|The New York
By Tina Traster
May 10, 2007 -- REMEMBER how exciting it was when Pa built the little house on the prairie for the Ingalls family? That pioneering spirit lives on. If you're willing to go to the trouble to buy raw land, you can build your dream from scratch - even within striking distance of New York City.
Ron de la Pena is one such pioneer. The 41-year-old Manhattan graphic designer recently purchased a 17-acre wooded hilltop for $175,000 in Galletin, a rural community in upstate Columbia County. Pena figures he'll spend roughly $750,000 to build a small house and make land improvements. For less than $1 million, he'll end up with a personally designed country getaway.
"I've got space, privacy and a 360-degree view of the Berkshires, the Catskills and Stissing Mountain," says Pena. "I love the notion of having so much land."
Buying raw land is a thrill and a challenge. It is a visceral experience that feeds into our fantasies about who we can be. A mountaintop inspires visions of dwelling in a castle or fortress. A wooded hideaway affords privacy for a reclusive artist or writer. At its core, a rural land purchase is the ultimate way to say, "I will not buy that house that looks just like my neighbor's in a suburban cul-de-sac."
For the privilege, buyers face a complex process. It can take at least a year to buy land and build a house. Land today is subject to more regulations than ever, from wetland restrictions to energy-efficient building standards. You'll have to consider access to water, sewer, utilities and roads. You may have to plunk down a big chunk of the purchase price to get a loan. Then you'll need a construction loan to build the house - all this while you're paying rent or the mortgage on the place you're living in.
But if you think you're up for the challenge, read on.
First, you have to find the land. You can simply drive around looking for "For Sale" signs, or you can search the Multiple Listing Service online (click on Lots and Land). But your best bet is to identify an agency that specializes in land, like Barns & Farms Realty (hvreal.com), which covers upstate New York and the Berkshires.
Plan to cast your net at least 90 miles in any direction from New York City to find affordable land. In nearby suburbs, developers have snapped up most unimproved lots.
"A half-acre of unimproved land starts at about $200,000 in Rockland County because there's no land left," says Valerie Moldow, associate broker for Century 21 Grand in Pomona.
Compare that to Dutchess County in upstate New York, where land prices start at $10,000 per acre, or to Connecticut's northeastern corner, where the per-acre price is about $12,000.
But Realtors are also noticing that land prices, like housing prices, are falling, and that parcels are staying on the market longer.
"We've seen a 30 percent drop in prices," says David Birch, principal broker/ owner of Barns & Farms Realty. "Buyers today can drive a hard bargain; they can really negotiate."
Keep in mind, though, that lenders on land typically want 30 percent down, that interest rates are a couple of points higher than traditional loans and that the terms are usually less than 15 years. Your Realtor or title insurance company should be able to steer you to a local bank or credit union. Sometimes sellers will finance the deal.
Knowing about the property is a valuable bargaining chip. A buyer must establish whether a site is suitable for building; the local town hall can be a good resource for this. Find out if you need an easement or if anyone else has an existing easement on your land. Ask the assessor for tax information as well as records about flood-zone boundaries and wetlands. And check with the town's health department to see whether the land is already approved for building.
One of the first issues you have to deal with is water: Is there a proven water source on the property?
Keep in mind that while most land has water somewhere under the surface, locating and tapping into that water source can be expensive. There is no way of knowing how much a well will cost until the digger locates the source.
Also, be aware of waste-management issues. "On rural land, a septic is likely needed, and it can cost between $7,000 and $35,000," says Birch.
Buyer John Tuccillo knows all about it. When he bought 13 acres of land in Dutchess County's Clinton Corners, the property was already approved for a septic, so he didn't hire an engineer and he passed on a soil percolation test.
"I thought we were good to go," says Tuccillo, who built a 3,500-square-foot, four-bedroom pine-and-cedar log cabin. "But when we started digging for the septic, we hit clay. We had to bring in fill and top soil, which set us back $5,000."
Next stop is the planning department. Are there zoning restrictions, minimum lot sizes or setbacks that crimp your plans? Building in flood plains or by the water may be subject to review and approval by the state.
Also take a look at the county's long-range land-use plan, so that you won't find out the hard way that a major highway or garbage dump is slated to be built near your property. And if you're building in a landmark district, you may need to deal with the preservation office.
Next, get estimates on utility hookups, or plan for solar power and a backup generator. Most power companies in New York do not charge for the first 500 feet of service from the nearest power source. The cost beyond that averages around $10 per foot.
You'll also want to hire a surveyor to determine the lot's suitability for building and to identify the property lines. Assess whether trees need to be cleared or hills graded - this all costs money. (U.S. Geological Survey satellite photos of most of the country are available on the Internet; check terraserver.microsoft.com.)
When Roger and Patricia Underwood fell in love with a 7-acre parcel in Woodstock, Conn., the land survey revealed that the abutting landowner owned 100 acres. Wanting to secure their peaceful paradise and create a buffer, they purchased 5 acres from the landowner.
"We wanted to buy a large piece of land so we wouldn't have to listen to neighbors' screaming kids," says Roger Underwood. "Our neighbor may someday sell to a developer to build a subdivision, but we're set back enough so that our neighbors will remain the rabbits, deer and foxes."
Finally, you'll want to build in some security by buying a "land and house" package from a reputable builder. The builder must ensure that water and sewer service is provided and that the house will meet local zoning requirements.
"A builder will get more favorable terms with the bank, plus he shoulders the entire burden to get the house built and permitted," says Dennis Duga, owner/broker of Northeast Realty LLC in Union, Conn. "This makes for a smoother process so long as you have a carefully worded contract that states the exact price."
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