of access to the surface property as NEEDED in order for them to reach their underground minerals. You do NOT want someone deciding to drill an oil well or strip mine for copper in YOUR back yard. It might be worthwhile to find out who owns the mineral rights and whether they would be willing to sell those rights to you for a small fee.)

7) Is the site subject to flooding? (Get a FEMA flood plain map and do NOT plan to build inside of or very near a 100 year flood plain. Even better, don't build in a 500 year flood plain!)
8) Is the area subject to any other natural (or semi-natural) hazards? (landslides, forest fires, earthquakes, faults, subsidence, liquifaction, etc.

9) Does the lot have legal access to a public road? (For example, if the only access to the public road system is via a private road over a neighboring property, will the buyer of the lot acquire a legal right to drive over that private road?)
10) Does the existing access roadway meet the fire department access requirements? If not adequate, what will it cost to improve the road?

11) Is the lot served by a public sewer system? If so, what is the sewer connection fee and does the sewer district have the capacity to serve my lot?
12)If public sewer connection is not available, will I be able to install a septic system on the lot? If a perc test has already been done, what were the results? (IF NOT, AND YOUR ARE GOING TO NEED A SEPTIC SYSTEM, MAKE THE CONTRACT CONTINGENT ON PERC RESULTS THAT WILL ALLOW FOR AN ADEQUATELY SIZED SEPTIC SYSTEM!)

13) Is the lot served by a public water system? If so, does the water purveyor have enough capacity to serve the lot? Do water lines already run to the edge of my property and if not, how far away are they and how much will it cost to get them to my property? How much is the water connection fee? How long does it take to get a water hookup?
14) If the lot is not served by a public water system, is it possible to drill a water well on my property? How much is drilling a well likely to cost?
15) Does the local fire department have water pressure requirements that I must meet before I can build?

16) Does the lot already have access to electricity, gas, telephone, cable, trash pick-up services, etc. If not, what is it going to cost to get these services to the lot?

17) Does a Homeowners Association have jurisdiction
over the lot?
18) Are there any Homeowner Association or Covenants,
Conditions and Restrictions (CC&R's) related to the development or use of the lot?
19) What deed restrictions exist on the lot?

20) Has the lot been recently surveyed? (Get a copy of the survey but also have your own survey done BEFORE you buy... and either be on site when the survey is being done or have the survey company mark the boundaries with very clear markers that YOU can see. You don't want to purchase land, start building and then discover that the land you actually purchased is the next one over from the one that you thought you purchased and started building on!

21) What building permits are required to build on the property and what do those permits cost?
22) Are there any restrictions (city, county, HOA) on what you're allowed to build and, if so, are you comfortable that you can design a home you want within those restrictions? Eg., height restrictions? impervious ground cover restrictions? minimum/maximum square footage requirements.

23) What taxing entities will be taxing your property and at what rates?
24) Is there ANY proposed growth/development in the area that would make the property less valuable to you or to a future buyer if you should try to resell? (Possible examples: a new airport is going to be built a mile away so that planes will be flying over your property constantly; The 100 acre property right next door was just sold to a developer who plans to build high density housing units; county commissioners are seriously considering a proposal to install four playing fields - with floodlights on 150 ft tall poles to allow for nighttime games - in the county park that adjoins your property; a new tollroad is being built, and when finished, it will pass within 1/4 mile of your property.)

    Bookmark   May 15, 2012 at 6:50PM
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This is a really location specific question. Is there a city/municipality office you can ask this of? Or, your own real estate agent?

Fees can be really variable for subdivisions, etc. Are you thinking of subdividing this lot, or just keeping all 6 acres for yourself?

    Bookmark   May 15, 2012 at 6:52PM
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Thanks all! This is very helpful. The agent was very uphelpful and said we'd need to call the township. I know how the townships are around here...pulling teeth to get accurate info., etc. This could be biting off more than we are willing to chew. It sounds like it also could have a lot of hidden costs involved.

    Bookmark   May 15, 2012 at 8:50PM
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Farmhousegirl- yes all of what bevangel posted. It seems insurmountable but really isnt too bad. Alot of this depends on your timetable. The "process" takes a bit of time and depends on if you can do the legwork yourself.
We are doing just this on a piece of farmland we bought a few years ago and started the ball rolling on permitting Dec 2010.
We are in Northampton county PA. I put a couple pics on the May how's your build thread.
I tried to email you regarding the local ins and outs but cant seem to get my comp to cooperate tonite.
It is something totally do-able even in Pa although the only place for you to start is the local township office-
in Pa it begins and ends with them.

    Bookmark   May 15, 2012 at 11:10PM
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Posted by farmhousegirl on Tue, May 15, 12 at 20:50

...I know how the townships are around here...pulling teeth to get accurate info., etc. This could be biting off more than we are willing to chew. It sounds like it also could have a lot of hidden costs involved.

I would say it's hidden only if you go in without having done any preliminary home work.

Bevangel's list is a great checklist on what to ask & who is responsible.

Most of the time, the builder or general contractor will take care of most of it but if you are the GC, then it will fall on you to do that list on your own.

When we sold our property - we knew our county (state really) generally changes its code every 3 years. So we made no representation as to any new code or condition that the local county has put on it.

Therefore, some buyers were put off by potential unknown (to them) permitting & site prep expenses.
It was frustrating as a seller because we wanted to sell without hiccups but yet we wanted the buyers to be educated in making a big decision & be adult about things when it comes to their money.

I think the point I am trying to make is only you are responsible for your investment & you have to be serious about it. Else, you are just wasting yours & every1's time.

Good luck!

    Bookmark   May 16, 2012 at 9:50AM
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I found the original post that bevangel was talking about...

Here is a link that might be useful: First time build, where to start?

    Bookmark   May 16, 2012 at 10:45AM
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Find a local RE attorney.

Talk with them and LISTEN.

    Bookmark   May 16, 2012 at 2:23PM
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I think it could cost a lot more than you expect. Bevangel's list is very good...but the biggest concerns would be (IMHO) has it been surveyed and recorded? If not, you might have to pay thousands of dollars. Is there a well on the property...if town water is not available? That can cost thousands of dollars, too. What about a septic system? Again, thousands of dollars. Bringing power to the lot, phone, internet, etc. more money. And, is there a driveway to where you want to build? Tree removal is expensive...again, potentially thousands of dollars.

It's a much better idea to look for land that has already been surveyed, has well/septic, all the utilities are at the property line and you know what the taxes will be. Why spend all this money for a lot that isn't ready to build on?

Aren't there any other nice building lots, besides the one that has to have the builder construct your home? I'd keep looking...and find a new realtor!

Another thing people do in our area...find a lovely lot that has an older home or even a manufactured home...and build there. You should have all these problems already taken care of (but always check to make sure!) and removing a manufactured home is not difficult. You might even be able to sell it and have the buyer take it away :)

    Bookmark   May 16, 2012 at 2:33PM
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We bought 26 acres of raw, wooded land. The purchase was contingent on being able to get a perk test for the septic and get a well. Tricky part was financing, most banks wont do raw land deals. We used Farm Credit, they are great to work with.

Once its owned, taking down trees could be an issue. Where I am, in Maryland, removal of trees requires a grading permit and a storm water management plan. This is an expensive process and is designed to keep the chesapeake clean. Once that was in hand, it was costly to remove what trees we were allowed to remove. We were required to keep many of the trees only removing what as necessary. If we wanted to remove more it was a MUCH MUCH larger process that got state level environmental departments involved.

    Bookmark   May 16, 2012 at 2:45PM
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We bought 7 acres in western North Carolina. The offer was contingent on the county approving septic for the size house we're building.

After closing on the property, we found a builder and made the contract to build contingent on a well producing sufficient water.

What we did not count on was the difficulty of getting power to the property. Surrounded by houses with power- how hard can it be? We're on month 7 of the build and only today got the easements needed for the power company to connect us. It was something of a catch 22 because the power company wouldn't come and do their survey to commence service until a building permit was in place. Our GC has done almost all of the build on generator, which has come at a cost.

So...moral of the story is try to get as much in place as possible before closing, or at least know what you're getting into.

    Bookmark   May 16, 2012 at 4:53PM
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If the area has a GIS site, you can learn a lot from that. It will tell you what it is zoned as, topography, soil type, and allow you to see what the surrounding properties are. You want to be sure it's not adjacent to a future airport or septic treatment plant! Do a google search for GIS in your county.

As others have mentioned, you want land with enough flat(ish) land to build on, and not in a flood zone. Many lots we looked at were either too steep or in a flood zone.

Get a survey and septic permit at the time of purchase. Here in rural SC, those two items only came to about $500. Don't buy land without either of those two things!

Developing raw land can get expensive. A gravel driveway runs about $10/foot around here- pretty expensive if you need 1000 feet. Hooking up to available city water was $1800, plus the cost of piping it up to the home site, but a well could run many 1,000's of dollars, depending upon how deep they have to go. A local driller could make an educated guess, but it's still dicey in some places. Clearing land varies widely depending upon location. One snag we ran into a lot is that some areas have rules about minimum square footage for a house. One lot we looked at required 2700 sq ft- double what we planned to build.

Number one rule= DO NOT trust the realtor to give you accurate information! They want to sell you land, and may 'omit' certain information.

    Bookmark   May 16, 2012 at 5:20PM
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Just because there was a survey done, doesn't mean you won't want to do one again. And relying on the state/county GIS site can get you in trouble - our true property lines were 75 feet off from what the GIS site showed.

Even if there is a well, it might not be adequate for what you need. Same with an existing septic system. Where we build in central NC, they do not do perk tests. Instead, you bore into the soil and check the soil type.

Utilities already to the site is good, but you might still need to pay to bring them down to the house.

It might be more work for you, but it doesn't necessarily mean a higher price. If a seller has already done the work, it will be reflected in the price of the property.

    Bookmark   May 16, 2012 at 5:35PM
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bevangel has a great list there.

Here's what we learned the hard way.

We bought 5 acres from a local developer who had purchased 100 acres. We sold our 2000 sq ft house, put most of our stuff in storage and moved into a 900 sq ft rental. Since our 5 acres was in the middle of the 100 acres, there was no road, electric, or water. The road was supposed to be finished a few months from the date of our purchase, and we had talked to the electric company and water and were ready to get started the minute the road was done.

But it wasn't done. Why? Because the developer hadn't ever filed a plat for the property. We started going to county commissioner's meetings and found that the developer hadn't done anything he should have.

Long story short, we waited 2 years for developer to get the land platted, and then we built. Then found developer had lied about the flood plain to get the plat done.

Do you own research. Find out what it required by the county to get the plat and make sure it's been done. Check out the 100 year flood plain yourself. And all bevangel said too.

    Bookmark   May 17, 2012 at 2:48PM
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A friend of mine had an acre of flat land cleared of hardwood trees and stumps removed about 5 years ago in South Carolina near Charlotte. It was about $5,000. He was told that only an acre of timber was not enough for someone to come in and haul away, and pay him for the timber.

    Bookmark   May 18, 2012 at 6:20PM
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I think we all are scaring the op a bit.
Fact of the matter is that if you really love the land & your ideas, then the work you put into it will be worth it.

Heck you don't see Trump crying about his developments.
It's part of what you just have to do to fulfill your vision.

Be prepared going in & come out smelling like roses!

    Bookmark   May 18, 2012 at 8:05PM
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I agree it seems overwhelming; and if you rely on anyone else to do the info gathering you can get taken but really if I can do this (buy land and put a house on it without a developer or builder) ANYONE can.
That list that bevangel posted is extensive, most applied but really its not too bad. Most locals want to help people build ( increases the tax base) They make money from the fees... so will be helpful. At least thats my experience.

    Bookmark   May 18, 2012 at 11:07PM
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all good info. just one short thing to add.
even if property isn't in a flood zone,
take a look at it after a heavy rain.

best of luck in your adventures!

    Bookmark   January 20, 2014 at 7:06PM
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My 10 acres were within a very small subdivision. We found out about the lot, had it bought and closed on within a month. Paid $650 for the perc test which included his marking boundaries of the property, designing septic, soil analysis and slope information.
After reading this I'm glad we didn't know what we didn't know.
I am not sure we would have pressed forward without panic first if I read all that. It can be scary, there is so much involved, but if you love it, its all worth the research. This is going to be your home :)
Here's what we did...call a lawyer (no real estate agents involved, my dh found the lot on Craigslist~), another reason to talk to the lawyer (we have a creek on our property and had to talk to water conservation society as well - can't build within 50 feet on each side of it, blah blah blah) call a soil analyst (he knew about local well diggers/septic people and county requirements so he taught us as we went along), research HOA stuff (no horses - boo, but chickens for eggs ok, no white siding - boo, but plot, setbacks, building requirements all listed for us), and call your city/county permit office and see what the secretary knows about the development. We're in a little county but it might help you too. Our gal was SO helpful, even giving me the # of the best/but cheapest soil guy who turned out to be a gem.
Hope my little bit of experience helps encourage you - we knew nothing compared to all this and have a beautiful piece of property. Hope yours goes as well.

    Bookmark   January 21, 2014 at 7:33AM
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What you need to know is VERY area specific. I was the owner/builder of our home last year on 30 wooded acres with a live creek that we purchased....no studies, perc test or any other testing was done or needed (other than clear title work) on the property.
On the day we closed on the property I walked in to Planning and Zoning office and filled out an application (no fee), went 2 floors down and got my septic permit ($50.00 fee), and drove 2 blocks to my fire district and filled out another application/gave them 3 sets of prints, and paid a $2,000.00 road impact fee and the fire department said I was good to start with clearing of the land and the building permit will be issued shortly. The next day Planning and Zoning nailed the building permit to a tree and I was off and running.
One inspection before insulation in the home and one final inspection is all I had to deal with. Septic had to be installed by a certified installer but not inspected.
In my area if you are over 3 acres and not in the city limits it is very easy to get permits/approval,

    Bookmark   June 24, 2014 at 8:33AM
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We bought 7 acres of raw land with a very long driveway that needed to be put in. We haven't had any issues. We didn't buy the land first and then find the builder. We had a bunch of builders meet us out there and tell us what we needed and the costs, drew up the plans and contract to build and closed on the land and the construction loan all at once. Some builders made it seem like putting in the driveway would be a huge deal but the one we went with didn't even blink an eye at it. And I think it was b/c he was experienced enough and knew how to do it. (He brought in a lot of old used bricks and stuff from other jobs to make the base of it and that saved us money) This way there haven't been any surprise costs except our well. We went 2 or 3 thousand over on that b/c we had to drill deeper than they anticipated. There were other houses with wells on the road and the well company had drilled a lot of the other wells so they were guessing how deep we'd have to go but or course it was deeper. That was really the only thing we were a bit stressed over when dealing with raw land.....

    Bookmark   June 24, 2014 at 10:09AM
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We are looking to purchase raw land and need to get a perc test done before we purchase. They are requiring us to lay out a site plan for a home in which we have no idea what we want or how big. we are supposed to mark where the septic will go on this site plan, driveway, storage bldg etc and we are supposed to mark all site plan corners. how are we supposed to do this when we have just found land we like but are nowhere near the home bldg stage??

    Bookmark   August 28, 2014 at 9:00PM
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We had to mark the location of the house for our septic permit, but they weren't very fussy about the exact location. You need to ask them about it, though. If you change your mind about the size and location of the house, you'd probably have to have it tested again. We had ours tested for as much larger house to make sure that it wasn't 'borderline'. Bear in mind that a septic permit likely has a limited life-span, after which you would have to have it done again. Here in SC, ours was good for 5 years, and we just barely made it!

    Bookmark   August 29, 2014 at 6:21AM
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csharpe - That is very common. The house can't be too close to the septic system and they both can't be too close to the well - which is why everything needs to be drawn out when you have the perc test done. And, the land may perc in one area, but not in another area. Basically, you have to make an educated guess and understand they the test may have to be redone if you change the locations.

    Bookmark   August 29, 2014 at 7:43AM
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Hidden costs for us:
2500 neighborhood road maintenance fee PLUS
2500 refundable use fee for construction vehicles on roads as long as no damage done, and this is a small neighborhood with 12 houses!

Our excavating, surveying, septic, well, and such will be over $45,000. This is for a gradual sloping lot with about 3 acres cleared off of 10. It will come out of our funds for construction and we didn't have to pay upfront but it is alot! when you look at it this way.

Closing costs on the land were not too bad but on the construction loan were over $9,000. We still have a second closing.

We had to have a certain percentage down for the construction loan and had to give builder 10% down payment out of our own funds.

Not scaring you in anyway, we are thrilled with our decision to build. Just including some hidden fees you as a new land shopper may not be aware of, we weren't.
Hope this helps.

Also, clearing the land now means we have major landscaping to do, whereas if we bought a simple pasture type piece we would have "grass" or at least something besides brown dirt already. Again, our choice as we wanted the woodsy feel and my kitchen windows will greet me every morning with a view of our beautiful property and creek.

Oh right, said creek came with covenants through the local nature conservancy that meant we could only build on a certain piece of our acreage unless we wanted to build a bridge!!! (ummm, no.) Be aware of restrictions and take them SERIOUSLY.

    Bookmark   August 30, 2014 at 8:45AM
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Thought of one more thing: Beware the process takes a while. It took us 7 months of permitting, researching and home designing before we even broke ground. That so far was the worst experience, thinking we would be starting but realizing alot has! to happen first.

All good things and very important, but if you're thinking it's going to come together in a few months, I'd caution you to investigate all that is in this great thread.
Best wishes in the process.

    Bookmark   August 30, 2014 at 8:54AM
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