1. WATER: Is the water via city/community system or a well?
If city/community system, there will be a tap fee, if not already paid, plus other expenses (such as meters, pipes, etc.) Even if the tap fee is already paid you may have a “stand by fee”. You will be charged for your usage.
If water is going to be supplied by a well, a permit will be required to drill. The well water will most likely be for in the house use only, no outside hot tub or watering the lawn. It may be possible to purchase extra water rights to allow for outside usage. The depth of the well will vary from one area to another.
2. SEWER: Is there a community sewer system or will you have to put in a septic?
If there is a sewer system, you will have to pay to hook up, the rate will be determined on the number of bedrooms, baths, hot tubs, etc. With sewer you will be charged for your usage.
If a septic is needed, you will want to make sure the land can handle the system you want for your house. Getting a “perk test” done before you close on the lot is a good idea; it can be one of the contingencies in the purchase agreement. A “perk test” needs to be done before winter and best in the spring; holes are dug to see how the land absorbs the water. This will make sure the lot can handle the number of bedrooms you require in your home.
3. GAS: Many areas do have natural gas supplied through Xcel Energy. There is a tap fee to hook up to natural gas. When natural gas is not available many people elect to use propane gas which is delivered to the home.
4. ELECTRICITY: Is electricity already run to the lot? Even if it is in the street there will be a charge to hook on. If electricity is not in the street then you will have to pay to have it brought into your property. You will want to know that expense.
5. ROAD MAINTENANCE: In many areas the county or the city plows the snow and maintains the roads. Some neighborhoods have their own metro district. Other areas such as Government Small Tracts and Blue Valley Acres #1 do not include maintaining the roads, so you would have to figure on doing or arranging for the snow plowing yourself.
6. ZONING: Make sure what you want to build is allowed. Normally if the zoning allows for a duplex it would be OK to build just one house on the property. Many neighborhoods have protective covenants too, that might limit fences, pets, outside storage etc. There also will be “set backs” which is minimum distance from the lot lines to the structure. You will want to make sure you can live with the rules.
7. SURVEY: It is a good idea to have a survey of the property with the corners staked. The cost of the survey is an item that can be negotiated in the purchase agreement. You will probably need a topographical survey too. Prices for a basic survey start at $500.
8. ARCHITECTURAL CONTROL: Some areas have a committee of other home owners who must approve the plans for your home. The restrictions can include requiring an architect, the total square footage, your building materials, landscaping, outside colors, etc. Some neighborhoods are picky and others are more lenient. You would want to review the architectural guidelines with the title work including covenants when you have the property under contract. If there are no architectural controls you will still have to deal with county or city building regulations.
9. ASSOCIATION DUES: Some neighborhoods have association dues. This is normally a flat fee each month or annually which could cover road maintenance, open space for the neighborhood or perhaps just the annual block party.
10. WETLANDS: The County may require a “wetland delineation” showing wetlands on the lot, besides willows, certain grasses may determine wetlands. You may not be able to build due to Army Corps of Engineer or local rules even though it is a subdivided lot.
11. SOIL CONDITIONS AND TERRAIN: In some areas the County requires a “soils report”, this is used for evaluating foundation designs. Steep terrain will cause your building expenses to be higher.
12. FIRE HAZZARD MIDIGATION: The reasoning is the County doesn’t want a house fire to start a forest fire. Therefore the County has requirements, such as no trees within a certain number of feet from the building, extra thick drywall, sprinkler system, etc. depending on the location.
13. TAXES: In Colorado vacant land is taxed at a higher rate than residential property. Currently the rate is 28% of the assessed value times the mil levy. Residential property is around 9% of the assessed value. What that means is when you build and your property is worth more, the taxes won’t be going up that much more. If you aren’t going to build, the taxes can be expensive.
14. HOUSING IMPACT FEE: As a way to fund affordable housing for local employees, Summit County collects an impact fee for new construction. The fees collected by the County are designated by law to be spent on capital for affordable housing, e.g. land purchases, newly-constructed homes or purchase of existing homes for employee use. A graduated scale is used to determine the amount of the impact fee that is based on square footage measurements between $0 and $2.00 per square foot. It is possible to delay the payment until the home is sold.
15. FINANCING: Finding financing on vacant land is not easy. Your best bet may be a local bank. The interest rate will be higher than for a residential property, and will probably be for a short term with a balloon payment. The theory is you will be paying off that loan when you start your construction. An owner carry may be an option too.
For more information check the Summit County web site at: http://www.co.summit.co.us
Information supplied by Keats Ann Scott, Colorado Dreams Broker 800-571-1091
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