Purchasing Land : A Due Diligence Checklist

Once you have found a great parcel of land and submit an offer to buy, you will have a period of due diligence to conduct thorough research before closing on the sale. This time should be spent very wisely and efficiently so you know exactly what you are getting into with the purchase. Typically, this time period is 30 days, but can be longer if requested. There are a lot of boxes to check during due diligence, and it can be a little overwhelming. But to help you stay on track, we’ve put together a general checklist with necessary tasks to complete and appointments you’ll need to schedule. Let’s dive in!

 1. Schedule a Land Survey

Select a surveyor: First thing’s first, you’ll need to find a trusty surveyor.

Schedule your survey: Next, you’ll want to schedule your survey. As a result of the survey, the surveyor will provide a detailed description of the property, information about the adjacent properties, and most helpful to builders, potential improvements for the land. They may also help define some of the road building specifications, which may include drainage requirements. Surveyors may provide guidance to the excavator, who is essentially responsible for carving out the exact spot your new house will be built in!

2. Work with an Engineer 

Select an engineer: Do your research and find a knowledgeable engineer to work with.

Schedule a site visit with the engineer: Once you’ve found an engineer to work with, schedule your site visit and consult with the engineer on the best location on your lot for the septic and well systems.

Schedule a percolation (perc) test: A perc test determines the water absorption rate of your soil and is a necessary step in preparing for your septic system. This test can also help uncover any soils, including expansive clay, un-compacted fill, or ledge that may require blasting. Plus, you’ll want to know if any areas of your lot are subject to erosion and will need stabilization.

Get a radon test: During this time, you’ll also want to find out if your lot is prone to high radon readings. Radon is a significant contributor to environmental radioactivity and has been linked to causing lung cancer after significant consumption. If radon levels are high on your lot, you may need a radon mitigation, which reduces radon gas concentrations from the breathing air and/or from water supplies. 

 3. Get Your Utilities in Order

Research the availability of high speed internet: While your lot may be remote, you’ll likely still want to be connected. Make sure you do your research and know which providers service your area. You’ll also want to research costs and packages to find the right solution for your home.

Research the exact location of power on the road: Of course, you’ll need power in your new house! With the help of our electrician, figure out where the power lines are in your area so you’ll know where to tap into to get power to your house. During this stage, you may also want to research the power company in your area and set up your accounts with them, so you have immediate access when it’s needed.

Get a Good Well and Septic Engineer: A well and septic engineer will be responsible for sizing, designing, and building the home’s well and septic system. This engineer will have background knowledge in your state’s septic system regulations and the local health department regulations to make sure your system is within code.

4. Research Local Zoning Laws

Contact your local zoning and planning office: When you reach out to your local zoning and planning office, ensure that your land can be subdivided and is not in a flood zone. You should also research any setbacks and road frontage requirements dictated by the zoning ordinance. Plus, you’ll want to find out if there are any restrictions due to wetlands, water frontage, steep slopes, historical or cultural sites, or any other other local, state, or federal regulations. The surveyor can tell you the size of your land, but you can also verify the true size of the lot by checking county assessor records and/or the county GIS (geographical information system).

Research any renting regulations: If you are planning to rent out your new house when you’re not there, you’ll want to research any renting regulations for popular rental sites like Airbnb or VRBO.

5. Review Your Financial Obligations

Identify lenders: For the construction phase, you’ll want reliable lenders so the process goes smoothly. Look into potential loans and see what’s right for your financial situation.

Make sure your title is clear: Ensure the land seller can provide you with a clear title for the property.

Tie up any loose ends: Clarify if there are any liens, rights-of-way, easements, covenants, other deed restrictions, or encroachments on the property. And also, ensure your new property has legal access to power lines or other utility connections, so you don’t have to cross over private land to access them.

Clean up your property: Research if the land was formerly used to store old vehicles, farm chemicals, industrial chemicals, or other toxins that will need to be cleaned up. Organize (and fund!) a proper cleaning, if needed.

Check on the property taxes: Ensure that the property taxes are paid. Most county assessor’s offices have online tax records that allow you to look up the current amount due on the property. Find out if the county assessor will reassess the property once it’s sold and the methods for doing so to estimate your tax burden.

6. Consider These Items When Planning Your Build Site

Think about potential views: When scoping out your lot, think about where you might want the house, backyard, or even your porch positioned on your land. What position would give you the best view from the kitchen or the living room, or should the front door open up to the view? It’s all up to you. Just be sure to think it through so you find the best option for your preferences.

Consider the locations of your driveway: Depending on the terrain of your lot, you may want your driveway to be large, include a loop, and provide additional parking areas. Or you could be fine with a simple, straight driveway. Think it over as you plan out your lot.

Feel out the locations of additional amenities: Will you want to add to your property with gardens, garages, outbuildings, or even pools? Consider where these additions will be located in relation to your home and its surroundings.

We know there’s a lot to do when it comes to purchasing land and building a new house. But, breaking down each step and following this plan will help reduce the stress!