The following is an outline of some of the factors that prospective buyers should consider before purchasing a lot on which to build their new home. This outline has been prepared as a reference for those interested in building in Vermont. The information in this outline should not be used as a substitute for obtaining legal, environmental, economic and other professional advice before making your decision to buy land.
Lot and lot improvements are a major portion of the costs involved in building a new home.
Many financing institutions consider and limit the ratio of lot and lot improvements to the total construction cost of your home.
Choosing and purchasing the land, on which you are going to build your new home, is as important as choosing the home.
- Impact Fees
Time and energy can be saved, as well as avoiding disappointments if you determine your total construction budget before searching for land.
- The most prudent first step in constructing a new home is determining what you will, or are able to spend for each major portion of the total construction package.
- The major cost components are the lot, the lot improvements, and the home.
- By doing this you know how much is planned in your budget for the purchase of land and land improvements, allowing you to aim your search at lots that meet your budget requirements.
You can speed your search by determining:
- The distance from a particular focal point that you are willing to locate
- Particular towns in which you desire to build
- Towns in which you do not wish to build
- The size of the lot you desire.
In addition, consider if you want your lot:
- on a dirt road, or paved road
- in a village, or would you prefer a more rural setting.
The more you define what you would like in a lot provides you, and anyone searching for a lot for you a quick reference in determining if you are going to follow up on a lot lead.
Remember, rarely do people find a lot with all of the attributes they have outlined. Compromise is almost always a necessity in making your final choice.
Get a Google Earth shot of the parcel and you can actually have a "bird's-eye view."
Get a topography map of the parcel. It will tell you how the elevation changes and where a good building site might sit.
An experienced real estate agent will also have a tax map, which can demonstrate topography, a bird's-eye view, and soils information.
This is a very important consideration before purchasing a lot.
The realtor, legal counsel or the landowner should be able to provide you with what permitting is required before you can build on the land.
However, this does not replace the need for you or your representative to investigate the need for any local and state permitting. In addition, you should determine if there are any deeded restrictions, the right of ways or environmental concerns relative to the parcel of land that you are considering.
For instance, a 10-acre lot might have 3 acres of wet lands. This would mean that there are state restrictions relative to what you can and can not do in and near the wet lands.
For additional wetland permitting information please check out the Vermont Land Owners Guide to Wetlands
Always consult with legal counsel relative to permitting and other restrictions, before purchasing any land.
Most lots on the market are permitted to the point where only building and curb cut permits are required before construction can begin.
Permitting requirements are of crucial importance. They can be expensive in both time and money.
Effective July 1, 2014, the Vermont Legislature passed the Shoreland Protection Act (Chapter 49A of Title 10, §1441 et seq), which regulates shoreland development within 250 feet of a lake's mean water level for all lakes greater than 10 acres in size. The intent of the Act is to prevent degradation of water quality in lakes, preserve habitat and natural stability of shorelines, and maintain the economic benefits of lakes and their shorelands. The Act seeks to balance good shoreland management and shoreland development. Also for additional information please access the Vermont Shoreland Protection Handbook.
If you consider purchasing a lot that does not have access to a municipal sewer system, you should be certain that the lot can support an on-site system, the type of that system and the cost associated with its construction.
Most lots will have had soil testing done to determine if a septic system can be built. In addition to the type of system required, you should determine if a septic plan design has been prepared by a Vermont licensed engineer. If not, the cost associated with having an engineer design a system will become part of the lot improvement cost.
Even though there are other considerations that will effect the construction cost of a septic system, the major difference in cost is related the type of system.
The system requiring the least cost is a conventional system.
If the soils do not support a conventional system, a mound system or pre-treatment system is usually required. A mound system will cost as much as four times what a conventional system will cost.
In most instances, the septic system is part of the permitting. If required, be certain that a permit and design exists for the septic system.
In addition to septic consideration, the nature of the soils can impact the cost of construction.
For instance, the existence of ledge that requires blasting can add thousands of dollars to the construction cost.
We suggest discussing this issue with your contractor before purchasing a particular lot.
The cost of extending electric power to the location of your new home is a major consideration that can be a substantial cost.
You should discuss this with the provider of electrical service to the area and with you contractor, to determine what the installation of electric power to your home will cost. Will it be over head or under ground electrical. Off grid or solar.
If the lot you are considering does not have access to a public water system, you should check with your contractor or a well company to determine
- what is the average depth of wells in the area
- and what is the expected cost of a total water system, including pump and installation.
Regardless of the depth wells are averaging in the area, it is not a guarantee that a well on the lot you are considering will be the same depth.
The distance that a driveway needs to be constructed will affect the cost of lot improvement.
Obviously, the longer the driveway the more the construction cost, as well as the cost of plowing, sanding and upkeep.
9) IMPACT FEES
Some cities and towns impose an impact fee on any new construction within the city, or town limits.
There may be one fee or a fee for the impact on each municipal service.
In some instances, these fees total several thousand dollars, which in turn increases the cost of a new home by the same amount.
You should always check with the town, or city clerk to determine if there are impact fees associated with the construction of a new home in the area you are considering building.
Other factors will have an effect on the lot improvement costs, including:
- How much area must be cleared of trees and stumps
- Water drainage and Storm Water Run Off