The following information is designed to help Associates with clients who are purchasing a lot or lots for the purpose of building a single family residence. NOTE: This was written with my local area in mind....
Q. What are the differences between a developed lot, and an undeveloped lot? A. A developed lot will most likely be in an established neighborhood with streets, water, sewer, and other utilities already in place. Usually there will also be restrictive covenants in place that may limit what a buyer can build on the lot. Purchasing a developed lot: Q. What are some things to look for when showing a developed lot to a client? A. There are many issues which need to be addressed but many of them will pertain to the type of construction planned. 1) You will need to know if there are restrictive covenants and if so, will they allow the type/style of home your client wants to build. 2) You will need to know if the lot has public water and sewer connections, or will a Private well and septic be needed. When a well and septic system are required it will limit where the home can be built. If on a private septic system you will need to determine how many bedrooms the County has determined the lot will “perk” for. 3) The building envelope must be determined to verify the size of home the client wants will fit with-in it. 4) Will there be Homeowners Association dues and what will they cover. 5) Will there be assessments due to City/County for utilities, sidewalks, etc., or are there any pending assessments. 6) Is the lot restricted to a select builder(s). 7) Check survey for underground tanks, grave sites, abandoned wells, or utility/ access easements. 8) Does the topography of the land allow for the type of home desired or is it located with-in a flood plain. Also remember: a lot which requires a well and septic may/will add more to the construction cost determined by the depth of the well and the type of septic system required. Purchasing an undeveloped lot: Q: What are the things you must look for when helping a client who wants to purchase a lot outside of an established neighborhood? A: You will need to look at 1-8 above plus: 1) Does the Seller have current survey and soils test? 2) Can the tract of land in question be subdivided? 3) Has there ever in the past been a septic field on the property? 4) Check for dump sites, if any are found, check for hazardous waste. 5) Look for rock outcroppings…this could effect the cost of the foundation and the drilling of the well….plus this is a red flag for RADON. 6) Usually undeveloped lots will not have restrictive covenants so check to see who owns all adjacent tracts….if an adjacent owner is “Hog Farms R Us” there may be a problem. Also make the client aware a home built in an established neighborhood usually, but not always, appreciates faster than a comparable home on a stand alone lot. The biggest issues are usually well and septic on undeveloped lots….and the subsequent placement of the home on the open space remaining. Usually the larger the lot, this becomes less of an issue. A well informed client will make better buying decisions, in return making you look more professional and more “referable” Listing Lots and Land When Listing a tract of land or a developed lot in a subdivision care must be taken to assure yourself the listing is “saleable” What is the definition of “Saleable”? sal·a·ble also sale·a·ble (sā'lə-bəl) As a listing agent of land and/or lots you must meticulously research the property for flaws that may make it un-saleable. The first and foremost is to get a copy of the survey and deed. AND most importantly walk the property…..every inch of it…. Deed Issues: If the deed has not been transferred in many years you may want to get the seller to pay an attorney to do a title search on the property to assure a clean title. You may run into issues when you have multiple family owners or heirs. Survey Issues: If the survey is not a current survey, the seller may want to pay to have one done…especially if you suspect problems with encroachments or easements. Look carefully for underground tanks, fence/driveway encroachments, abandoned wells/septic fields, grave sites, dump sites, and wetlands/flood plains. Check for restrictive covenants and zoning issues.
adj. - Suitable for sale; marketable.
Eddie Brown ©2010
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