Frank Bell, Home Buyer in Washington, DC

When buying vacant land, what other costs are associated with the purchase?

Asked by Frank Bell, Washington, DC Thu Mar 7, 2013

I'm very interested in investing - I would like to know roughly what other costs are associated with buying vacant land. Also, I'm out of state, is there a traditional closing? Any help would be greatly appreciated!

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John Souerbry, Agent, Fairfield, CA
Thu Mar 7, 2013
BEST ANSWER
Land should be inspected for presence of toxic chemicals in the soil and groundwater (often called Phase I & II testing). Whether the site is zoned for commercial, ag or residential, you want to make sure before you buy that you're not investing in a clean-up project.
2 votes
John Souerbry, Agent, Fairfield, CA
Fri Mar 8, 2013
John - I was in Temecula on Thursday looking at land and dropping a few $$$ at Pechanga (my son lives in Sabre Springs and I visit him every month). Yup, land prices vary. It's all about location, eh?
1 vote
John Souerbry, Agent, Fairfield, CA
Fri Mar 8, 2013
John A. - you make a good point. When we buy a house we usually worry about the structure, with land you worry about water and soil, although if there is an older structure with asbestos and lead paint that we intend to remove, we have to worry about how we'll do that, too. I closed the biggest land deal of 2012 in Silicon Valley a few months ago and our toughest closing task was getting the former orchard cleared by the County agency in charge of chemical clean-ups (google "567 Maybell Avenue Palo Alto"). Less than $100,000 was spent (2.46 acres sold for $15.58M), but once a trace of chemicals was found the County protocol for contamination remediation kicked in. Luck was on our side - if the contamination was worse it could have cost 10 times that. Buyers should make sure that the site has been inspected and cleared before they get financially and emotionally involved in the property.
1 vote
Lance King, Agent, San Francisco, CA
Thu Mar 7, 2013
Pretty much the same costs. Title and escrow fees, and local transfer taxes as per customary unless otherwise agreed to in writing. But you should make sure about entitlements before buying. If requiring septic and well you should write contingencies into the contract to explore that before closing the deal. And if it's a city lot, be advised that just because there is a house on either side doesn't mean you can get access to water/sewer. I had someone try to sell me such a lot in half moon bay some years back and there was a moratorium on permits to hook up to the water supply.

I used to do a LOT of land deals in the Bay Area and we often got sellers to pay for those up front and get reimbursed at escrow if the deal closes. Good Luck
1 vote
John Arendsen, Agent, Leucadia, CA
Sun Mar 17, 2013
John Souerbry, FYI, I've flagged the two spam posts below at least a dozen times this morning. This is only one. I've been noticing an excelerating proliferation of this type of activity on Trulia for several weeks now. I don't see this same activity on other RE blogs I contribute on. Is there not a way for Trulia staff to monitor this type of activity if other blogs can?
0 votes
John Arendsen, Agent, Leucadia, CA
Fri Mar 8, 2013
Got that right my friend. Love Pachanga. Been to many concerts there.
0 votes
John Arendsen, Agent, Leucadia, CA
Fri Mar 8, 2013
John my friend, if you can get me 15.58M for our Temecula property you've got an ELA tomorrow. LOL! Congrats my friend on a great deal let alone a better comish.
0 votes
John Arendsen, Agent, Leucadia, CA
Thu Mar 7, 2013
John, you're spot on on that one. We've had a property in Temecula for 40 years that had a gas station on it and we're still paying for the clean up almost $750k later and gaining as it still hasn't been released by the State's Regional Water Quality Control Board.
0 votes
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