With some variations, the process of buying land is similar to buying a home. First decide on your price range and some basic parameters, like the general area and approximate parcel size you want, then arrange financing, survey the market to see what’s available, and make an offer to buy.
Buying land on which to build your custom dream home in the near future is a good idea. Buying land as a long-term investment, unless it is at least 35 acres in size, may not be a good idea because state and county regulations change over time, limiting the use (and therefore the value) of the parcel in the future. While these changes may differ in content, you can be sure that their direction will be toward more restrictions on drilling wells and preserving our uncrowded natural landscape.
Things to consider when buying land:
Orientation – Which way does it face? South is considered best because the winter sun is lower in the sky and it warms south-facing lots and homes. But don’t be dogmatic about southern orientation because, for example, many of our best lots with mountain views face west.
Topography – It is a rare parcel that offers both level terrain (like in a valley) and sweeping vistas (like on a mountain top). Neither is better than the other, you just need to decide your preference.
Access – County-maintained roads are typically preferred but some areas are served by homeowner association-maintained roads and more private, secluded areas may involve maintaining your own private drive for some distance. You’ll also want to confirm the legality of your access right-of-way.
Zoning – Different zoning allows for different uses. It is possible to buy a parcel and subsequently find out you must rezone (a potentially costly and uncertain process) in order to build.
Water – Most lots away from town get water from a well. You can generally anticipate that lots subdivided before 1972 are eligible for a well permit, but it’s best to confirm you can get a permit before buying. Plan on spending around $10,000 or more for a well. If you buy a lot served by a community/public water system, be sure to check on tap costs and availability.
Soils Testing – Why do you need a soils engineer?
1. Septic tank “perk test”
2. Soil analysis for real estate transaction
3. To apply for building permit
4. Construction recommendations
5. Drainage recommendations
6. Repair/mitigation recommendations
7. Maintenance recommendations
8. Check specific soil conditions
9. Expert testimony for litigation
Sewer – Most lots requiring a well for water will also require a septic system. In our area, septic systems typically consist of a 2-compartment tank with leaching field and must be over 200 feet away from any wells. Advanced treatment systems allow setbacks of less than 200 feet, but it is always a good idea to confirm availability of a septic permit before buying. Plan on $10,000 or more for your septic. Again, you’ll want to check on sewer tap cost and availability in areas served by a community sewer district.
Covenants – Nearly all ‘lot & block’ land carries restrictive covenants; most ‘metes & bounds’ land does not. It pays to check either way.
Horses – in order to legally have horses on your property, you must meet three criteria:
1. Zoning must allow horses/large animals
2. Subdivision covenants must not prohibit them, and
3. The well permit must allow watering for them.
As a matter of fact, many residents have horses on properties that don’t meet all these requirements, but they do so at the risk of being forced to stop.
Title Issues – I would urge you to never buy land without a current survey and title insurance. Title insurance will disclose any covenants, easements, platting setbacks or building envelopes of record, and will, of course, detail liens that need to be paid off and any other requirements to obtain sufficient title.
Taxes – Vacant land is assessed at a rate 3 times a higher than ‘improved land’ (land with a home on it), so it may seem taxes are inordinately high for land. Once you build your home and the property is reassessed, however, the rate will decrease (but the total bill will likely increase because the value of the improvements are now included).
Cost – Vacant land runs the gamut: from in-town .10 acre – .25 acre sites served by city water and sewer, to subdivisions with 1+ acres a little farther out on wells and septic systems, to large tracts and estate parcels even further out on 35 to over 100 acres, also on wells and septic systems. The cost per acre generally goes down as you buy more land and purchase further away from Crested Butte. Plan on spending a minimum of $40,000 for bare land if planning to build within 10 miles of Crested Butte.
Financing — Commercial banks as well as mortgage lenders typically provide financing for land acquisition. They generally require a 25% to 30% down payment and offer 3 to 5-year loans with interest-only or amortization with balloon payment options.
All the considerations above need to be addressed prior to closing on your purchase. If you’re unable to get all your answers before contracting to buy, you should create contract contingencies to protect yourself so you can do your due diligence.