1. Contact a REALTOR®
Lots can be found all over, sometimes there are existing buildings, sometimes they are listed as “commercial” properties.
Talking to a REALTOR® about what you are looking for in a lot enables them to help you find the type of property that will work best for you.
2. Get your finances in order
If you will be getting a mortgage to purchase this property, now is the time to contact your mortgage broker and fill in a mortgage application. Get a 90 day hold on the credit offered. Secure buying power is key to making sure your lot purchase doesn’t fall through at the last minute.
3. Go see properties
Now that you know your price range, start seeing the properties your REALTOR® finds. If you see something you like, go to the development or land department in your city. Find out:
- What does the zoning allow for?
- What is the OCP (Official Community Plan)? Cities and towns will have a plan for 30 years or more into the future. This will help determine potential value.
- If rezoning is possible. This is important if you’re looking to rezone for long-term investment, and less so if you’re just interested in living on an acreage.
This is also the time to figure out what sorts of amenities the lot has, including utilities like electricity and natural gas.
4. Check comparables
Don’t let one lot win you over and offer the full asking price up front. Check on comparable lots and recently sold lots nearby to help inform you on a fair offer to make.
5. Write an offer
Enter negotiations with the property-owner, by writing an offer using the information you gleaned from checking out comparables.
- Work out the price, timing, and dates.
- Determine the subjects (which include a survey of the land, and engineering report, and other things your REALTOR® might suggest.)
6. Come to an agreement
After a few rounds of offers and counter-offers, you and the seller have reached an agreement! You will remove the subjects by having your surveys and engineering reports done, and ultimately you will pay a deposit, usually about 5% of the agreed-upon price of the lot.
7. Select a notary and lawyer
Your REALTOR® will help suggest a notary and lawyer to help finish up the transaction. Register in the land titles office to secure your ownership of the property.
8. Build your house
Congratulations! You now own a lot and can start construction of your dream house or new investment property.
All information courtesy of Oscar Barrera – www.obsold.com
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