Buying a vacant lot is a different – and sometimes more tedious – experience than purchasing a property with an existing home. However, if you understand what you’re getting into and the process involved, building your perfect home from scratch can be exhilarating as well. Buying an empty plot of land has many advantages, including freedom and flexibility, the potential for significant savings, and wonderful investment prospects. After all, it’s usually the land value that accounts for the appreciation of real estate investments.
So read on to learn more about the land buying process in Newport Beach and beyond. And note, none of the information here is a substitute for sound professional advice, so make sure to contact Jasmine today to get in touch with the experts in Newport Beach real estate.
Set Your Goals
The first and most important step to buying land is deciding exactly what you want. A crystal-clear vision for your dreams will guide everything from your budget, location, and what features your ideal piece of land should have.
Toward that end, here are some questions to ask yourself:
Are you buying the land for recreation, investment (perhaps to rent out, develop, or subdivide), to build your dream home, or to start a business?
Are you planning to live on your property full-time, part-time, or not at all?
What features are important to you, such as proximity to the coast or urban centers, views, or potential land uses?
Buying a Lot in Coastal Orange County
Size and shape are just two small factors when it comes to evaluating a lot. Where the lot is located could make the buying experience a vastly different process than buying in another location.
Here are some things that could differ a lot from lot to lot. Make sure to check the following issues before buying land:
Zoning – A trip to the local planning & development department can be very helpful. Check whether the land is marked for commercial, residential, agriculture, or mixed usage. These come with different restrictions, fees, and taxes. If it’s strictly residential, you are free to build your dream home. Another reason to check the zoning information is to see what types of buildings may pop up around your future dream home. If the block across the street is zoned for commercial use, you could find yourself across the street from anything from a restaurant or a large convenience store. Evaluating the area zoning and looking at what future construction projects are scheduled in the area can give you valuable insight into the long-term value of the lot.
Restrictive Covenants – Some lots may let you build anything you want as long as it meets building codes, but other lots may have restrictions. These might be as simple as square footage restrictions or can be as detailed as which colors you can paint a home’s exterior. They could also be included to protect historic or environmental elements.
Legal Issues – A given piece of land may be subject to back taxes, prescriptive easements, and title disputes. Get professional help to investigate and resolve these issues.
Environmental Protections – If a piece of land is home to a protected species, this could require special permits to go ahead with any changes. However, it could also mean entitlement to special development grants.
Soil and Site Evaluation – Also called percolation tests, these evaluations must sometimes be performed on a piece of land you intend to buy, especially if the land is not part of a planned subdivision. The test evaluates your land’s topography, water table, and other factors to determine the best place to install a septic system. Planned subdivisions will likely have taken care of these tests before offering the lots for sale.
Utilities – If you’re considering a residential lot in coastal Orange County, the utilities will most likely already being in place. If there are utilities already existing at the property, you’ll have to pay the county to tap into them. There are additional and often very costly fees if the utilities need to be brought onto your property.
Access – How is the property accessed? Is there a suitable road or easement, especially for building materials and vehicles?
Condition – Make sure to check for things that may affect the quality or usability of the land, like old foundations, pipes, tree trunks, and so on. Since you are likely buying a lot to build on, it pays to dig a bit deeper – literally. You can negotiate for these to be removed by the seller.
In light of the above, here are some important steps to take when buying land:
- Determine your budget first. Speak to two or more lenders to determine what you can afford.
- Find a team of professionals to help you find the perfect piece of land, and to identify what you can or can’t do with it. This can include real estate agents, architects, and legal experts.
- Contact your local planning office for information about any piece of land you plan to buy. Check the current zoning, history, potential hazards, future developments in the area, etc.
- Hire the appropriate specialists. These will include professionals to conduct perc tests and land surveys (very important!).
- Include in your offer plenty of “discovery” time between an accepted offer and the finalization of sale. This time will allow you to find and address any “deal breakers” before committing to the sale.
A contract for the purchase of vacant property differs from a contract for an existing residence because it addresses the issues listed above. It is a legal arrangement that allows for the final sale to be contingent upon the lot meeting certain conditions when all tests and surveys are completed.
A contract may also be written to request the seller provide:
- An approved septic system installation permit
- Water quality tests on well water systems
- Hazardous material testing
- Any surveys that may be required to meet underwriting requirements
A good real estate agent can help you write a purchase agreement to ensure you will get the type of land you are expecting to suit your needs.
Building A New Home On Your Land
The phrase “build your own home” is used to refer to anything from choosing the features offered by a builder in a residential development to hammering together the timbers with your own bare hands. Here we mean something in the middle: hiring a contractor to design and build a home according to your specifications.
This kind of custom homebuilding has many advantages, such as:
No Compromise – House hunting is often an exercise in compromise. You can often find something that meets your needs, but not your wants. With a custom build, you can get the home of your dreams.
Custom Spaces – You can design custom spaces that perfectly suit your hobbies and storage needs. Need space for a home gym or a well-lit studio? You got it!
Quality – When you’re directing the process from the beginning, you can ensure that no corners are cut, at least not any corners you don’t want to be cut.
Knowledge – Building your own home means that you’ll know that home inside and out. This knowledge is invaluable for property maintenance and when the time for making renovations comes around.
Arguably the most important step in building a new home is selecting the right builder. Should you wish it, Jasmine can connect you with excellent luxury home builders in Newport Beach. Contact Jasmine today to learn more!