Buy land for your new home in Detroit – Buying an existing home is out of the question for many people. Perhaps they don’t want to deal with a seller’s market or simply want a brand-new bespoke home. Many people would rather acquire land and build on it for whatever reason. They aren’t often prepared for the unique hurdles that come with purchasing land to build on. With that in mind, here are some suggestions for buying land for your future home in Detroit.
Check Zoning and Soil Quality
People buy land in Detroit all too often merely because it looks lovely and/or has fantastic views. They buy based on appearance alone, ignoring zoning laws and regulations, soil condition, and potential concerns such as flooding.
According to one top agency, here’s a common scenario: “Someone purchases [lane] because it is so adorable. They won’t be able to build on it and resell it. It’s bought by another sucker, and it happens again and again.”
So industry pros recommend that you “Check the zoning, grade, and soil quality, as well as any other local characteristics that may prevent a house from being built on the property. Even if there is an existing home on the land, it’s always a good idea to verify because zoning or soil quality may have changed since it was built.”
If you’re unsure where to begin or how to check on these important matters, you can consult a Detroit agent. Just call (248) 487-1877 to discover more.
Investigate Utilities and Sewer/Septic
When you want to buy land in Detroit for your new home, you should investigate if utilities are connected, the availability of sewer service, and the suitability for a septic system.
“Undeveloped, vacant land…may require additional work in order to connect to utilities such as electricity, gas, and plumbing.” If you don’t have access to utilities, budget for the added work.” It can be quite costly.
“A sewer hookup, for example, may even require construction on the street in front of the property, which requires additional permits and more money. . . . [I]f a septic system s required, you’ll need to factor in additional soil testing before you can get started, which can add hundreds or even thousands of dollars to your total. And that’s not even (including) the cost of the septic tank.”
Consider Saving to Pay Cash
When buying land in Detroit, you should also save and be prepared to pay cash. This is because mortgage lenders are significantly less likely to lend for “raw, undeveloped land than for an established house because raw land has too many unknowns.”
“The advantage is that if you can pay cash for the land, the lender will be more willing to fund the construction of a new home. Assume you own the property outright (without a loan). In such situation, the lender may treat your ownership as a down payment for construction financing, which can then be converted into a standard mortgage after the project is completed.”
Look Into Value of Nearby Homes
Before you buy land in Detroit for your new home, you should also research the values of the nearest homes.
Building a home is a significant investment, and you want it to appreciate (or at the very least keep its value) over time. If the adjacent homes are less valuable, your home’s value will decrease. “However, if it is of equivalent or slightly lower value than the adjacent houses, it will be worth more.”
Here’s an illustrative example . . .
“If your new home costs $500,000 to build but the homes around it are valued at $250,000, you might have a hard time selling it for what it’s worth. On the other hand, if you spend $300,000 on a house and surrounding properties are worth over $1,000,000, your house will be more appealing to purchasers and command a higher price.”
Hire a Detroit Agent Before Making an Offer
You can certainly start looking for land on your own. The search for the perfect piece of land in the perfect location is a big part of the joy and excitement. So go ahead and check through the listings and drive around to see what you can find. Hire an experienced Detroit agent before you buy land in Detroit or even contemplate making an offer.
You’ll have some rights if you engage with an agent, such as the ability to back out of the contract if the property isn’t suitable for building. A qualified agent can typically tell you whether the land is in a flood plain, whether there is rural water and power in the region, and what type of building restrictions are in place.”
Your agent can also construct an offer that protects you while simultaneously getting you the greatest value. “An agent can… draw up an offer that allows you to back out if the local building authority denies you a building permit or if you can’t get financing to build.” You’ll have to pay the agent’s commission at the end of the transaction, but it’s worth it to avoid being trapped with un-buildable land.”
Don’t overlook the advantages of dealing with a competent agent. Contact us at (248) 487-1877 when you’re ready to acquire land in Detroit for your future house.