To land the right site, do a lot of homework

Home: Before you start planning a new house on an open property, make sure you understand the numerous fine points of the process.

September 03, 2000|By Adele Evans | Adele Evans,SPECIAL TO THE SUN

Karen and Bill Ludwig thought they knew what they were getting into when they decided to purchase the perfect lot to build the perfect house in Parkton.

They inspected the 8 acres. They walked the grounds and questioned the seller about possible problems. They studied tax maps and made sure the land would support a septic system.

When their builder applied to Baltimore County for the building permit last spring, it was discovered that part of the lot was within a 100-year flood plain, and the issue brought the building process to a screeching, expensive halt.

Part of the flood plain lay where the Ludwigs planned their driveway. That necessitated special grading of the land to protect the driveway, and it required a formal plan by a soils engineer. A special grading permit then had to be issued by the Maryland Department of the Environment. Only after state approval would Baltimore County allow construction.

"Ours was the last lot in the subdivision. Now I know why," Karen said. "Why us?"

Most new-home buyers find their lots through a builder who has already developed a piece of land into a subdivision. There are other buyers, however, who enjoy the hunt of being able to find that special parcel - an acre or two that no one else knows about - and securing it for their home. But purchasing a raw piece of land to build a home can be daunting task. How do you look for land? Is it buildable? What is its value? What is the process that precedes building?

Though the Ludwigs' troubles are nearing an end, their $125,000 dream lot wound up costing them about $140,000. To that, add $20,000 in closing costs for their construction loan, a $10,000 down payment to the builder and more than $10,000 for state and county permits. The Ludwigs had a lot of cash tied up in the project.

The moral of the story is that great-looking land can come with great problems if the buyer isn't properly educated.

Flooding can be just one problem.

Others include:

A basic weakness in the soil that makes the lot unable to sustain the home's weight.

Setback restrictions.

Building restriction lines, streams and buffers.

Hostile neighbors.

Community association restrictions.

Controls on which builders are allowed to build within a subdivision.

That's why builders, developers and real estate agents say the first hurdle in the land game is the land itself.

Perhaps the biggest land-related issue, for those properties not serviced by public utilities, is water. Can you get enough water out of the ground? If there's no water, there's no house.

Water yield must be tested for all new wells.

The state has set a yield rate of one gallon per minute on new residential wells. This means that after the well's reservoir - or water standing in the well shaft - is drawn down by a licensed contractor, the well must pump a gallon a minute for six hours. This indicates that water is replenishing itself from fissures in the area at that rate. In addition, new wells (not drawn down) must be able to deliver at least 500 gallons over two hours.

Then comes septic. Before installation of a septic system, a county-certified soil percolation, or "perc test," is also required. This shows the ability of the soil to absorb liquid wastes.

Almost all of the homes that Pat Hagan, principal of Hagan & Hamilton custom homes, builds each year are on private well-and-septic systems. Some sellers make it the buyer's responsibility to drill the well, which can cost up to $5,000. Hagan and others say this is risky for the buyer, because some land doesn't have enough water - or it might take two or three tries to hit water.

"It's more prudent to buy with the well established, or make it the seller's responsibility to drill," Hagan said.

Time to investigate

As a safeguard against property flaws, when Chris Crampton, a land specialist with Long & Foster Real Estate Inc., signs a contract for a lot that's not in a developer's subdivision, he includes a "feasibility contingency clause." This gives the buyer a specific amount of time to investigate and check with county officials for potential problems. Sometimes even that isn't enough.

The Ludwigs had 30 days to check things out, and they knew about the flood plain from county paperwork. Even so, Karen said, they didn't recognize the ramifications of being within a flood plain until Hagan, their builder, went to secure the building permit.

Despite risks, some developers purchase distressed lots - lots that won't perc - or lots that need special grading or backfill work. Developers don't recommend such a strategy to the average consumer. Going straight to the farmer who owns the land is dangerous.

"We can walk in and estimate our costs to finish the job. The average person can't go in blind," said Harford County-based custom home builder Dave Thomas of TDT Construction.

Consumers also should be wary of when a parcel was subdivided.

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