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The decision has been made to buy a new construction home or perhaps to buy a lot and have a custom home built on it. This is not the only decision that comes with these types of property purchases. There are many more responsibilities that need attending to. One of the most important ones is going to be concerning the lot itself.
Buying A Home In A Subdivision
For those who have opted into buying a home in a subdivision then their purchase is also going to include the lot on which the home resides. The asking price is going to include the cost of the lot. The buyer needs to know if they are a lot premium and if so what makes this a premium lot.
What Justifies The Lot Premiums?
Of course, the lot is going to be important to the new homeowner. When buying in a subdivision there can be some variations in the lots where the builder will add a lot premium for the extras. Each builder is different when it comes to their pricing. Some may add extras to the lot that are included in the price. Whereas others will charge a premium for each extra. These can include:
Upgrades in landscaping. The basic landscaping such as the laying of sod may be included in the regular price. However, for those that want additions such as trees or a paved driveway, this may be considered to be a premium which will be presented as a premium lot price.
The Size: Another justification for the builders when charging a premium may be the size of the lot. This could be applicable to a corner lot. Or, the subdivision may also include luxury homes that are situated on bigger lots.
The Location: Some of the lots may not be only situated on a corner but may be on the last road so the lot is backing onto a natural area. The builder may charge more for these lots indicating they have an advantage when it comes to the view.
Is The Increased Cost Worth It?
If the builder is offering premium lots then the buyer has to determine how much difference there is in the price and is the increase worth it. When it comes to landscaping some new buyers feel that they want to put their own personal touches to the property which they can do with their own landscaping preferences. If they are paying extra for trees there is nothing to say that they will survive and if they don’t then they will need to be replaced usually at the owner’s expense. Also, there may not be any choices as to what types of trees are going to be used. In this instance, the new home buyer may be further ahead not to pay for this type of premium.
The lot size may be a different story. Every homeowner wants as much outdoor space as possible. It may be worth paying a premium for this. But only after determining what extra amount of space is being offered compared to the non-premium lots. If there is only a few feet difference then does this justify the difference in price.
For those who are contemplating paying a premium based on the view, this again requires some further research. If the property is backing onto a natural area what guarantees are there that this won’t change in the future?
Buying A Lot For A Custom Home
For those who have decided to buy a lot for the purposes of having a custom home build on it there are a lot of things to consider.
The buyer needs to know for sure that the property has been zoned for residential use. Otherwise, they will not get the necessary permits for the house build. It is also important to know what the other property surrounding this is zoned for. It may be for commercial or industrial use, and this may not be suitable for the person who is going to have a house built in this vicinity.
For those who are buying a lot for a new home build that may be in an unbuilt area, they really need to do their research as to what may be planned for the area in the future. Looking at what amenities are currently present is a starting point, but also what is being planned for the future is going to be important. Quite often when the buyer is setting a price on the lot they will class it as a premium lot because of what is going to take place in the future. The potential buyer needs to confirm this.
Sometimes there are builders who have bought up a large parcel of land and then segregated it into lots that can be purchase without the home. The individual who is going to have a home built on one of these needs to determine if there are any covenants that are going to be applicable to this unfinished subdivision. These could have a dramatic impact on what the homeowner is allowed to do with their property.
Another important component of the lot is its ability to drain water from it. Also, to be sure that it is not classified as being in a flood zone. This could cause a lot of problems in the future as well as make it difficult to get insurance.
Another thing to be determined when buying a lot is there the option for bringing in your own builder to construct the home. Or is the home building only to be done by the builder who is selling the lots? If this is the case then it changes the process of having a custom home built.
When a buyer of multiple lots is offering them for sale and have attached a premium to them, the buyer must be sure that the seller can justify this. Each buyer has to determine their wants and needs and whether they are willing to pay extra for these.
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