You’re finally here! You’re looking for land to build your dream home. This can be a very exciting time but there are a lot of details and important items to review prior to purchasing the land itself. Yes, price and location are important but they are just the beginning. There are several hidden costs and fees involved with purchasing land and beginning the construction phase. I want you to be aware of these costs and how to avoid some of them.
Depending on the development of the land there are several items that you may need to have installed on the property before you can even begin development. Here are just some of the items that you’ll need to consider:
- Survey
- Septic system
- Drilling a well or pump
- Excavation, blasting if needed
- Easement roads, paving and driveways
- Permits and building fees
- Utility hookup including phone, electric, cable, gas, water and potentially sewer
- Impact fees (also known as development fees, mitigation, service availability charges, or facility fees, which vary by state and municipality)
Impact fees are probably the biggest one that many homebuyers and home builders don’t understand. These are assessed individually by town or city to pay for schools, infrastructure and public facilities. About 60% of all towns and cities with over 25,000 residents will require impact fees but be sure to check with your specific municipality for details. NOTE: Kerrville is only about 22,000 residents and does not incur impact fees
When purchasing a home there are many costs to estimate including the land and the building costs. Not only will you have the cost of land but any brokerage fees if necessary.
Permits may also be required for septic, well drilling, driveway construction and of course the building itself. If you’re not going with septic, sewer tap fees will need to be added on as well. If you don’t have a well, municipal water tap fee will also be added.
Depending on the state of the land and how raw it is, other fees may include a planning review, certain inspections, land clearing and curb cuts. Many lenders and building departments will also require a survey which could cost anywhere from $400-$1000 depending on the size of the property.
You may also be required to pay an engineering inspection. This is specifically for steeper grade sites, wetland sites, or land with problem soils. Soil testing may also be required based on the engineering inspection.
Landscaping can also be an additional fee unless you’re planning on doing a lot of it yourself. Clearing the land, excavation and even blasting may be required depending on where you’re putting the home and if it is allowed to be placed in your desired location.
Avoiding some of these unnecessary fees is possible if you choose a plot or parcel that is already permitted, developed, accessible and routed for utilities however, you would likely be paying more in the purchase price.
For more information or to answer questions about your land purchase for development and building contact my office today.
