Buying any type of real estate is a big decision. Often times, when you purchase a vacant lot you may have it for several years, so you want to make sure that you’re choosing the very best property for your intended purpose. Not every vacant lot can be used for anything because of zoning purposes. If you’re considering purchasing a vacant lot, here are a few do’s and don’ts to consider before you make your purchase.
Do’s
Do Use A Realtor
Using a realtor that is knowledgeable in land purchases is an absolute must so that you don’t fall into a bad deal. One of the biggest mistakes made in purchasing vacant lots is purchasing lots that have been advertised as having the possibility of being divided. This is often false advertising and yields less profit for the purchaser in the end.
Do Consider Neighboring Property Values
Look into the property values of neighboring properties. If you have any hope of getting a construction loan, drawing up plans for your dream home should be within the price range of neighboring homes or buildings. This number has to include the price of the land as well.
Do Take Utilities Into Account
Most people forget to take into account all the amenities they enjoy like water and electricity. Having access to the road so that sewer lines and power lines can be fitted to your home is very important. Knowing whether you will need to run infrastructure to your lot first is very important because the cost can be huge.
Don’ts
Don’t Expect a Loan
It is unlikely that a bank will give you a loan on a vacant lot because there is no collateral to offer, should you default on a loan. The bank is much more likely to give you a construction loan because the money you borrow to build your dream home will then turn into your collateral.
Don’t Talk to the Neighbors
Yes, it’s great to talk to people that live in the area to get a feel for schools, crime, and every other thing that is important to you, but if you start going around the neighborhood telling people you’ll be building right down the block, the wagons will circle and a petition to stop you in your tracks could surface quickly. Nobody likes to listen to construction all day at home.
Don’t Skip Testing and Surveying
Before you purchase a vacant lot, have environmental testing and surveying completed before you buy. This will ensure that your entire lot is usable for your intended purpose, that there isn’t any protected species of any plant or animal living on the property, and where the property lines are. If the vacant lot was ever used as a gas station or auto repair shop, it’s likely that the soil is contaminated and homes can’t be built on it. Therefore, it’s important to complete testing in advance so you don’t end up with property that you can’t do anything with.
Overall, the best thing to do, that will save you a lot of grief and trouble later on, is to have a realtor by your side that knows property laws. This will ensure that your vacant lot really will become your dream come true.
