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What to Consider When Making an Offer on Vacant Land

by Steve Lander

Buying vacant land is different from buying property that has already been improved with a house. When you buy an improved property, the simple fact that it has a house on it proves that it's buildable. You can't make this assumption with vacant land, though. In addition to needing to ensure that you can build on it, you also want to make sure that it has the zoning, rights and services to allow you to use it the way that you want.

Soil Condition

A parcel of land is only buildable if the actual soil can support the weight of a building as confirmed by a soil compaction test. Furthermore, it's important to ensure not just that your parcel is buildable but that the actual area where you want to put your home is suitable. Further, if you will need to install a septic system, the soil will also need to have adequate ability to absorb water. You can verify this by doing a percolation or "perc" test.

Zoning

The local city or county defines what you can do with a parcel of land. Before making an offer on the property and closing on the transaction, it's important to ensure that its zoning will allow you to do what you want. The zoning code can also define how far you need to build from the property line, how tall your house can be, and other factors.

Access to Necessities

The value and utility of a piece of vacant land is closely tied to its access to necessary services such as utilities and roads. Some parcels of land have utilities built right to their edges, making it very easy to connect them to necessary services. Many of them already have ingress and egress rights, giving them direct access to a public road. Others don't have adjacent utilities and may be landlocked, requiring access over another parcel to get to a road. These parcels can be very expensive to develop, since you could need to negotiate an easement to cross another parcel to get access to a road as well as needing to have utilities brought to your site.

Contract Issues

When you write a purchase agreement on a piece of vacant land, your contract should include inspection contingencies to allow you to verify the suitability of the land. Soil and perc testing, in particular, can require you to dig into the land, so you will need the seller's express permission to allow you to do this. You will also need enough time to complete all of your inspections before you close on the property.

About the Author

Steve Lander has been a writer since 1996, with experience in the fields of financial services, real estate and technology. His work has appeared in trade publications such as the "Minnesota Real Estate Journal" and "Minnesota Multi-Housing Association Advocate." Lander holds a Bachelor of Arts in political science from Columbia University.

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