By: Vicki Connell
So you've narrowed down your choices to the land you’d like to make an offer on. Pretty easy right, I mean it's just some dirt. Well, there may be more to it than that.
It is worth it to have a realtor in this process. Most of us enlist a realtor when we want to buy a house but it is also important to use a realtor for land purchase. Once you make an offer and begin escrow on a piece of property, you will have an inspection period. This is the time to turn over every rock. Your realtor can do some digging for you and find out if there have been any previous plans, civil engineering, soils studies or topography done on the lot. They can also get a copy of the CC&Rs, HOA building regulations, property tax information, liens etc. Make sure you know exactly what you are getting into. The property I purchased had an extra tax that was added due to infrastructure done in the community. It was spread out over a 7 year period and will then be paid off. My realtor brought this to my attention before we decided to purchase the land.
Read the contract! It can be daunting, especially if it is 567 pages long, but certain sections need to be read over. Put together a list of questions for your agent. Make sure all your questions are answered.
We’ve had clients come to our office with property that have had two sets of plans designed by two different owners, neither of which built on the lot. This could be a red flag. Why did 2 other individuals decide not to build? Make sure you know the history of the lot. Quite a bit of information can be discovered by going to the county assessor's website.
Pick a realtor experienced with negotiating. You want to acquire the property for fair market value. The cost of your lot along with the build cost of your home is used by the bank to determine your “Total Cost to Build’ which will play directly into the amount of cash needed to close on your construction loan. If you can pay cash for the lot, it can be used as equity toward your construction loan.
Remember, the seller's agent is paid to negotiate as well. They told me, “we have an investor interested in the property, bring me your highest and best” this can be a trap and it felt like it. Did the seller’s agent really have another investor? They may have, but I ended up offering about three thousand more than what I was going to offer because of that threat. So be aware of the many scare tactics and talk to your agent about calling their bluff.
During the inspection process, make sure to visit the lot a couple times. You want to inspect the property and ensure no one decided to dump dirt or debris right before you close, because then it's your problem to clean it up.
Once you close on the lot - it's time to choose an architect and get designing!
If you are looking for an amazing realtor in Arizona call Lena Fetters!
If you are considering building a custom home, give our office call
Castle Rock Homes (623) 935-5004
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