Plus, learn how to spot red flags that a seller may be a scammer before you buy land for building a home.
One of the most exciting parts of buying land for a new home is exploring the possibilities. What will the house look like? How will it be positioned on the property? How will the yard be used? Before you commit to buying a piece of land, you need to be aware of potential problems; some can be overcome but others are a sign to keep looking. Here are five common land problems, plus red flags that the seller might actually be a scammer.
Drainage problems with the land
If you notice soft, spongy land or standing water beware for several reasons.
First, correcting a drainage problem may be costly or even impossible. Furthermore, if you buy the property and divert water flow, you could open yourself up to a legal dispute with neighbors. (Read up on neighbor disputes over water damage from Nolo.)
Another reason to be cautious of mushy land is that the property might be considered a wetland where building is restricted or may require special permits.
Can the soil support a septic system?
If the property isn’t served by a municipal sewer system, the soil needs to percolate—meaning it allows liquid to permeate the ground—in order for a septic system to work. If the land doesn’t percolate, it’s not suitable for building a home.
The opposite situation, soil that’s too permeable, can also make land unsuitable for a septic system because liquids move through the soil too quickly for effective filtering.
Many land buyers make their purchase agreement contingent on an acceptable septic feasibility test.
Bare soil where nothing grows
Nature is abundant and plants will sprout just about everywhere; bare soil is a reason to ask questions. Was there a chemical spill? Did a previous owner over-use herbicides? Was the property previously used for a gas station or manufacturing shop? If nothing is growing on the land, do a soil test to find out why.
Remnants of old structures
Excavation for a new home is quickly complicated if there’s a foundation from a previous building on the land. Either the old foundation will have to be removed, or the new build will have to be located elsewhere on the property.
Abandoned wells pose a different type of problem: a threat to water quality and the safety of people and animals. An unused, open well can allow contaminants on the ground to flow directly into the groundwater. If the opening is large enough, people, pets and farm animals can be injured if they fall in. In Michigan, there are over 2 million unplugged wells. Before using the land an abandoned well should be plugged. The Michigan Drinking Water and Environmental Health Division recommends hiring a registered well driller with specialized training and equipment to plug abandoned wells.
If you purchase land remnants of old structures, budget for removal and or remediation.
Hills and gullies
Inclines and slopes add visual interest, but they can make things more difficult for a homeowner. For example:
- Sloping land can make mowing challenging and even unsafe
- It’s hard to establish turf and other plants on hills and gullies
- A steep driveway can be frightful in winter conditions
Consider the contours of the land and how it will affect your use of the property.
Red flags the seller may be a scammer
Take the same precautions when buying land as you would with any purchase. Specifically, be skeptical if you see these red flags from a seller:
- Rushing a deal
- A too-good-to-be true low price
- Willingness to take a significantly lower price if paid in cash
- Refusal to meet or sign contracts in person
Any of the above could be a sign of major problems with the land or a real estate scam where a fraudster tries to sell property they don’t own.
When you find the right land
Take your time when searching for land for your new home so you can avoid the problems described above. When you do locate the perfect site, turn to Consumers for a home building loan. Unlike other lenders, we have a one-time closing process which means less paperwork to sign and fewer fees.
All loans subject to approval. Rates, terms, and conditions are subject to change may vary based on credit worthiness, qualifications, and collateral conditions. Federally insured by NCUA