10 things you should know when buying land for pre-construction real estate

Is the project going to be built on clear and titled land?

It has happened that certain developers begin pre-selling units when they don’t even own the land or the property has liens, encumbrances and easements. Make sure that when you buy real estate in pre-construction the developer has all of its ducks in a row and they are not simply using you to test the market. Vertical Realty Advisors makes sure to only work with time tested reputable developers.

Are there surveys?

You know the developer is on the right path when they can show you the property survey. This is particularly important if you are buying a lot for a single family home. You want to make sure that the size of the lot exactly reflects the contract and that the boundary lines are clearly displayed both on the map and at the actual lot site by markers.

What about Title Insurance?

Whether you are buying locally, nationally or internationally make it a must to always get title insurance by a reputable company. The title insurance protects you in the event that there is a problem or dispute regarding title ownership.

What are the Services and Facilities in the area?

If the pre-construction property is in a gated community, will there be garbage pick-up or do you need to dispose of it at a community facility. Will drinking water be provided by the municipality or Public Utility Company? Is the ‘local’ fire department around the corner or 30 miles away?

Does the project have any deed restrictions or covenants?

What happens if in the future you want make some renovations or an expansion to your new home – can you do that? If you are buying a lot, are there safeguards that will protect your investment? Review the policies and guidelines of your new association and make sure it’s a good fit with what you are looking for.

Financing?

Find out what incentives are offered by financing thru the developer but get other good-faith-estimates from external sources including banks and mortgage brokers. When you compare mortgage loan products make sure you take a look at all of the different factors including interest rates, points, final APRs, and closing costs including all of the small fees. Sometimes what seems to be a good deal on the front, you will be paying double the price in the back end.

Can you build on it?

Sounds like an obvious question but with there are a myriad of things that can impede you from building. Is the lot big enough to build your dream home? What are the setbacks from the boundary lines? What is the zoning? Does the area comply with the building codes to allow you to get all the building permits necessary on your pre-construction project?

Zoning Restrictions?

This will dictate what type of neighbor you will have in the surrounding area. Whether you live within the city area or remote this is an important component to any purchase.
Can your neighboring parcel build a beer factory or engage in farming? Wherever you are these things can happen and you want to make sure you are covered.

Property Taxes?

In the long run, low taxes can become a huge advantage in lowering carrying costs and making your dollar go further. Taxes can be imposed both locally and statewide. Low taxes can enhance a property’s attractiveness, demand and value. Did you know new property in Panama is exonerated from taxes for at least 15 years?

Building site include utilities?

Not every pre-construction developer will provide onsite utilities when you are buying a lot – this may be often the case particularly when you buy in foreign countries. Will the house be powered by electricity, gas, both? What about drinking water – is it from a well or a water treatment center? Is there a sewer system or will there be a septic tank? These are important factors as it they will directly impact both building and maintenance costs of your home.