For Buyers

What You Need To Know Before You Purchase A Home

Purchasing a piece of property is for most people a big undertaking. There are simply so many things to consider when it comes to the purchase of a home. If you are looking to purchase a piece of land for your own residential use, you should ask yourself the following questions:

1. Exactly how much land do you want to purchase? One half acre to one and one half acres is considered normal residential size while three to five acres is considered estate size. Five acres or more is usually reserved for family farms and private agribusiness. If the land you are interested in is what might be considered a high growth area, you should consider buying several acres at once and then selling them as individual parcels. If you price the parcels correctly you can actually recover the cost of your property plus pocket a substantial profit.
2. What is your budget? Land prices vary widely by region from a few thousand dollars an acre to a few million dollars in many metropolitan areas. However, regardless of where you are interested in purchasing land, you can reduce the price you pay per acre by purchasing multiple acres at once.
3. Precisely what kind of home do you intend to build? Different communities have different restrictions for what is or is not allowed when it comes to home building. If you are building a home in the middle of nowhere it will be unlikely that there will be many, if any, restrictions attached to home building. Home building restrictions are not quite as problematic as they may sound and in fact can actually be a very good thing. Often time’s home building restrictions will actually protect the long term value of your property by forbidding the building of homes that will compromise your homes value.
4. What is the predicted appraisal value of the home you intend to build? Before you begin building your dream home you should request a pre-appraisal from the builder. Many lenders actually require a pre-appraisal before any construction can begin. More often than not, pre-appraisals are written very conservatively and the actual price of the home will typically be significantly higher than the price cited in the pre-appraisal.

A few other important questions you might consider before purchasing land for your own residential use are: how much grading and clearing will need to be done on the property, has the property been zoned for residential construction, and are basic utilities such as electricity, gas, and cable available in the area.

If you are new to buying land or are otherwise unsure of what you are doing, you should really consider working with a real estate agent. An experienced real estate agent will tell you what you need to know and prevent you from losing your shirt on a bad investment.

Call our office today 808-329-7170. We can help you.