Dream that country dreamhome

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Finding that perfect piece of property to build your dream home on isn’t always effortless. It’s easy to get lost in beautiful views or the perfect location and not take the time to research some of the other essential characteristics of the property. There will always be some things that you will discover along the journey of building that will require extra cost or consideration, as each property has its individual challenges and unique features. 

Understanding that there will be compromises is vital, which you need to consider carefully before purchasing the property you love. Almost everything that will have to be done to the property will have an associated cost tied to it. Doing your due diligence and homework on the property before solidifying the deal. The more areas that require spending due to the site, the bigger the impact will be on the money you have left for the building of your house.

The best way to avoid costly surprises when buying land is by knowing what to look for.  In addition to the areas we will cover here, you need to ask yourself (specifically in relation to the land you are considering):

“What could be extra costs associated with this property?”  It’s also worthwhile to have your builder look at the land you are considering, prior to your purchase.

1. Pick a trustworthy team 

That includes a builder, an architect and/or a contractor. Step one for you should be gathering the right people to help navigate you through this process. Once you’ve chosen your team, you now have resources to ask questions to or run things by as you go through the building process. Invite your builder and architect to take a look at the site before buying to help answer any questions and provide their professional opinions to you. It makes a huge difference to have smart, trustworthy people to turn to!

2. Be pre-approved for a land loan

Have a land loan pre-approval letter ready (unless you are paying cash) so that if the perfect lot in your budget comes up, you can be ready. Great deals can go quickly on land.  Plan ahead and research your financing options. Sometimes, throughout the course of this process: a land loan (to buy the land) which will roll into a construction loan (to build the house) which will then roll into a permanent loan (which is like a regular mortgage on a house) is necessary. Reach out to multiple local lenders to find out their terms for each of the three loans to make sure that, as you process through each stage of the financing, you know what to expect. 

3. Town planning and overlays

Will local regulations allow you to build your dream home? One of the most important things to do after finding the property is to ensure that there is a good site to build a house. Would you have to do a lot of site work to put the house where you want it? What is the slope of the property like?  Is there enough slope to build the style of building you want? 

While no property is likely to be completely flat, there can be considerable extra costs associated with building on a slope. Would you have to spend a lot of money grading the land and taking out trees? Is there a good place to put a driveway?

There will be setbacks that need to be considered for both township planning and building codes, and these may vary, so make sure you are aware of them both before you break ground.

Ensure you get the correct information as it can vary between townships and sometimes even planners.  It is best to get the answers to your questions in writing if possible. Overlays can have a major impact on where, what, and if you can build on a property.  They can also influence the costs associated with it. For this reason, they should be one of the first things you factor into your decision on whether or not to buy a property, as they can be some of the most costly to comply with.

You can start by calling the planning department of the local area you’re looking to buy in, and discuss the overlays on the land you are considering. (For the Guelph and surrounding area this is a great place to start: https://www.grandriver.ca/en/Planning-Development/Planning-and-Development.aspx)

4. Ensure the zoning classification permits what you’re planning to build/develop. 

Most local jurisdictions (http://guelph.ca/city-hall/planning-and-development/how-to-develop-property/) have a zoning map which sets forth what each piece of land can be in terms of use- rural, single-family, commercial, etc. Do your research and get a letter from your jurisdiction confirming what your zoning designation is. It is important to know what the use (agricultural, residential), setback lines and permitted accessory uses (farming, live animals) are.  

5. Make sure all utilities are available at the property. 

It is important to ensure that hydro, water, septic, gas and internet are all options for the property. 

Have you thought about:

Hydro – Consider when you want to have power up and running.  Visit https://www.guelphhydro.com/en/billing-payments-and-moves/start-stop-move-service.aspx for some helpful tips and easy assistance.

  • Should it be accessible for the build or will your contractor use a generator for power in the beginning?
  • If you plan on using power for the construction phase, then you should call your local hydro company 2-3 months in advance to schedule their service and ensure that there are no delays.
  • If you choose to use a generator, make sure to get one that can handle multiple power tools and consider the noise.

Water – Does the location of the property allow for municipal water hookup or does it require you to drill a well?  Some things to consider before drilling a well:

  • The well must be a minimum distance for any nearby sewage systems and other existing sources of contaminants 
  • The well must be at a higher elevation than the immediate surrounding area
  • The well must be accessible for maintenance
  • Hire a licensed well contractor to build or maintain the well.  This way you ensure all legal requirements of the wells regulation are being met.
  • Licensed contractors are required to use licensed well technicians, of the proper class of licence, to conduct or supervise any work being done on your well.

If you won’t be drilling a well for water, you will need to call your local water/utility company to find out what the requirements are for water.

Septic/Sewer – Septic systems are underground wastewater treatment structures, commonly used in rural areas without centralized sewer systems. They use a combination of nature and proven technology to treat wastewater from household plumbing produced by bathrooms, kitchen drains, and laundry. A sewer system is an underground carriage system specifically for transporting sewage from houses and commercial buildings through pipes to treatment facilities or disposal. 

For more information on septic systems visit http://talk.trilliumwest.com/2015/04/06/so-you-want-to-move-to-the-country-chapter-2-the-basics-of-septic/ 

  • If you’re building in the country, you will likely need a septic system.  
  • Something to consider when planning on septic placement is where the machinery will be driving mostly during the build phase.  If it is out of the way, then it may be worth having the excavator dig it early in the construction phase while digging out the foundation to save money 
  • Think about if you are putting in a pool or decorative pond as they will not work in close proximity

Natural Gas vs Propane – is gas available for that beautiful piece of property in the middle of nowhere?  Perhaps not, so propane is an alternate option.  But where are you going to keep that ugly green tank?? Remember this when you are planning.  Where are you going to put/hide it? Call around to all of the local companies to confirm information and have them come out to the property to take a look and determine an estimate in cost for each process.  Remember that the further away from power poles, boxes or main service lines, the more expensive this gets.  Connection fees can vary, so it’s essential to know what you require and get estimates of costs for the particular property.

6. Easements, Covenants or Restrictions.

You will need to carefully study the title and plan of the property to know if any easements, covenants or restrictions affect the property. There have been situations where people have purchased land and then found out they couldn’t build where planned due to restrictions or easements.  It is important to establish if there are any that apply to your land and if they are going to affect what you want to do.

If you have an easement it may be a burden or a benefit to you. Generally, you are not able to build over an easement.

You may require an easement on an adjacent property for achieving drainage or legal point of discharge; in this case, it is essential to find out if the owner will agree to this and to get an agreement signed. If they don’t agree, you need to know your options and what costs may be associated with these. Have a lawyer conduct a title examination. If you’ve got a closing attorney, they’ll handle the title search for you. An examiner will review the chain of title searching for any “hits” against the property that are current, such as liens, other mortgages, encumbrances, easements, etc. The title search will show you if any liens need to be released or if you’ll be purchasing the property subject to any permissible encumbrances such as a right-of-way easement for a road or a power easement.

7. Conduct a soil test. 

It’s very important to hire a professional to conduct an examination of the soil to determine if it’s able to house a septic system. Most counties will require evidence of this test and proof that the soil passes all the right tests before they issue a building or development permit.  A septic system or connecting to city sewer is definitely something to look into before you buy.  Get a quote on how much it will cost to put this service in.  If you need a specialized septic system costs can be a lot more.  

Something else to remember when looking into the soil is the amount of rock.  Although many properties have rock of some sort, it is worth finding out what is in the local area, (e.g. if the rock is generally large or small, and the type of stone and rock found). Some types of rock are easy to excavate, while others can prove difficult to remove that may add considerably to the cost of preparing the land for building. 

8. Obtain a recent survey of the property. 

A survey basically lays out the exact property lines bordering the land. This helps you to determine exactly what you are buying and whether or not there are any encroachments. If your Seller doesn’t have a recent survey to share with you, it’s worth the few hundred dollars to obtain one yourself from a surveyor.

9. Before you buy land – research the area!

You may go looking for property in the summer when you have time off work, or in spring when everything is beautiful and blooming, but keep in mind that while everything may seem beautiful at one time of the year, it can be different during another. Research the area you’re planning on moving to, and find out how cold it gets in winter, how hot in summer, what the average rainfall is etc. This is especially relevant when you are moving to a different district. You might be moving from the city to the country for a tree change, and a quiet remote area might be exactly what you’re looking for, however, positives and negatives for you personally should be considered.

  • How far is the nearest hospital or doctor?
  • How far to schools and work place?  
  • How long will it take to get to a supermarket to buy your weekly groceries?
  • Confirm with the local school system which school district the property is in. https://www.findmyschool.ca With children or the possibility of them in the future schools should be a consideration before you purchase the property.  

10. Last but not least, stick to your budget! 

It’s really important to be smart and realize how much you can afford and not be swayed too far over that. Be wise and stick to your budget.  

Request an appraiser to conduct an appraisal of the property. Unless you’ve got a Realtor® working for you who can verify the value of the property with certainty. Make sure your money is going towards a great investment!

I’ve said a lot about the due diligence process and how to handle it… what insight do you have about buying vacant land or property? Share your tips!

Nicole Davidson

About Nicole Davidson