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10 Land Buying Questions to Help You Vet a Parcel

Published: Jul 13th, 2017

Searching for land to build a new home is exciting. However, buyers should be aware that purchasing raw land will require extensive due diligence. Do you know the right land buying questions to ask?

You should know that most sellers won’t have all the answers, so the onus is on you, the buyer, to investigate the issues thoroughly until you’re confident in the purchase.

Here are ten questions to help vet the future site of your dream home.

Land Buying Questions

1. Are the boundaries clearly and accurately marked on site?

Ideally, corners of the property lines should be marked on the site. These are usually tall concrete spots, steel in concrete, sticks or flags that can easily be seen from a distance. In an urban area, the boundaries are more easily discernible with neighbouring structures. However, be aware that some existing structures may be encroaching onto the property in questions and a survey will show if this is the case.

2. Are there any Covenants, Conditions & Restrictions (CC&R’s)?

Covenants, conditions, and restrictions – also called CC&R’s – are used by many “common interest” developments to regulate the use, appearance, and maintenance of property. CC&R’s, most commonly drafted and enforced through homeowners’ associations (HOAs), often restrict what the property owner can do on the property.

For example in Nairobi Karen, there are areas you cannot subdivide the land beyond 1/acre parcels, so if you get offers to buy 1/4ac in Karen one would need to be very careful on the validity of the offer.

Then there are the upcoming golfing estates in Naivasha Kenya where one is restricted to specific housing units for uniformity. The downside is that the aesthetic prescribed in the CC&R’s may conflict with yours. So it’s prudent to be clear on the exact type of house permitted in the development.

3. Is the title to the property clear (free of liens, easements, and other encumbrances)?

Property with a clear title is “worry-free” and far more attractive than property which is encumbered by liens, taxes, or easements. A title company will help you determine this and often the seller has already engaged with a title company, which brings us to the next question.

4. Do you have a preliminary official search report from the lands ministry?

. A preliminary title report lists – before you buy a lot – ownership, title defects, liens and encumbrances. The report may then be reviewed and discussed by the parties to a real estate transaction and their agents as part of the buyer’s due diligence.

This is very essential so as to confirm if there are any limiting factors on the tittle to the sale process.

5. What utilities are available in the area?

Providing utility infrastructure to a site is a significant expense, so it is important to know what is existing and what you will need to provide. There are five main utilities to make sure you understand before removing contingencies during escrow. You will want to know about the following:

  • Power – This could be overhead or underground. Talk to your local power company –and ask how about the process of bringing power to a new home on this site. Even though power lines may be nearby, there is still time required for the power company to survey the site and make the connection.
  • Telecom – Find out what your options are for phone, cell phone, cable or satellite television, and high-speed internet.
  • Water – This may come from a well or from a local water company. Note that installing a water meter is costly, so ask if there is a water meter installed.
  • Sewer – Waste has to go somewhere, so it will either connect to an existing sewer line or a septic system. If there is no municipal sewer line available, you will need to have a septic layout designed. This will involve drilling holes in the ground and a percolation test to determine the absorption rate of soil for a septic drain field or “leach field”.
  • Another consideration is how far from the future home site the existing utility sources are located. Trenching lines long distances will add significant expense to your project.

6. What are the current taxes on the property?

  • The seller should know this, but if there is any question, refer to the preliminary search title report. It will also tell you the status of property tax payments and the most recent tax on the property. Understanding the annual tax amount will be essential in understanding your on-going holding costs.

7. Do you have a topographic survey or grading plan?

  • Sometimes sellers have gone through the process of hiring a civil engineer to create a grading plan, which is a site plan that shows how the existing topography can be manipulated to create a driveway to a future building pad. This will help you evaluate what it will take to develop a site. Grading costs can run into millions depending on the size of land, so the less you have to do, the more you can spend on your home.
  • This is very essential also because of draining storm water that may build in areas that have black cotton soil eg. Kitengela area of Kajiado County Kenya which is very popular for purchase of plots and also Karen Nairobi area which has pockets of black cotton soil.

8. Do you have a soils report?

  • In certain areas, the local jurisdiction having authority of building permits will require a soils report. A soils report – sometimes referred to as a geotechnical report – gives you an understanding of earth conditions. It will guide a structural engineer in designing a home’s foundation. Lots with expansive soils, low strength soils, on steep slopes, or on fill often times require a soils report. If you have a flat lot with good soils, then this report may not be necessary.

9. What is the property’s zoning?

  • Every property is assigned a zoning type. The lot may be zoned for residential or commercial. If it’s residential, you may be limited to a single home – sometimes called dwelling units – or be allowed to build multiple units. Zoning will also tell you other restrictions like how tall a building may be on the lot and how close you can build to a property line. Talk to your local planning department to determine the property’s zoning if the seller does not know.

10. Are there any other offers on this lot?

  • You need to know if you are competing with another buyer. Raw land tends to stay on the market longer than a home, because there are fewer buyers willing to go through the process of building a new home. If there is another offer in on the lot and you really want it, you will need to bring your best and highest offer.
  • The one good thing about land is that they aren’t making any more of it. If you hold on to it long enough you will see its value appreciate.
  • Did we miss anything?
  • There are so many issues to investigate; we’d love to hear your thoughts. Add your land buying questions in the comments below, or visit us on www.canaanproperties.co.ke