If you have a vision of buying a parcel of land, designing and building your dream home, and moving into it with your family, this article is for you. The article was developed to help your vision become a reality; without falling into the many pitfalls we have seen others fall into.
Buying land can be the single most important decision that will affect the outcome of your vision. It can be more complicated than buying a new home. A parcel of land may look perfect, but it could come with many surprises such as bad soils, no water, severe encroachments, or proximity to suppliers to name a few. So how do you avoid the pitfalls?
Although your builder or Realtor should have an understanding of pitfalls mentioned in this article, it is recommended you speak to competent tax and legal counsel prior to purchasing a parcel of land.
1 . Understand Your Overall Investment (Budget) Your overall investment in the project will include the land, architecture & design, surveys & inspections, engineering, site work, utilities and construction. Prior to purchasing a home site, you should not only consult with your tax and legal professionals, but also with a reputable builder to help you gauge the overall cost of your vision.
2. Location Not location, location, location as we know it. The further your home site is "off the beaten path," the less expensive the land will tend to be. However, the further away the home site is from suppliers, the more expensive the construction cost and materials will tend to be. The more expensive construction costs and materials could eliminate any cost savings received by purchasing your lot "off the beaten path."
This could pose a problem when you try to resell your home. The further your home is "off the beaten path," the less likely you will receive premium pricing.
3. ZONING & MUNICPAL RECORDING It is important to understand the zoning and use of your property. Is it zoned agricultural, residential, residential multi-family, or for business purposes to name a few. Was the subdivision recorded properly with the governing municipal authority? Is the property in a flood zone? Are there environmental regulations?
Recently, many unqualified developers have subdivided larger parcels of land into smaller home sites. Many errors can be found in the municipal recordings, easements and actual zoning of these properties. Again, we recommend hiring tax and legal professionals.
3. SURVEYS & ENCROACHMENTS Have your Broker negotiate for a survey in purchase agreement. If the Seller refuses to pay for the survey, you should. There are several types of surveys, but get one that will include at least the following:
- Correct property description
- Site Topography (On larger parcels, survey the topography around the building envelope)
- Utility location including cable, telephone, electric, well & septic
- Property Corners
- Encroachments
- Easements
- Fencing
- Driveways
- Streets & Roads bordering the property
- Soil Test hole locations
- Proposed Building Envelope
The survey will answer many questions and might raise others. Most importantly, it will help determine if you are receiving what you expect to receive. Also, provide a copy of the survey to your legal counsel and reputable home builder for review.
4. UTILITIES Utilities are locations on the property that you will hook to for your electrical, telephone, cable, gas, water and sewer. Some home sites might require a well, septic and propane tank.
There are many parcels of land that might not offer the convenience of public water and sewer or might not have electrical or phone to the property. If you require a private well, understand your states regulations on drilling a well. In some areas, wells are not permitted and/or the property might not have access to water. The same goes with public sewer systems. If you do not have access to public sewage, you will need to hire a geotechnical engineer to determine if the soil quality will allow for a septic system.
There are several costs to factor into your budget regarding utilities. We recommend speaking with a reputable builder to help you gauge the availability of utilities and the overall cost associated with them.
5. SOILS Depending on where you're building, it is quite possible that you will require a soil test from a geotechnical engineer. A soil test will determine the type of foundation and sub-floor your new home will require. If the soils test comes back that a home will require caissons with a structural sub-floor, you might want to think twice about purchasing the lot. In many instances, soils can have a major impact on the overall cost of the home. Once you receive your soils analysis, we recommend speaking to a reputable builder to help gauge the impact your soils will have on the construction of your home.
6. TOPOGRAPHY Topography is the natural contours of the land. The topography of your home site will determine the height of the foundation walls. Slight variations in topography can impact the overall cost of your home and vision. In general, the steeper the topography, the more expensive construction will be. However, a flat lot might not allow for a walk-out basement that is part of your vision.
7. ACCESS
Once you receive the topography, make sure you have access to your property. If your home site does not have either an easement (shared driveway) for access to your property, a private road that grants access, or a public road, you might not have access to the property.
Also, if the access is not maintained by a public municipality, you might have shared costs for upkeep of the road. You will also want to check if access to your property has adequate drainage. If not, you might require a culvert or additional site work.
8. Water & Mineral Rights Water and Mineral rights are complicated and need to be analyzed by legal counsel. You should know that upwards of 70% of all mineral rights, at least in Colorado, are not transferred with the property. What does this mean? - In laymens terms, you will own all rights to the surface of your property, but not the minerals below it.
If you purchase a property that requires a well, you will want to have legal counsel or a water right professional analyze the rights you have to the water on the property including but not limited to surface water and aquifer water.
9. The Bottom Line There is much more to know and understand prior to purchasing a parcel of land then can be found in this article. These are a just a few of the surprises to look out for. Hire professionals, including, but not limited to a competent Real Estate Broker, a reputable Home Builder, Legal counsel and Tax counsel to help uncover any more surprises.
Saturday, May 3, 2008
Planning For Your Home
In a world of slap-dash home construction, having a custom or semi-custom home built just for you isn’t something most of the population has experience with. And while it’s an exhilarating adventure that will (hopefully) result in the home of your dreams, if it’s your first time, it can also be overwhelming. To make sure you get your dream home, there are some things you should consider before choosing your home design plan, so think about your wish list and try to determine the practicality of your desires. Once that’s taken care of, work with a designer to find or create the custom home plan that’s right for you. Some of the things you should consider – and work through with the other people who will be living in the home – include:
* Whether you want an open floor plan or a more traditional, divided plan
* How many children will – or potentially could – live in the home? Are in-laws quarters necessary? How many bedrooms and bathrooms do you want?
* How often do you entertain? What are the space requirements of the gatherings? In which rooms will the events usually be held?
* Number of stories and the ease with which you can travel the stairways and halls
* Exterior style – in general. Do you prefer modern or Cape Cod-style homes? Tudor or French Country?
* What construction materials do you prefer?
* Are there views you want to avoid or take advantage of?
* Will your landscape include a raised-bed garden? A swimming pool? Built-in barbecue grill?
* How important is the kitchen? Are you a gourmet who needs a large space for gadgets – or is your idea of cooking popping a frozen dinner into the microwave?
* Do your hobbies require special considerations?
* Do you need CAT 5 cable wiring to get the technology you crave? What about a central vacuum system?
As you go through the process, your custom home plan designer or consultant will ask you hundreds of questions (literally), so it’s a good idea to consider these basics before jumping in. They will quickly narrow your field of options and give you – and your designer – solid ground on which to start. Of course, if you don’t quite know where to start, it helps to study model homes. They will give you a feel for square footage, materials, amenities and ideas for the various ways you can lay out the space and the rooms, so you can at least start working with your designer on a home design plan armed with an inkling of what you want. In the end, practice patience. Deciding on a home – or working with a designer on a home plan – to suit your every need takes time. And patience, knowing what you like and the ability to compromise with your family and your budget are vital.
* Whether you want an open floor plan or a more traditional, divided plan
* How many children will – or potentially could – live in the home? Are in-laws quarters necessary? How many bedrooms and bathrooms do you want?
* How often do you entertain? What are the space requirements of the gatherings? In which rooms will the events usually be held?
* Number of stories and the ease with which you can travel the stairways and halls
* Exterior style – in general. Do you prefer modern or Cape Cod-style homes? Tudor or French Country?
* What construction materials do you prefer?
* Are there views you want to avoid or take advantage of?
* Will your landscape include a raised-bed garden? A swimming pool? Built-in barbecue grill?
* How important is the kitchen? Are you a gourmet who needs a large space for gadgets – or is your idea of cooking popping a frozen dinner into the microwave?
* Do your hobbies require special considerations?
* Do you need CAT 5 cable wiring to get the technology you crave? What about a central vacuum system?
As you go through the process, your custom home plan designer or consultant will ask you hundreds of questions (literally), so it’s a good idea to consider these basics before jumping in. They will quickly narrow your field of options and give you – and your designer – solid ground on which to start. Of course, if you don’t quite know where to start, it helps to study model homes. They will give you a feel for square footage, materials, amenities and ideas for the various ways you can lay out the space and the rooms, so you can at least start working with your designer on a home design plan armed with an inkling of what you want. In the end, practice patience. Deciding on a home – or working with a designer on a home plan – to suit your every need takes time. And patience, knowing what you like and the ability to compromise with your family and your budget are vital.
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