My sister is currently in the process of looking for a new home. She is evaluating whether she wants to purchase land and build a house or purchase an existing house and remodel it to her taste. Growing up, our family moved three times and each time our parents purchased vacant land and built a new house. Purchasing vacant land is what she is familiar with; however, her boyfriend flips homes and does an amazing job remodeling them.
In assessing this decision, my sister has come to me with a number of questions regarding purchasing vacant land so I thought I would share some additional information with you in the event you may be facing a similar decision.
Although the purchase of vacant land is very similar to the process of purchasing land with an existing house, there are a number of unique factors you will need to evaluate. These factors will be affected by the state of the vacant land. If the land is unimproved, you will need to evaluate the availability of utility connections, access to public roads, potential subdivision restrictions and/or preservation agreements, subsoil conditions, and potential underground storage tanks and/or abandoned wells. For unimproved land, you may also need to remove trees, address surface-drainage problems, and construct a septic system. Each of these factors may significantly increase the cost of development. On the other hand, if the land is partially improved, a developer may already have taken care of these elements so all you have to do is build your house.
When you decide you would like to purchase vacant land, and have identified the land you would like to put an offer on, an attorney can help you draft an offer to purchase that would address the potential issues that may arise. An attorney can discuss with you the various alternatives and contingencies you may want to include in your offer such as contingencies related to financing, environmental assessments, and permitting. The options available for financing vacant land are different from those available for purchasing an existing home, however this topic is more complex than I would be able to convey in this post. If you would like more information I would be happy to discuss the pros and cons of the different financing options one-on-one.
This post is just an introduction to some of the factors that may affect the purchase of vacant land, it in no way addresses everything you will need to consider. If you would like to discuss things mentioned in this post in further detail, or have any other questions related to the purchase or sale of real estate, please contact me at firstname.lastname@example.org or 920-725-2601. I look forward to hearing from you.