The price of the land is one thing to keep in mind for a budget…but if any of the factors listed below are seriously deficient it can add dramatically to the cost of building…or maybe even deem the site unbuildable.

 

After that fateful day in Whole Foods Market a few years ago where The Kim and I perused our first Dwell Magazine we got hooked on the idea of finding some land to build a cool modern house on.

It all started out so harmlessly. I went to the MLS website to the residential land listings and started to browse. I had no idea what I was really looking at or for…I just knew that I was looking for something within our budget which was “as cheap as possible”, whatever that meant!!

I saw a lot of listings in Los Angeles County some as cheap as twelve thousand for what looked like a nice piece of land. I printed out the listings that I thought looked good from as far east as Glendale all the way out to Malibu area over the Ventura County line. As I looked it seemed that there was a great number of promising pieces of land.

On my way out of work that evening I grabbed a pile of listings and hit the road to go have a look at some of this land. After that first day I realized that it was going to be a little tougher than I thought.

The first piece I went to look at was in the hills of Malibu…I think it was about 3 acres for about 250k. At this point I didn’t even call the realtor listing the land before I went…I figured I’d just drive out and see if I could locate the land…the listing had a pretty good description of the location and it had a good picture as well so I figured it wouldn’t be too hard to find.

When I arrived to the described location I could see the realtors sign on a hairpin turn so I figured the entrance to the parcel would be near. Well, I drove around for a few minutes and then I realized that the beautiful peaceful piece of land I saw in the ad was really just a little island of land in between the hairpin turn that wound up and around the side of the mountain. That 3 acre lot was also almost completely vertical…hmm…might be hard to get a prefab on that…not to mention that the entrance to a future house would almost inevitably have to be on the hairpin turn.

The next piece I looked at was on Topanga Canyon road. That piece was about a quarter of an acre for around 200k…big difference in price from the last one which was 3 acres for 250k. Why the price difference? This one was on a sewer, had water and power and because people can sell their land for whatever they want!!

I could see the realtor’s sign right on a nice empty corner lot. The lot was clearly marked with stakes on its boundaries and it had a nice flat looking pad on the top of the piece. It was raining that day but I decided to get out and climb up to the flat area to check out the view. On the way up I noticed that the dirt seem very spongy and I mean super spongy…like nothing I’ve every experienced before. This must have been an illegally graded pad that was made with some fill. Definitely some geology problems there.

Another piece I went to look at that was really inexpensive turned out to be impossible to get to. It was land locked because there were no recorded easements to cross other peoples land to get to it. Not to mention that all of the lots in the area were on a very steep hill that looked near impossible to build on even if you could get to it.

Within a few weeks I realized that there were a lot of factors that go into picking the right piece of land. Price alone means nothing for buying land to build on. The price of the land is one thing to keep in mind for a budget…but if any of the factors listed below are seriously deficient it can add dramatically to the cost of building…or maybe even deem the site unbuildable.

Now that I’ve gotten through most of these hurdles, looking back I think some of the best advice I could give is to find an architect whose expertise is building in the area that you are looking in. They should be able to clue you into factors about the land that you might not be properly considering. Another good idea would be to find realtor in the area that you trust.

Factors to consider:

  • Any Flat areas? – Most of the less expensive land that I looked at was very steep hillside stuff. From everything that I’ve learned, the steeper it is the more money it’s going to be to build there. The costs for everything from testing your geology, engineering for caissons and retaining walls and just the plain logistics of getting man and equipment power on the site to do all the site work required will go up exponentially.
     
  • Stability – Even though a site may look nice and flat or a hillside may look stable you never know what’s lurking underneath until you hire a geologist. When I was looking for land a handful of realtors I talked to were less than forthcoming about the geology of the property they were selling. It is really incumbent upon you the buyer to do the investigating during escrow before purchasing the land. This means spending money to hire a geologist to check out the land in question so you know what the geology is before you buy it. This came as shock to me because it meant spending a few thousand dollars to check the geology on some land that I might not even buy!
     
  • Utilities – Is there a public water main nearby? What about the nearest power? How about a public sewer system? Gas? Cable? All of these factors really start impacting the over all cost of the land. Installing a septic system or a well can get expensive really fast. Due to the fact that both of those require a lot of drilling…if your land is filled with large swaths of volcanic rock just underneath the surface you could end up spending tens of thousands of dollars just trying to get some test holes drilled without the rock stopping you dead in your tracks…and that’s just for the holes…add the equipment and labor for designing and installing septic systems and wells and you could be easily in the 20k to 50k for each.
     
  • Access – Can you get to the land your looking at? If you have to cross other peoples property to get to it are there recorded easements? I’ve found that most people aren’t too fond of letting others use part of their property for free…if at all. This could result in hiring a real estate attorney to figure out this stuff while you’re in escrow…potentially more money spent on a piece of land you might not buy!
     

    Is that parcel far from a main road? Depending on the county you are in you might have to put in a long driveway or even a paved road for proper access to the property. Depending on the terrain this could add major unknown costs to the project. For example, a driveway in Malibu has to be engineered to take a 20 Ton Fire Truck.
     

  • Where is the property? – What part of the state are you in? What County? Are you in the Coastal zone? These are big factors that can up the costs by having to pay more for permitting, hiring professional expeditors as well as paying other professionals like biologists, landscape architects, etc. If you are in an area that has more of these entities to deal with, it can dramatically impact the timeline of your project.
     

    My property is in Los Angeles County in an area that is also governed by the California Coastal Commission. Because it is their goal to regulate development on the coast there are many more hoops to jump through in this area and because each project there is independently reviewed by them and has it’s own unique factors to consider, I have no idea how long it will take to get through this agency. I’ve been to told it could be anywhere from a number of months up to a number of years.

  • Is it a legal parcel? – Was the parcel legally subdivided? Does the parcel have a Certificate of Compliance? Does it have a flat pad on it? If so, was it maybe illegally graded? If you purchase some land and don’t find out these things before hand you could be in for a surprise later down the road…it will be up to you to rectify them.
     
  • Does it have environmental restrictions? – If your land is in an area like the Coastal zone it may be considered ESHA (Environmentally Sensitive Habitat). This means that you won’t be able to do any clearing or cutting of brush, weeds, trees or anything without the proper permitting…which again could take an undetermined amount of time to figure out what’s on the property before anything can be touched. This might entail hiring a biologist and working with the fire department. If your property has oak tress, streams, etc…it can add unforeseen restrictions on the location where you wish to put a house.
     
  • Existing Easements? – Any existing easements for roads, future roads, power poles and parkland can shrink the amount of useable land a parcel may appear to have. Roads typically have setback requirements and even future use boundaries that will be typically much wider than the road that is actually paved. For example my land has a highway as one border and the future use area of the highway is much wider than the existing road. Due to this I had to figure out from the Roads and Planning Department just how wide it could eventually get and then what the setbacks would be from there. The same thing goes for setbacks from power poles, parkland and public trails.
     

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