Tips for Buying Acreage/Vacant Land in Michigan
What should you consider when you are buying land?
Buying vacant land is similar to buying a house. You should always consider location, location, location.
Once you have made the decision where you would like to purchase property, you should consider asking the following questions:
Is electricity available?
Verify electricity is available for the property you are interested in purchasing. In some cases, you maybe responsible for paying the electric company to run power lines to your property - which can be expensive.
Do I have to pay for the electric company to bring power to my land?
Each community and each power company have various policies regarding who pays for bringing power to your property. Ask your sales representative for details and/or call the power company to verify the costs associated.
Is water and sewer service available?
Depending on where your property is located, water and sewer services will vary. Property located in rural settings (outside of city areas), you will most likely need to have a well dug for your water and also have a septic tank installed for sewer service. Both the well and septic tank are usually installed included in the price a builder will quote you when you are ready to build your home.
For property located closer to city limits, the local government has installed water and sewer lines for the homeowners conveniences. Usually, the new homeowner is responsible for the connection costs associated with building a new home. Again, your builder can answer any details involved with setting up service.
Do I have to build within any particular time frame?
Some communities require you to build within a certain time frame. Be sure and verify with the sales associate if there is a time limit on when you will have to build.
Are all lots legally platted?
All property in the U.S. is platted and recorded in the county records where the property is located. Legally platted property insure each land owner of the boundaries of the land he/she owns.
Who maintains the roads?
If you are purchasing land where the roads are not paved, be sure and ask your sales representative who is responsible for the maintenance of the road. When developers divide the land and plat each lot, they also build the roads. In some cases, the roads maybe private roads and the cost to keep the roads in good condition will be the responsibility of the landowners. This could obliviously increase the associated costs of owning the land. Most developers and communities deed the roads to the local government and the city or county provides the maintenance. The local government then absorbs the cost of the maintenance.
Things to consider when looking to purchase land:
- Does the property perk? (Very Important)
- What utilities service the land?
- Determine the status on mineral rights.
- Check with the local planning board to determine what type of development is planned in the area.
- If public water and sewer is available, how much are the riser and benefit fees? (Check with County Health Dept.)
- Check with the local building and zoning department to determine the permits required, restrictions, set backs, minimum square footage, minimum frontage and lot size.
- Determine if there are oil or gas leases on the property.
- Make sure the proper legal forms are used to purchase the land. Consult with a real estate professional on using the Purchase Agreement, Disclosure Statement, Michigan Land Division Act Addendum, etc.
Things to consider when selling land:
- What is the market value?
- What is the current zoning and master plan zoning?
- What encroachments and/or easements are now on the property?
- Where will buyers be coming from?
- Does the property perk?
- How deep are the water wells in the area?
- What are the building and use restrictions on the land?
- How can I maximize value?
Things to consider when preparing your land for sale:
- Ordering Title work
- Getting the Survey in place
- Zoning, minimum and maximum requirements
- Michigan Land Division Act Addendum
- Getting the Purchase and Sale Agreement ready
- Deed Preparations
- Closing and Escrow company
- Proper Pricing! Sales v. Competition
- What Financing is available
- The Liability of Contingent Sale
- Flood Zone and Wetlands issues
- How to handle calls in a proper manner
- Marketing your property effectively
- Who are you Marketing the land to
Things to consider for building on a lot:
- Has the home been designed with the soil limitations in mind?
- Have adjacent drainage ways, creeks, or rivers been analyzed for flooding?
- Before construction of a home on a lot in which there are no sanitary sewers, fence off area where septic absorption field will be located. Permit no traffic on this area.
- If there is an existing septic tank, have you inspected it to ensure its durability?
- For any trees that are to be saved, fence the tree(s) out to protect the root system from compaction damage from any equipment.
- Install a stone base for the driveway before starting construction and instruct all deliveries to be made only using the driveway.
- Is there a plan to control erosion during and following the construction phase?
- What are the conditions of the drainage along the public road?
When you do not have city sewer you need a septic field. You generally do not install a septic field until your land has passed a perk test by the health department. Do not purchase the land on an old perk test unless you have a written statement from the health department in the county you're purchasing in, that the old perk test is valid. Many times the old perk test is out of date because of new laws and it is then invalid. At which point there would need to be a new perk test done. The normal cost on a perk test is about $150 for the county to do their part and an additional $300 or so to get a proper back hoe to the site for the test. On occasion, a hand auger is sufficient to properly analyze the soil types. Most perk tests are valid for a year only.
If the property cannot pass a perk test then your next option is to install an engineered field ( if the county allows it). The problem with an engineered field is the cost. If you do not need an engineered field the normal cost is between $3,000 to $4,000. A reasonable rule of thumb to add to this figure if you need to go to an engineered field is $1,000 for each extra foot you have to go down. To spend a total of $20,000 for an engineered field is somewhat common.
One problem you run across with a septic field is where to put it in relationship to the house location. Make sure your lot is going to be big enough to hold both the size of house you want to build and the septic field also. Just because a certain part of the lot perks does not mean all of the property perks. You have to have a spot perk where you want to put the septic field.
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