This blog is part two in a four part series about purchasing raw land.
After going under contract for raw land, you have what’s called a due diligence period. This is the time frame for the buyer to do whatever tests they want to do on the property. Here’s what we did in this order:
- Brought our builder out and printed a sample plan and sample exterior elevation. We walked the lot and tried to determine the best location.
- Contacted the city to get the setback information for the property and minimum sq. ft. requirements.
- Contacted an engineering firm to drill multiple borings on the property in order to see what kind of soil exists. With waterfront property, “muck” is something you have to be careful about and knowing the type of soil underneath the surface is super important.
- Contacted a surveyor to get a topographical survey that also included a wetland delineation line and high water line marked on the survey.
- Contacted a biological engineer to establish the wetland delineation line.
- Contacted a company that does wetland mitigation to obtain costs in case it was needed.
- Provided a draft site plan to the city.
- Contacted multiple septic companies when it looked like a septic wouldn’t fit on the property.
- Simultaneous to all of the above, we worked with our lender to get approved for a loan, and had an appraisal done.
Initially our due diligence time frame was 45 days but I ended up requesting a 15 day extension and realized that 60 days is really the minimum that should be on any property that has known challenges. Even though there are many homes surrounding the property on the same street, this lot has a corner water view, mangrove estuary and setback requirements that make building a challenge. The house needed to be narrow, but also have enough room to install a septic. Once the survey was done with the wetlands noted, and our builder had situated the property on a draft site plan, we ran into a big issue — we had no idea where to place a septic system. With only a few days left in our due diligence time frame, the extension was necessary.
I’m sure we’ll run into new hurdles once we enter the permitting phase. In the next post I’ll share what two of my clients who purchased vacant land earlier this year are going through now that they are in the building process. These two buyers honestly motivated us to take the leap and chase after this dream. You have to begin somewhere…