Tips to Pick the Perfect PlotPosted on: July 28, 2016
There’s something thrilling about the idea of buying your own piece of land-raw, untouched property on which you can build your dream home from the ground up. But picking the perfect parcel can prove a bit more complex than you’d expect. So know what’s involved before you dig in! We’re here to help you navigate this process.
1. Check zoning laws
If you think you’ve spied the site of your future dream home, before you start drawing up an offer, you’ll want to check local zoning laws. Because no matter how appealing a piece of land may appear on the surface, if it doesn’t meet the specifications for your intended use, you’ll find yourself with a costly but worthless hunk of earth.
While a plot may seem like an ideal home site, local zoning may forbid construction of a home there. The code might specify industrial use, or retail, or agricultural, or something other than what you need.
Zoning and other land regulations can be accessed through public records at your county office or city hall. Here are some other important things to check:
Unless you plan on parking your car on the side of the road and hoofing it to your home, your property must be accessible from a street or road.
Figure out how much it will really cost
There are substantial expenses for getting land and making it ready for construction. You will need a survey, permits from the local authorities, and health department approval. The site must be cleared, graded, and excavated. Departments of local, county, and governments (such as National Construction Authority) can be involved, all with associated fees, of course and this can take a while.
The process from identifying a parcel for purchase to complete construction can take a year or more.
3. Determine which utilities you want to install
Chances are quite good that you’d like your home to have water, electricity, and other modern-day conveniences. And these things don’t come cheap. One major installation where the condition of the land itself is critical is a septic system -a series of pipes that empty wastewater deep into the ground, where bacteria break it down. While most existing homes are connected to the mains sewer system, for a new home you can go either way. But not all land can sustain a septic system.
To determine this, you’ll need to perform a percolation test; this means that the ground must be able to absorb water at a specified minimum rate; otherwise the lot will not support a septic system.
4. Prepare for financing
Getting a “raw land loan” is different from getting a loan for a home. Since there’s no building on the property yet, it’s easier for a buyer to simply walk away, leaving the lender holding the bag. Due to this risk, some lenders may require a higher down payment on land; anywhere from 20% to 50%. The loan may also have more stringent credit score requirements and a higher interest rate.