[Music] 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 [Music]