The National Association of Realtors’ “Home Ownership Matters” bus tour made a stop in Jacksonville last month and was parked outside the Jacksonville Marriott for the NEFAR meeting. The bus tour started in March and will run through November. It’s stopping at association meetings and consumer shows, and a team from NAR is available to talk about the value of home ownership.
(Second in a series of the process of building and selling a home.)
You can’t build a home without land.
Purchasing land is one of the first steps potential home builders will need to complete before they can begin to work, much like an aspiring new baker will need to purchase a pan before making a cake.
But, as simple as it sounds, there are many factors involved in acquiring land.
As obvious as it sounds, the first criteria is one that is similar to buying an existing home, according to one local real estate attorney.
“When looking at a piece of land, you have to decide: is that the neighborhood you want to live in?” said Barry Ansbacher of Ansbacher & Associates. “It might sound obvious, but it is the starting point.”
Schools, physical attributes and access to amenities all play a role in land purchase and price.
Tom Rodgers, a longtime local land developer and founder of Rodgers Land Development Group, said builders need to also determine just how big a house they want to help determine the “building envelope” or the separator between the interior and exterior environments of a building. Doing so will help determine just how big a lot one needs.
But, if the lot is in a community, Ansbacher said home builders need to determine any potential restrictions. Factors such as height of fences and architectural style of the house can be limited due to deed-restricted communities, which can be deal breakers for some people.
“It’s better to find out things like that early,” said Ansbacher, “then to find out much further in the process.”
There are some major differences in purchasing a lot within a community or more urbanized area than a rural area.
Outside of developed areas, home builders looking for lots need to determine if the lots can receive water, sewer and other utility lines can be accessed from the property. If they can’t, then it’s on to determining the viability of drilling a well, installing a septic tank and the like, which all come with their own tests and costs.
Wetlands, flooding and drainage are also factors in Northeast Florida that have to be taken into consideration when purchasing a lot. Each can do everything from drive up insurance on built homes to even make building more costly, illegal or impossible.
“Once people find a lot, sometimes they have to determine if they can build their home on that lot,” said Ansbacher.
Rodgers said research on such issues is paramount and can drastically alter even the best made home-building plans.
“You have to do your homework,” said Rodgers.
Once that homework is done and a lot satisfies all the requirements and likings of a home builder, Rodgers has some additional advice before finalizing a decision to purchase.
“The best thing is to go to that lot at different hours of the day,” said Rodgers. “You’ll want to see different back-and-forth traffic patterns, what activity is like around it, how the weather will affect it. You want to see everything.”
Ansbacher said such analysis can take place before the buyer spends a single dollar if they are able to agree with the seller to put the property under contract for a review phase. Generally, that time frame is 2-6 weeks.
That inspection period is often when many of the needed tests are performed. Environmental studies, soil tests, land use permits and others also factor into this aspect, but Realty/Builder Connection will take a closer look at the permitting process in the next chapter of its “Anatomy of a Home” series.
At this point, if it hasn’t yet, financing options should also be explored, said Ansbacher. Financing and qualifying for a loan building on a rural piece of property can be a little more difficult.
“People often go over their budget,” said Ansbacher. “It’s real easy to do.”
At the financing stage, Ansbacher also said a builder should be or already selected.
Once financing is in place, it’s a matter of a buyer and seller coming to an agreement and coming to an agreement, reviewing the contract and signing on the dotted line.
For those purchasing a lot with the intention to build in future years, financing is generally easier but the threat of outside changes such as land-use and zoning alterations can make the dream home that can be built today much more difficult or impossible tomorrow.
Both Rodgers and Ansbacher agree that the sooner individuals looking to build a home engage outside assistance, the better, as professionals can help avoid pitfalls and foster a deal much quicker and smoother than going at it alone.
“The earlier we can get involved in the process, the better,” said Ansbacher.