Buying a lot and building a new home can be exciting, but whether one is a builder or a single homeowner below are some important items one should always discuss in advance with their REALTOR® before making an offer to purchase on a vacant lot:
(1). Is GST included in the advertised list price or is it payable and redeemable as a future tax rebate? For futher information on this topic, because Government rules and regulations change as time progresses, one should speak with a certified tax accountant to find out if their company qualifies for a GST rebate. Also, check for any additional landscaping or building deposits that may be required, and review past recent sales in the neighborhood before deciding what amount to offer.
(2). What are the lot dimensions; what is the building pocket size; has the property been surveyed; are there currently survey stakes and pins in the ground; and is a Lot Diagram or Real Property Report and Compliance available for review?
(3). What is the zoning and utility connections arrangement and has the subdivision been approved by the governing municipality? Furthermore, has there been any soil inspections or environmental assessments performed on the property?
(4). What is the zoning and future development plans of nearby or adjacent land parcels? Knowing and understanding the future neighborhood development plans for gas stations, other retail, condo or apartment complexes, churches or schools, medium or light industrial, parks, roadways, etc. is important since any combination of these will have varying levels of impacts (positive or negative) on property value.
(5). Are there any architectural, building, or other restrictions a Buyer is required to assume upon purchase? Usually these are identifiable via documents registered (caveats) on title and can be provided by one's lawyer or from the Seller upon a pending offer. It is a good idea to engage a good real estate lawyer to review any registered documents as a condition.
In summary, buying a vacant land parcel is risky and should only be undertaken with Buyer REALTOR® representation; and only be considered as an option by experienced real estate Buyers only who have direct experience with homebuilding / contracting and / or have undertaken many discussions with (and received written quotes by) one or more reputable General Contractors prior to signing the purchase contract (or inserted as a Buyer condition) for a vacant land parcel.
[Article written and ©2009, ©2020 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at MaxWell POLARIS in Edmonton, AB]
Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you will be selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to SOLD@KellyGrant.ca to schedule a confidential appointment.
