March 30th, 2010 by Michael Oliver
Are you interested in buying a parcel of vacant land in Tucson? Many buyers want to buy a pice of land and then build a dream home upon it and for many this dream becomes a reality. However it is important you understand the Tucson land market is very different from the regular residential business most Realtors deal in. Lots available for sale have zoning that must be adhered too, many vacant lots within neighborhoods that are being developed will have building restrictions on how your home should look and how large or small it is allowed to be. Buying land in Tucson and building a home on it is a very complex transaction only buyers willing to spend time to learn the process should get involved with.
Right now in Tucson due to the the real estate decline there is a lot of Tucson land for sale that is bank owned otherwise foreclosed land sitting on a lenders books and needs to be resold. This is where the best land deals in Tucson currently reside as the banks (like everyone when the real estate market in not moving quickly) have a hard time selling their vacant land holdings. The reason? Few people can buy land, many get interested until they learn the processes and time lines.
Is financing available on Land In Tucson?
Currently your financing options are limited most banks will not lend money on it and those that will want exorbitant interest rates and down payments. Right now only one Tucson banks will lend money on raw land with reasonable terms. During the boom land could be financed (mortgaged) with 30% down and rates would be close to 2%-3% over what a regular home loan would come in at. The reason? Land is a very risky bet for a bank to lend on. Tucson land prices change on a dime and the market is much more volatile then the housing market. Many people never realize this but it is simply the truth. So to be reasonable it is best to assume in todays current real estate cycle to buy a piece/ parcel of Tucson land you will need to be able to pay cash for it otherwise it may be difficult to find proper financing. Now once a buyer has purchased the land and built a home upon it at that point the home can be refinanced (just like any other property) and the owner can withdrawal money out of the property and obtain market interest rates.
What are a list of disclosures and issues you could find yourself with during a land purchase?
Here is a very realistic list of potential issues your land buy could run into. Again buying land is a process and it takes a lot of due diligence and research to complete a land purchase properly here is a short list of common issues land deals run into:
Encroachments, easements, endangered species, flooding, groundwater contamination, landfills, mineshafts, odors, pipelines, tunnels or wells? How about conservation easements, capped wells or burial sites? Has the land been tested for Radon or Methane gas? Is there a possibility that any type of underground storage tank has ever been present? How about soil settlement, drainage, earth movement,erosion, or fissures? Do you have a survey? Is it an ALTA or standard boundary survey? Is your land subject to CC&R’S and or Design Guidelines? How about local zoning, hillside, hilltop and floodplain regulations?
It is safe to say when buying land in Tucson it’s important to understand exactly what you are buying and you should have an experienced/ highly skilled Tucson Land Realtor representing you on your land purchase. Whether you are a out of state buyer looking to buy a raw piece of land to build a retirement home on, a small time homebuilder looking fr your next building project, or a Tucson native that just simply wants your own new home/ land investment all land sales involve complex disclosures and a process from beginning to end. If you would like additional information on buying or selling land in Tucson feel free to send me an email describing your situation.