LAND PURCHASE CHECK LIST

1. ACCESS

Do you have a deeded right-of-way? Lenders require recorded access. Who maintains the access roads to the property? If not the State, then who is responsible for maintenance? If you are accountable, then do you have sufficient rights-of-way to service them properly. A 20 ft. minimum width is usually adequate for maintenance of limited-use private access rights-of-way. 40-60 ft. widths are generally acceptable for small to large subdivisions.

2. SEWAGE DISPOSAL

Are you sure about the "perk"? Standard in-ground home sewage disposal systems are generally less costly and troublesome than systems such as "sand filters", "aerobic", or other disposal alternatives. Buy land subject to your approval of the current health permit, or pending your satisfaction with the results of a "perk" test and who pays for it. For limited use, will your local health authority approve low-cost composting (waterless) toilet systems?

3. EASEMENTS

Are there any objectionable easements or encroachments on the land? Are they serious enough to cause you to reject the purchase of the property?

4. FLOODS

Is your building site exposed to potential flooding, earthquakes, sinkholes, underground caves, caverns, or mining shafts, and can the site be made relatively safe from undue exposure to other surface natural disasters such as landslides, hurricanes and tornadoes.

5. WELLS

What are the depths of existing wells in the area? Without a municipal water source of supply, you need be concerned about well drilling costs and the availability and potential volume of underground water to supply your needs. Will you be satisfied with a cistern?

6. MINERAL RIGHTS

Who controls the mineral rights? Water rights? Is this information spelled out in the contract and deed? Many early reservations of mineral rights in the chain of title turn out to be of little or no consequence in a fast-moving society. Consult with your attorney.

7. UTILITIES

Are electric and phone lines available? If not, how much will it cost to bring in service? Can the required easements be obtained to run in these lines? What will be their user costs? Can you be content with using a generator and cell phone?

8. SURVEY

Is there a recent survey? If not, will the seller guarantee the acreage within, say, 5-10% if you commission a survey? Will there be a price adjustment if the acreage called for in the deed is deficient? If possible, and particularly if you pay for the survey, you will normally not want to pay more if you get more. If the survey costs are split. or if the seller pays, there will likely be a price adjustment up or down if the surveyed acreage differs from the deed description. A recent survey is advised so you're satisfied with acreage and property lines.

9. ADVERSE POSSESSION

Can you foresee any claims of adverse possession? Land ownership can be claimed against the real owner (you) through a claimant's reliance on the law of adverse possession, wherein, under color of title, he claims he has established actual, open, notorious, exclusive, and continuous possession for a statutory period. This situation can occur on remote or abandoned land where absentee owners fail to correct unwarranted changes in boundary lines or to assert their right of ownership. Do the surrounding owners agree with your survey? Have there been any disagreements over existing boundaries of fence lines?

10. RIPARIAN RIGHTS

Will you receive full riparian rights? Generally, this question asks, will you -- as the owner of property adjoining a watercourse such as a lake, stream or river -- enjoy unobstructed use of these waters. Consult with your attorney.

11. DETRACTIONS

Are there any adverse influences present in (or planned for) the area of your purchase which could affect your enjoyment of the land, or which may have a negative impact on land values? Examples of this type of detraction are nearby high-volume land fills, large-scale hog and poultry operations, timber clear-cutting on a reckless scale, municipal sewage treatment plants, junk yards, industrial pollution, shooting ranges, rock quarries, etc.

12. ZONING

Is the land properly zoned for the use(s) you have in mind? Check the latest local zoning ordinance and confirm your findings with the zoning administrator and your attorney.

13. SUBDIVISION

Will you be able to subdivide the land according to your needs and expectations? Check the latest local governmental subdivision ordinance and confirm your findings with the CountyAdministrator or Planning Director, and consult with your attorney.

14. RESTRICTIONS

Are there any restrictions on the land? If you are buying land in a subdivision, you will generally be confronted with a set of "protective covenants" which spell out what you can, and cannot do, with the land, and what guidelines are set down for building construction.If you are buying land that is not subject to a list of restrictions, check to see if any limitations are incorporated in the deed which will restrict your use of the land. For example, some sellers convey their land with a prohibition against using the property to store junk cars; or the deed may forbid timber harvesting; other sellers have imbedded "scenic easements" in their deeds, restricting construction and further development.

15. ASSESSMENTS

Will you be confronted with any assessments, such as road maintenance fees? When buying in a subdivision, periodic assessments, or the legal mechanism for imposing same, are generally spelled out in the protective covenants and deed restrictions. Sometimes the adoption of measures for fee assessments on land owners is voted upon in regular meetings of property owner's associations. Local quasi-governmental jurisdictions, such as Sanitary Districts, can also impose assessments on land owners who use private road systems.

16. LOCATION

How important is it for you to be close to a town or city? Shopping? Doctors? Schools? Police? Fire protection? Lack of proximity to these basic municipal services generally causes discomfort for many land buyers and can depress land values in some rural areas.

17. SPECIFIC PERFORMANCE

Is there a provision in the contract preventing the seller from reneging? Do you have a loophole or two built into the contract so you can get out of it if you want to? Consult with your attorney about your concerns so appropriate language can be drafted for the contract.

18. TAXES

Will real estate taxes be prorated at closing? Generally, this is the rule.

19. TITLE

Are there defects on the title? If so, can they be cleared up before closing? Can you obtain title insurance? If closing is extended, what effect will this have on your plans?

20. FINANCING

Is your financing lined up? Are the loan terms and conditions clearly spelled out, and are these provisions comfortable for you? If the owner is financing the sale, will you get an immediate deed? If you're buying on a land sales contract, or contract for deed, you will want the contract recorded in the local courthouse to prevent the seller, his heirs or assigns from (1) imposing further encumbrances on the land, and/or (2) selling the land to other buyers, whether by intention, or inadvertently. Plus, you'll need to be kept up-to-date on your real estate taxes. Without a courthouse record of ownership, you may not receive your tax bills, and your land could be sold, without your knowledge, for back taxes.

21. CLOSING COSTS

Are closing costs apportioned in accordance with legal standards?

22. PREPAYMENT

Have you protected yourself against prepayment penalties?

ADDITIONAL CONCERNS FOR DEVELOPERS

23. TOPO MAPS

Have you designed your lots around the terrain with the aid of a topographical map(s)?

24. APPROVALS

Is your purchase contract subject to obtaining approvals from local governing bodies? If so, have you allowed yourself enough time to get through the red tape?

25. COST OF MONEY

What will be your cost of money? Have you tried for an interest-only period at the beginning of your mortgage loan? If you're using other people's money to get into the project, have you allowed yourself enough time to pay them back? What will it cost you?

26. RELEASES

Are release provisions built into the contract so you can release subdivided parcels from the blanket mortgage through curtailment payments? Is a portion of the land released through the down payment? Have you requested that all principal payments be applied as credit against releases, thereby freeing up more land without the added burden to your cash flow of release expenses? Will the seller release land in return for developed lots?

27. SUBORDINATION

Will the seller subordinate his first position (take a 2nd) to a new development loan?

28. LIABILITY

Were you able to build an exculpatory clause into the contract to avoid personal liability? (In the event of default, the lien holder looks only to your corporation, and/or the land with any improvements, as security on the debt.)

29. ADJUSTMENTS

When purchasing land by the acre, have you deducted from the total acreage any land tied up in easements and encroachments, and requested an adjustment in the selling price?

30. SUSPENSION

Will the seller agree to suspend principal payments during any unforeseen delay in the development process caused by governmental authorities?

31. TRUSTEES

Will the seller allow you to name the trustee on the mortgage/deed of trust? A friendly trustee can offer quick delivery on y our deeds of partial release (when you sell off lots) and give cooperative approval of your required deed restrictions, easements, and rights-of-way.

10 DEADLY MISTAKES WHEN BUYING VACANT LAND

  1. Land is incorrectly zoned: You may not be able to build what you want on a particular piece of property. For instance, zoning may require minimum square footage, setback requirements, or minimum road frontage.
  2. Land is not suitable for well and septic. A percolation test should always be done prior to purchase (if public sewer and water is not available.)
  3. Land is located in a flood plain. The area may be too low on which to build. Sometimes the property may be part of a government issued flood plain and may require flood insurance on the dwelling.
  4. Deed restrictions may prohibit your intended use. If the property is part of a subdivision or platted land, there may be additional building requirements besides local government ordinances.
  5. Land may be improperly split from a parent parcel. New state legislation now requires Township approval when a parcel is split. It is recommended that you obtain Township approval for splits before purchasing.
  6. Land is subject to state regulated wetlands legislation. the state laws regarding regulated wetlands are extremely strict. If there is a question regarding whether a piece of property contains wetlands, this should be addressed prior to purchase.
  7. Failure to receive a vacant land disclosure from previous owner. The owner may be aware of potential problems with the property and is required by law to disclose this information.
  8. Undisclosed environmental hazards. Receiving a copy of the previous owner’s disclosure may help to uncover potential hazards. in some cases it may be beneficial to have the soil professionally tested to determine if there is a problem.
  9. Land size and topography is not suitable for your home plans/blueprints. The layout of the land must be suitable for the type of home you want to build. For instance, if a walkout basement is desired, the land cannot be flat.
  10. Purchaser was uninformed of current market conditions and/or values. A real estate professional can provide you with a comparative summary of what is currently available and what has recently sold, and at what price.

The New Home/Land Department at O’Brien Realtor has current, up-to-date information regarding vacant land within the area. Contact us, and we can tell you what is available in sub-divisions, large parcels, and building lots, and can assist you in finding and negotiating the purchase of the right piece of property for you.

Land Buying Checklist

When choosing a site for your new home, there are many things to consider. This checklist will help you be prepared and understand what to look for in your careful consideration of property. Remember there are no perfect building sites, most will require some type of improvements. The goal is to minimize the additional cost.

  • What size is the lot? Will the house style selected fit on the property? (check deed restrictions)
  • Property should be surveyed by property seller (all 4 property pins in and visible)
  • Has property been approved for septic or is city sewer available?
  • Is there city water available or is a well necessary? (if well, check with neighbors for depth of their well)
  • Will your electric service be overhead or underground? Is it necessary for the electric company to set additional poles or a transformer? (contact power company)
  • Is natural gas available or will you use LP?
  • Research deed restrictions. Some requirements may add additional expenses such as roof pitches, square footage minimums, sidewalks, paved driveway, brick, etc. (not getting this information could slow down the process)
  • Research zoning requirements to include set backs and side yard requirements
  • Are there any easements or right-of-ways granted? (this could include underground gas or electric extensions)
  • Is a culvert needed? If so, what size?
  • Are there any items that will need cleared or removed from the property? (trees, structures, etc.)
  • Has the property been mined or stripped? Engineering may be needed on reclaimed ground. (the Department of Mining and Reclamation can assist you)
  • Any evidence of high water table? (the Health Department can assist you)
  • Has the property ever been farmed? Field tile may have been installed and may have to be rerouted.
  • Is there any slope to the property? If so, how much? In some cases, benching and/or additional block/fill may be required.
  • Will the garage door be located on the front or the side of the home? Side load garages should have 30 ft. between the garage and the property line to allow adequate access.
  • Are there any obvious concerns with the property? This could include standing water, surfacing rock, large trees in the building area. These items may add additional expenses.

Site Notes
(Consider the following characteristics of your property and track them on the checklist below)

View: Views can have three levels — controlled, local and expansive. Controlled views look into a yard or prepared place on your property which you maintain. Local views look out onto nearby land you either don’t own or don’t attempt to maintain. Expansive views go out to infinity and include water, mountain and "big sky" views.

Soil: For strong foundations you want stable firm soil under the house, preferably sand, gravel or a good loam. Soils with clay and hardpan can hold water and expand when they freeze and slide when wet. Build on dry, well drained soil or anticipate problems.

Access: How do you get to the building site? Will the driveway or road be easy to build and maintain? (Determine slope with the inclinometer.) Will there be extra costs for services and utility lines? Access issues are often a tradeoff with privacy considerations. Make sure you have deeded access to the property, not just an understanding with a neighbor.

Sunlight: Will the site get good sunlight during the heating season? Are there trees or buildings that will interfere with future access to light? Can a building be designed to take advantage of both sunlight and views? Chart the sunpath for each site.

Weather protection: Which direction do storms come from and is the site fully exposed or does it get some protection from trees or land? How has the local vegetation fared? Some sites will also need to consider fire, flash flood, landslide and earthquake protection. (Trees can provide wind protection for 3x their height.)

Pollution: Is the site protected from noise, light, and smells? Can these be controlled by placement of plantings, fences or outbuildings? Could the water system be contaminated by nearby activity? What things are further away from you that may infringe on this property (check a detailed zoning map). Determine the seasonal wind direction and what it will bring to you.

Expandability: Is there enough room at this site for all the things you want to do? Consider all future buildings, gardens and landscaping. Picture the finished compound on this site.

Site Slope: The best site will allow air and water to drain away from the site naturally. Consider the path of smoke. Don't build in a hollow, cold dead air will collect there. Steep sites will have extra expenses for access.

Gardens, landscaping and crops: How is the site from the point of view of plants you wish to grow? Good soil for a house (quick draining with gravel and sand) is not ideal for a garden. You can bring in better soil for landscaping plants near the house, but if you will be doing extensive gardening or raising crops, you may want to place the house closer to better gardening soils.