So, as you know, we’ve found a great piece of land. 8 acres in a prime location for us. It’s perfect placement! We’re currently in the process of setting up a closing date. Mind you it’s been two months since we started this process.
There’s quite a few ways that you can go about buying and building. For one, we could’ve gone the traditional route, going through an agent, finding a piece, and paying commission fees if not covered by the seller’s agent. Instead, this didn’t work out for us- since we couldn’t get financing for the land in time for the proposed closing date… twice! We could’ve gone with a land loan through a bank, but like construction loans they would’ve taken about 2 months to process. I personally find this to be extremely ridiculous!
Or you could go through a private sale, using your own lawyers and such. This is what we did. Originally, we were going to use the same lawyer as the seller. I knew this lawyer personally on a different ground, so I thought it would be ok. After much discussion and debate- we felt it better to use our own lawyer- and frankly, he’s amazing and I’m glad we went that route. The seller’s lawyer has been pretty difficult to deal with. Once we got our own lawyer it was like the seller’s lawyer got upset when I’d try to talk to him- but then he’d turn around and talk to me directly after saying that all discussions should go through my lawyer. It made a lot of sense (I hope you hear the sarcasm in these words…). Anyways- our lawyer was cool though, as he knew we were very new at this and certainly didn’t know what we were doing right or wrong. He’s been a breath of fresh air and I’d recommend him to anyone!
That aside, our closing date is supposed to be this coming Monday. Originally, we were notified that we could close on November 15th since all the paperwork was complete and ready to be signed. I told our lawyer this and he said that under no circumstances are we to sign without him viewing the documents (well duh, that’s why we hired you, haha!). So I continued to follow up with the title company that was used to make sure that our lawyer got all the paperwork.
He didn’t receive it till Wednesday (November 24th) this week, the day before Thanksgiving. I emailed him once I got the phone call and told him, first off – I want him to have the time to go through this without feeling stressed out or anything and I felt that they didn’t give us enough time to move money from savings to checking… granted I’ve already done this and we are ready to go- I still have to go to the bank to get a “bankers check” for the closing itself.
This is why I love our lawyer- he emailed them back and said that he was leaving soon for Thanksgiving and that since the paperwork took so long to receive, there was no way that he’d have time to review all this before the closing on Monday- thus pushing back the closing date shouldn’t hurt anything since it took so long for the paperwork. Like I said, he’s awesome! He also sent us all the paperwork so that Mike and I can review it and ask questions.
Obviously we’ve been looking at the closing costs pretty hard to make sure that we have enough money and that we aren’t getting screwed or something. So it looks ok with one exception. The lawyer fees are in the sellers’ lawyers name. We want to make sure that that fee is going to OUR lawyer- since he’s the one doing the work for us and NOT the seller’s lawyer. We’ll see if it is the cost for our lawyer or not. I’d rather have our lawyer get that money anyways- obviously. We’ll see how it goes if it’s really for the seller’s lawyer. I’ll protest it without a problem, we’ll just see if he budges.
Anyways, that’s where we are on the land currently.
Some things to think about before you begin your quest to buy land and build:
- Step one: make sure you have enough money for a deposit and down payment. We do now, but originally we were going to try to borrow. Sadly the party we were going to borrow the down payment from ended up being a dead end. This is a story for another day.
- Step Two: Decide if you will be going through a bank or if the seller offers financing. If you go through a bank decide if you are going to go with straight construction loan, which most banks have a time limit to when the construction needs to be completed, or if you will be doing a land loan. The bank we are still looking at is one year for a construction loan.
- Step Three: Know that these processes take time. Land loans and construction loans take about 2 months to process right now. This may change as the economy gets better, but know that this does take time. If you go through a bank, make sure that you put your closing date a couple months out due to bank processes. If you go with a seller financing loan- know that this also, apparently, takes two months… which under normal circumstances, it really shouldn’t.
- Step Four: And I will continue to repeat this throughout my posts: ALWAYS ask the question you may have- no matter how ridiculous it may seem. You want to make sure that you are protecting yourself as well!
- Example: Question: Should I get a Perc Test done before officially saying “Yes I will buy this land”. Answer: absolutely! You want to make sure that it’s not going to cost a fortune to put a septic system on your land!
- Question: Should I ask about any special circumstances this land may have i.e. Wetlands protection? Answer: absolutely! You also want to make sure that the land is buildable or (like us) if the land requires any special driveway stuff in order to get INTO your land. Our land actually has a small designated wetland area in the front, so we will have to build our driveway with a special covert to make sure we don’t disturb the wetland too much. It’s fine, we just need to go through a little bit more crap before we start building.
There are so many things to consider when buying and building land. This is what we are going through now. I can only hope that this helps some of you out there as you begin your projects in building.
I’ll let you all know how the closing goes! J
Happy building!
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