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Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in
lovely Greenville South Carolina I am
your host Stan McCune as always and all of
my contact information is in the show
notes reach out to me for any
questions you guys might have on the
show reach out to me if you need a
realtor if you know someone that needs a
realtor I am your guy I can help you
and as always please if you haven't
already subscribed leave the show a
rating and give us a review I really
appreciate when you guys do that I'm
doing this for you guys and that's just
something that you guys can do for me in
return and I would just greatly
appreciate that today we're going to be
talking about buying land buying land
it's something that I have been
dealing with lately with with some
different clients and so it's kind of
front of of mind and it's not really
something we've talked about that much
I don't plan for this to be a very
long episode I because I'm not going to
go into a ton of detail we're just going
to assume that you're listenting that
you don't have a ton of experience
buying land what are a few things that
you need to consider that need to be a
part of the of the consideration as you
look to to purchase land as you are
doing your due diligence and all of that
there is right now in this market a lot
of people that are starting to look
towards purchasing land that is more and
more questions that I'm getting from
people can I purchase land and then just
build my own house I'll hire a
contractor just build my own house
and the answer is yes but you have to
understand the challenges of doing that
it's not it's obviously not the
easiest thing in the world and so there
are some questions that need to be asked
when buying land I think the question
really the first question you need to
ask is is there a contractor that you
already have that you want to do this
project that's so important and and last
episode we talked about vetting out
different parts of your dream team and
the contractor your your real estate
dream team and the contractor was one of
the parties that we discussed really if
you're looking at land before you've
looked at a contractor it's pretty much
cart before the horse because what good
is the land going to do you if you can't
build on it now there are some
situations where maybe there is just a
great opportunity for land something
that just came on the market that's just
incredible and and maybe you don't know
who your contractor is going to be but
you don't want to lose out on the land
okay I get that that that might be a
situation where you do get the cart
before the horse but if you're looking
at land you need to be interviewing
contractors as well you need to be
getting your your contractor teed up
make sure that you have someone
really a couple of people at least kind
of teed up and in line for if you find
land that you can start moving forward
with the process and honestly you
probably need to start working on
designs now you you might and and
by designs I mean designs for the house
now you'll probably have to to sign a
contract with the contractor you'll
probably have to start paying a money to
do that but that's going to really
impact a lot of different things when it
comes to the land itself when it comes
to how you approach purchasing the land
itself and so that's the first question
the first matter to address is the one
of the contractor who is the contractor
going to be and do you have good
rapport with that person have you
already started the process with that
person that will help you a lot the
second question you need to ask yourself
is are you willing to wait because this
is a long process it's not like you know
we're used to seeing production Builders
go into a neighborhood and after like
you know three months they already have
their first houses that are that are up
and and that you can see in the
property that's that's just not the way
it works when you're building a custom
home and so you need to keep that in
mind it's going to take a while it it
depends on the land it depends on the
contractor but I would I would budget
for a good year again depending on on
what all you're doing you need to be
thinking in those terms right now a
lot of contractors are booked up so they
can't even start the project probably
for sever weeks perhaps even several
months are you willing to wait or are
you looking to move now are you looking
to take advantage of of the good
interest rates that we have right now
they're still good by the way not not
quite as good as they were last year but
they're still quite good at least as
of when I'm recording this which I'm
recording this actually at the end of
March I do record some of these ahead
so hopefully not a ton has changed
since I've recorded this and and
released this podcast the Third
question you need to ask yourself is can
I do what I want to do with this land
and and this is of course a very
important question there are a lot of
again I'm not going to go too deep into
this but there are a lot of
considerations to consider with this
the very Basics are looking at the
topography looking at the flood planes
in the area you can get a sense right
away of of some so you can go on FEMA's
website and see if something is in a
flood plane that's really the the
first thing to do that's a really simple
part of the process obviously looking
at the to Topography is a very important
part of it as well are you wanting a
basement home well if you're on if
you're buying a flat piece of land
you're going to have a hard time putting
a basement in there right what are you
going to do excavate and and dig out a a
massive hole so that you can drop a
basement in there there that that's
not very simple and and and it's
certainly not
recommended what type of restrictions
are there and restrictions come in
a variety of forms obviously we need
to look at the zoning and the land use
and all of those things and sometimes
the county whatever County it is that
you're looking to build in is willing to
modify some of those things but often
times you're you're kind of stuck with
the actual zoning and the actual land
use and whatnot that is there you
also need to consider things like are
there back taxes you know if if there
was something that you're purchasing
that was like originally used as
Farm type of property and now they're
trying to sell it off they might have
all sorts of back taxes that need to pay
who's going to pay that is that
something that that is going to be a
deal breaker for you
so you can kind of start to get out
in front of that by just looking ahead
at the zoning looking ahead at what
the land used to be used for there there
can also be what we call deed
restrictions and these could also be
called restrictive covenants but even in
an area that doesn't have an HOA now
obviously you want to see does it have
an HOA first first and foremost even if
it doesn't have an natureway there could
be deed restrictions and what happens is
some people when they sell off land
they want to ensure that things don't
happen to that land that they don't want
to happen to it this is most common
when for instance someone owns like 20
acres and they split off like five acres
and and sell that off but they want to
keep the other 15 so they want to
restrict how those five acres right next
to them are used and so they'll put some
some deed restrictions in there that
can restrict how you use the property
there are of course different
restrictions based on whether you're in
the City versus the county and and
all sorts of of different things like
that some Lots don't allow you to build
multiple houses on them some do some
it can't exceed a certain size some it
has a minimsize I mean there's all
sorts of different things a ton of
different things you need to consider
and and we're not going into all of that
detail here let me just tell you if
you're looking at land it it's not as
simple as just oh I'm just going to buy
this land and just throw a house up on
it or throw a duplex up on it or build
apartments on it there's a lot to
consider you're going to have a due
diligence period
ideally and you want to check to see
what's available out here do we have
a sewer are we going to have to do a set
itic tank do we have water are we going
to have to do a well these are things
that come up in the in the due diligence
and and you know if you have to have a
septic then you have to do what's called
a perk test and that actually involves
them like drilling into the ground and
you might find you can't put the house
where you want to based on the perk
test so there's all sorts of
different considerations like that
the nice thing is that the our South
Carolina land contractor we actually
have a specific contract form for land
it does cover a lot of those things
in there there are different
contingencies in there that are land
specific and and so that comes in
handy but but there are so many
different things to consider you want to
make sure that you have and this is also
part of why it's good to have the
contractor teed up on the front end
because the contractor might see some
things that are are red flags to him
or to her and those are things
that perhaps you wouldn't first notice
or or maybe that I wouldn't even first
notice I'm not a contractor I I've
never built a house from the ground up
with my own hands and so it's good to
have those people to help you out
going through that process and of course
I assist in a variety of ways when it
comes to that as well and the fourth
question and this is a obviously a
important question is how do you want
to buy this land and there are several
different ways you can do it but the
there are kind of three that are the
most common and we're going to go and
order from simplest to hardest the
simplest is to just buy with cash
buying with cash is the cleanest way to
do it it gets you the land up front
and then you can start doing whatever
you want to do on it
and it it just gives you flexibility you
don't have to worry about you know all
the the different aspects of getting
financing on it you don't have to to
deal with all the headaches of of having
the financing contingency and then
possibly losing out on the land purchase
because of that all of these
different things but a lot of people
don't have the cash to to purchase land
which is understandable and so then
at that point they have to finance it
and they're really there's more than
just two routes but there are
two popular routes to go and they
kind of overlap a little bit so the one
is you can just Finance the land now
there aren't very many banks that will
do that but there are some in this
area that will just provide you
financing for the land and then after
that you can then get financing on
the home itself on the construction now
when you do that probably you're your
construction loan is probably going to
buy out the land loan so you're not
going to have a loan on the land and a
loan on the house the bank that's
financing the construction they don't
like that they want to make sure that
they have the whole enchilada they're
going to buy out your land loan so that
you have everything ultimately under one
umbrella so you might say well why don't
I just do the construction loan first
Well you certainly can do that that but
now you have to understand that now you
just added a layer of complexity to the
land purchase where now you have to
basically have everything teed up as
part of the land purchase itself you
have to you know have all those permits
ordered you have to have all your house
plans designed everything teed up as if
you are building the house pretty
much right away in order to just
purchase the land and you might not be
ready for that you might not have all of
that designed out you might not be
fully prepared for all of the aspects
of that everything it goes into that
your contractor might need more time
and so unless you have done that that
can be kind of a difficult way to
purchase the land for most people the
simpler way is to to go the route of
buying cash or financing the land and
then getting that construction loan
later but technically you can do it all
at the same
time and and some of these construction
loans depending on the lender they
might lock you in with a rate right up
front and this is what your rate is
going to be this is going to be a what
we call a construction perm loan you're
going to have this rate for 30 years
and others might give you an upfront
rate and then say we're going to lock
you in with your permanent rate later on
30 to 60 days out from the
completion of the of the home being
built and and really between the two
of them the better option is the one
that will give you the rate up front
because usually they still have the
flexibility let's say that rates go down
usually they still have the flexibility
to relock your rate with the lower
with the lower rate later and so
that's something that you have to talk
to your lender about and obviously I
can recommend lenders like I always
always do for for my clients that
need them but but but those are all
the the things to consider there now
a question that I frequently get is you
know
about the actual contractors if we
can kind of backtrack a little bit
because I've gone through the the the
the main questions to consider but then
kind of a side note question that goes
back to the contractor question is can
you use a production Builder on your own
land for instance can you use like SK
Builders which is a reasonable Builder
around here will they build a custom
home on my land and oftentimes the
answer is yes but production Builders
you know they have a certain way of
doing things and yes they are can be
a little bit more economical in a lot of
ways but often times you're you're going
to be better off just getting a company
that specializes in Custom Homes versus
a contractor that is more comfortably
a production home builder just doing a
bunch of communities and so that's
the situation you definitely want to
interview a lot of different people if
you don't have one already and make sure
that you get one that you're comfortable
with those those production home
builders they you know they don't do
a ton of Custom Homes they're not
designed they don't have their an
organizational structure often times
that is really designed for that and
so there's a lot to
consider when you're when you're
dealing with them that you might run
into some frustrating things down the
road and so I would just caution you as
a side note caution you about that
oftentimes it's better to go with a
smaller local Builder than a production
type of builder at the end of the day
it's your home and it's your land and so
these are that is a a really quick
overview of purchasing land some things
to consider if you've not thought
through them maybe some at some point
down the road we'll do a little bit more
in detail episode about that but for
now that's it that's all that we're
going to do for land purchasing if you
have further questions let me know I'd
be happy to help you out all my contact
information is in the show
notes yes and rate and review And
subscribe all those things like we
always like I always tell you guys to do
I appreciate you guys listening I
appreciate all my clients I hope you
guys have a great rest of the week
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