Saddle Up For Your Guide to Discovering Texas Land

Congratulations! You’ve found your new house and now you just need the ideal property to make it a home. Selecting your home is an exciting experience & by choosing the land and house independently you have the incredible opportunity to to make it truly your own. I am looking forward to helping you realize your vision and help you navigate the land buying experience. The first step is asking yourself the following questions:

• What is my budget for raw land and improved land?

• Where do I want my new home?

• How much land do I need?

• Will I have livestock or exotic pets?

• Do I want my home in an HOA, a POA or do I want unrestricted land?

These are the most essential questions when you are beginning your search. It’s also important to make sure you understand what you have set aside in your loan for land and improvements separately. If you are given a budget of $30,000 for land and $30,000 for improvements. What that means is you could purchase a parcel up to $60,000 if that property did not need improvements. Every improvement a property already has onsite will take from your improvement budget and add to what is allotted for land since you won’t need to buy something that is already included.

What are improvements?

Improvements are alterations to raw land. Driveways, fences and decking are all examples. Most importantly this includes the installation of your utilities like water, electric and septic. Finding a property with utilities already installed is a fantastic but rare find. Most available land will be raw.

What will it cost me to improve a property?

When looking for a property keep in mind that each location is authentically unique. There is no way to know for certain how expensive a property will be to build upon until it has been inspected. However, there are some potential problems that can be spotted. A property with a slope may need to be leveled or have retaining structures built that could drive up your over all cost. A heavily treed lot provides an excellent opportunity to sculpt your surroundings but the cost to remove all of those trees will be much higher. If a property is in a flood zone it may need elevation or pricier insurance, etc.

Ease of access to utilities is another important factor. If there are power poles on or near the property, electricity should be easy and inexpensive to connect. A property in the middle of the country with the nearest pole several streets away will cost a great deal more. Likewise, if there is a water line running near the lot plumbing will be much more affordable than drilling a well. There are benefits to wells, such as no water bills, but they are a large upfront expense. If you are looking for a well you could always get a bid and have one installed later, using the affordable city water interim.

Equally important is the ease of access. If the road leading up to the property is narrow or hard to access it may be difficult to move the home onto the lot. A long easement if it has overhanging branches for example may need expensive trimming to make room for the home’s delivery.

I think I’ve found the property… now what?

When you have found a property and you would like to move forward contact me and I will write you an offer. As your agent I have a fiduciary duty to uphold. That means I will only act in your best interest. I can advise you on what I believe would be best but ultimately what you want to offer on a property is solely up to you. If the offer is agreeable the seller will sign the documents making it an effective contract. Within 72 hours of acceptance both checks for the earnest money and option money will need to be delivered to the appropriate parties. I do not send out check information until a contract has been put into effect. If you believe you will have an issue with this time frame contact me and I will assist you. Timing on these checks is extremely important and not adhering to the time frame could put you in breech of your contract with the seller.

What is earnest and option money?

Earnest and option money are both important in the offer process. Earnest money is to assure the seller that you are making the offer with the genuine intention of purchasing the property. Earnest money on a pre-existing home is usually 1% of the sales price. It sometimes is for land as well but usually you are looking at $500 in earnest. Your earnest money is always fully refundable during your option period. It is also refundable for a negotiated time afterwards based on your ability to get a loan. The option money is $10/day standard and you will have the unrestricted right to terminate the contract during this time for any reason and receive a refund of your earnest, usually within 2 weeks from the day of termination. If you exercise your termination option the seller will keep the option money as compensation. If everything goes as anticipated you will receive a credit in the amount of both checks to be applied to your closing costs.

Why do I need a survey?

You may or may not need a pre-close survey but you will need one after the house is set. A surveyor will flag the corners of the lot and create a detailed and accurate map to reflect your property lines and any improvements upon the land. Some lenders will require a pre-close survey to ensure that the land they are purchasing on your behalf is as advertised. Once the home is set a survey showing a vacant lot will no longer be an accurate representation of your property. No one but a professional surveyor can guarantee the boundaries of a property. You can ask the seller to pay for a pre-close survey on your behalf or offer to buy one at your own expense. A survey can be rolled into your loan if you prefer it over an upfront expense.

What is a title policy?

A title policy is a one time insurance that guarantees you have free and clear ownership of your property with no surprises that could potentially endanger your investment. Title companies are extremely important to any land or home buying process. Please watch the short video below explaining what a title policy is and how it works. The cost of the title policy is already accounted for in your loan but during negotiation it is another expense you can ask the seller to pay. Whoever is paying for the title policy typically gets to chose which title company will be handling the transaction.