Finding the right piece of property for your dream home is a big decision. Of course, you want something that has aesthetic appeal and is in your preferred location. But beyond the trees and the view are several important factors that could impact the property’s buildability, livability, and marketability. Before you commit to buying a vacant tract, here are five factors to consider.
A seller’s disclosure should identify the utility companies servicing the lot, if any. If local companies or municipalities provide water, wastewater, and electricity, call them for details on where access is located on the lot. Get estimates for taps and service tie-ins fees, and ask for a history of rates.
The cost of getting electrical service on your lot can vary based on the distance from the nearest power pole to the house, how many new poles you may need, and whether or not a transformer is required, says Tim Turner with Turner & Sons Homes in Oklahoma. “When it’s all said and done, we’ve seen costs of the installation of new electric service cost anywhere from free, to a few hundred dollars, to several thousand dollars,” he says.
If you must drill a well or septic, talk with local contractors to get price estimates. A percolation test determines the water absorption rate of the soil, and thus the type, size, and cost of the septic system needed. In many areas, a perc test by a qualified contractor is required to get a septic permit. How accessible is groundwater, should you need a well?
Finally, if you’re set on natural gas appliances, make sure gas service is available to the lot or ask if you can bury a tank. Factor all the utility-related costs into the lot cost to get a more accurate estimate of the property’s true cost.
Your Water Rights
A riverside or lakefront lot can provide peaceful vistas and direct access to recreation. But before you take the plunge, research the water rights that come with your lot purchase. Does the property line extend to the riverbed, for example? That’s important if eventually you want to, say, add a dock or swim platform. Some waterfront properties include water easements that allow the property owner access, but limit what can be built within the easement. Can you pump from the river or lake for irrigation or drinking water? State and municipalities regulate water rights, so check with local offices to determine provisions on water access and usage before buying.
Equally important to know are the rights of the public to get onto your property. “Even if local property law says that private property extends to the middle of the river, or all the way across the river, federal law says that private ownership of the bed and banks of a navigable river is ‘a bare technical title’ that is always subject to public rights to use the river and its banks,” says the National Organization for Rivers.
Check for the presence of endangered species and for environmental contamination left behind by previous landowners, says Tim Knesek, senior vice president of Capital Farm Credit in La Grange, Texas. A property that is habitat to an endangered species will face scrutiny for any development activity, including clearing brush or constructing buildings. And environmental contamination – even if done before you purchase the lot – will be your responsibility to clean up, according to federal law. You can get some protection from that liability and costs by demonstrating due diligence before the purchase.
And don’t forget to research area flood zones. Buy property in an area prone to flooding, and you can expect to pay a premium for property insurance. FEMA offers a handy online tool to research flood maps by address.
These are just a few of many environmental factors to consider when purchasing a lot.
Sure, property restrictions can be an annoyance, like when you get that reminder that your lot is overdue for mowing. But they play a critical role in protecting your property value. Closely review deed restrictions on the property you are considering. If a homeowner’s association (HOA) governs the property, ask for a copy of neighborhood rules to be sure you can live with them. “Take the time to consider how the restrictions may affect you, and how they may be viewed by a potential buyer in the future,” says Knesek.
The last thing you want next to your new dream home is a loud nightclub or an unsightly car salvage yard. Contact your county zoning office to learn what is and is not allowed on your property, and the properties around you. Ask about future development and road construction plans that may affect your property in future years. Then, drive the area. What types of development are adjacent and nearby? Are there noisy, congested highway interchanges or commercial businesses next door?