Purchasing a Lot
First of all, let me explain that we were not moving because we had to - we were moving for the sake of moving and as a result we had a lot of time to think about where we wanted to move, what type of house we wanted to build, and we were very flexible in terms of timing. In other words, we were in no hurry, we would buy a lot when we found one we thought suited our needs.
So, the process of buying a lot was not a quick one. We took our time, and looked pretty much everywhere within 30 miles of our current house. We ended up purchasing the lot about a year after we first started seriously looking. We quickly learned that there are plenty of lots available to purchase, however, most lots are already claimed by a builder which means that the builder will only sell it to you if he will be building the house for you. This is not what we wanted. We wanted to flexibility to pick our own builder, or even be our own general contractor for the job if we decided. This made the process of finding a good lot much more challenging.
We eventually found a couple of lots we thought would be nice; they were in the same general area only a few miles apart. The choice between them was quite easy - one of the lots was $20,000 more than the other, and would have been more difficult to build on (it was a bit steep with a nasty ditch near the front of the property that would have to be dealt with).
We purchased the lot near the end of February and are very content with our choice. The lot is just shy of an acre, in a rural subdivision with a beautiful view of the Wasatch Mountains just north of Morgan, Utah. (See pictures.)
What I learned
We had looked for lots for quite some time, and the one we ended up buying seemed like a very good option and a good value compared to the others we had seen. The lots in the subdivision were going fast - and we were getting a bit nervous that we would lose our chance if we did not act quickly. In fear of losing our opportunity, we made a full price offer. Later, after a bit of research and conversations with others in the subdivision, I found that most buyers offered a few thousand dollars below the asking price and their offers were accepted. I think we left a little money on the table.
Also, after we had completed the purchase of the lot, I noticed among a bunch of weeds near the front corner of the property about a yard and a half of concrete that had been dumped by a cement truck. Had I noticed that before we finished the purchase, I could have negotiated with the seller to have it removed as part of the conditions of sale. After we had completed the purchase, of course, we had no leverage - so now we have to bear the cost of getting rid of it.
Last, a couple months after we purchased the lot, a builder working on the lot next door started using our lot as a storage place for his materials. I was not too concerned because we had no plans to start building right away, but after he finished his job and moved on, he left piles of rocks, dirt, garbage, scrap materials, etc. piled up on our lot. It took a couple of months and many phone calls to finally get him to remove it. It might have been a good idea to put up a small "no trespassing" sign on the lot and report violations to the city when I saw them - it would have saved us some grief.
Other considerations when buying a lot
- Your realtor should be able to find out how much comparable lots have sold for in the subdivision. Do the research and make your offer accordingly.
- Make sure that you can locate all of the markers from the lot survey (i.e. the borders of the lot) before you purchase. If you cannot find them before you purchase, require the seller to either find them or have them replaced as a condition of the sale. You will not be able to start building until all the markers are located.
- Even though you might not have your house plans when you purchase your lot (we did not), make sure you at least have a general idea of what you are going to build (i.e. two story or rambler, approximate square footage, etc.) Otherwise, you may purchase a lot that you find out later will not suit the house you want to build.
- Different cities and counties have different "impact fees" that you have to pay when building a house. If you are comparing different lots in different cities, compare the impact fees between the areas as it can make a significant difference in the price, which may influence your decision. The building commissioner or planning department of the city should be able to give you an estimate of the impact fees for any lot that is for sale.
- Make sure your utilities (i.e. gas, electricity, sewer, phone, etc.) are stubbed into the lot before you buy. If they are not, you will have to pay to have them stubbed in before you can build, and the cost can be outrageous.