The standard real estate admonition about location is especially true in the case of buying or selling undeveloped land. There are many factors at play when evaluating the worth of any given tract. Whether it's undeveloped land in the path of a growing city, or land best suited for other uses, including agricultural or industrial, buyers and sellers must understand both the economic truths about real estate and the emotional factors that influence buying and selling decisions. Due diligence is required.
Basic guidelines about how to approach a land transaction, whether it's a single lot or multiple acres, can be confusing and misleading, and sometimes a fair amount of sleuthing is needed to get complete answers. At a minimum, buyers should expect to explore the following general areas:
Legal Descriptions and Surveys
As with other real estate transactions, a full legal description filed with proper authorities and a comprehensive survey are invaluable to help prevent possible legal disputes. Even if not required by a lender or for pending construction in the short term, the property documentation is a priority.
There are several types of surveys; knowing how detailed and the specific type necessary is important, and can also save time and money if land is slated for subdivision or immediate development. Even if the land is for agricultural purposes, or for long-term personal recreational use, ordering a boundary survey is a smart choice. A topographic survey and soil samples are other forms of land studies that are important, particularly for drilling a water well or installing a septic system.
Access, Easements, Water and Mineral Rights
Whether the tract of land is urban or rural, large or small, situated within a municipality or in an unincorporated jurisdiction, there must be clear and undisputed ingress and egress in order to use or develop the property. Existing easements, whether for utilities or for access, should be detailed and fully explained prior to purchase, as well as noted on the survey and property description.
The availability of water, or water rights and whether or not underground mineral rights convey or are retained by the seller are stipulations that any buyer will want to know about. Seek appropriate legal advice for anything that is not clearly spelled out in a purchase agreement.
Development: Opportunity or Headache?
While a land purchase may be a wise investment, land is not normally purchased with the intent of profiting from a quick resale. When a buyer purchases land with the intent to build a new construction home on it immediately, there are associated requirements, including the need to conform to zoning rules or seek variances. Building a single residence may be simple, but installing infrastructure for commercial use can be complicated and expensive.
Be certain to analyze the feasibility of building and development plans prior to closing on the land. While some people harbour dreams of developing a residential subdivision or readying bare land for future growth, those ideas are best left to professionals.
Potential Zoning Issues
Bare land in the path of an expanding municipality may already be zoned for a specific use. Altering existing zoning is possible, but it can take time and necessitate many levels of approval. The concept of the "highest and best use" sometimes proves to be a stumbling block. Then, too, a Cougar Ridge new home buyer should always be cognizant about what kind of development is planned for nearby vacant land, and whether surrounding land is privately owned or government land.
The best way to assess both current and future value is to know the market, work with a professional Realtor, identify the current use and future plans for surrounding tracts and proceed with caution.