Things to Consider When Buying Land


            We have been selling residential and commercial real estate in central Missouri since 1978. Every school that each agent has attended, and in every continued education class they have taken, all instructors have always said the three most important factors in the value of a piece of real estate are location, location, and location. As you approach a lot you are considering purchasing, look at the surrounding neighbors’ properties to make sure that your new dream home will not be the Cadillac amidst a lot full of Chevrolets.


            Restrictions are one of the most important items to review prior to purchase of a lot for your new home! Most subdivisions will have restrictions as to the size of the home, the amount of brick or stone that may be required whether or not you are allowed to have an attached garage with the doors facing the street or not. Many lots in rural area’s will have restrictions as to animals, out buildings, and junk vehicles or abandoned vehicles. Restrictions protect your property values.


            Over the life of your home, and your homeownership, you will want to be mindful of how the lot lies. Typically, a lot is more desirable if the lot is above street grade without a large hillside behind the area where you want to build. A lot above street grade will be more suited to a home with a walkout basement, whether you build a rancher, a story and a half, or a two story home. Most homeowners prefer a walkout basement with a rear yard that slopes away from the home so the home has proper drainage with a rear yard that sloped away from the home and is less likely to flood during heavy rain. It would be advisable to have your excavating contractor look at the lot with you before you purchase the lot. Also, you may wish to contact the adjoining neighbors that have built in recent months and find out how much rock they had to chip. Chipping rock and rock removal can be expensive and increase the excavating costs by thousands of dollars.


            It is important to verify before you purchase a lot what utilities are available to the property, i.e. water, sewer, electric, phone, and natural gas. In addition to verifying what utilities are available on the lot, it is important to check with the utility companies to see where the utilities are located on the lot, and the depth of the sewer line especially, so that you will have proper flow to connect your home without the cost of a grinder pump. In regards to utilities, it is important to verify the location of any and all utility easements and right of ways that may exist on the lot, so they do not have a negative effect on the placement of your home on the lot you have chosen. I f the lot is in the city limits of Jefferson City, this can be checked at Jefferson City Public Works Department. If the lot is in the county, it will be harder to verify utility location.


            It is important to note whether or not the street or drive in front of the lot you are purchasing is a private street or a public street. Many private streets in the private subdivisions have a homeowner’s association fee, which will require annual payments for the upkeep of the road. If it is a private road without a homeowner’s association, most lenders will not loan money on a private road without a road maintenance agreement.

Title Insurance

            When you purchase a lot, title insurance is like a life insurance policy on the fee simple interest in that lot for the value you have paid for the lot. In the event the title to your lot would be questioned by someone claiming to own the lot, the title insurance company will fight the legal battle for you and you are insured for the amount of the purchase price of the lot. The most important thing to remember is that once you start improvements on the lot, you will need to purchase additional title insurance to cover the cost of the improvements. If you purchase a $50,000 lot and have title insurance for that amount and you then use $300,000 of your savings to build your home, and your title is questioned, your insurance policy is still only for $50,000.

If you have any questions or want to know what is available feel free to fill out the form below or call us at (573) 635-4168!