Katherine Gemmecke / October 12, 2021
Katherine Gemmecke, Associate
Haven’t found the “perfect” fit for your business needs in an existing building? Developing a raw or an underutilized piece of land could be a great option to consider. However, before diving headfirst, you should understand the process behind purchasing and developing land. It may appear to be a simple process, but there are several factors to consider even before submitting an offer.
Having a local broker who is familiar with the area and market will be a vital to your success in establishing the property value, obtaining available information on the site, and asking the right questions. Keep in mind, not all land is created equal. You will need to follow these steps with each property you choose to pursue.
A few aspects to consider when looking at a property are:
And the list goes on. Discussions with your broker should also include consideration for the long-term future of the property and how that impacts building design, location and marketability when you want to sell down the road.
Congratulations! You are now under contract on a piece of land and are most likely in the initial stages of your Due Diligence period. You will need to hire a team to help assess and understand the property and its viability to your intended use during this period.
Having a professional team behind you will help you ensure the property you have chosen will best suit your needs and identify any risks or problems that may arise. When evaluating land, a buyer will usually have to spend some money and resources to determine whether or not it’s the best fit for them. In addition to your broker, your initial team should include:
– An architect to help create your building vision
– An engineer to conduct all necessary site work such as soil testing and a wetlands study
– A surveyor to identify the property boundaries
– An experienced builder to make your vision a reality
– An attorney to review any legal findings and assist with items that need to be addressed through local and state levels
– A lender to discuss your financing options and what each option might require, such as environmental studies and timelines for appraisals and final approval
You should also consider how much time you are willing to dedicate throughout this process. For many, hiring a project manager will be a great asset to you and the team. Project Managers are an excellent resource for the building process and will help keep your team organized and on track to meet all deadlines. Your broker will keep track of your contract deal terms and facilitate any discussions needed with the Seller. The project manager will help keep the inner workings of your development progress on target.
Your broker should include in your contract a Permit and Approval contingency period to allow you substantial time for discussions with the municipality and, if applicable, with the state. Discussions may include but are not limited to; current property zoning, approvals for a building permit, impact analysis, wetlands, traffic studies, required infrastructure, DEP permits, utilities, and more. In addition, you should prepare yourself to discuss your development with the local Technical Review Committee (TRC), Planning Board, and other committees each municipality and state might require to review before granting approvals.
When seeking permits and approvals, you should be prepared to present the town with a building plan inclusive of elevation details, floor plans, a site plan, and more. Your architect and engineer will help assist you with this presentation and throughout the discussions. What is required may be dependent on each municipality. Hiring a local team will come with experience and knowledge of each town to better guide you and navigate any obstacles along the way.
Pop the champagne! You’ve received all necessary permits and approvals and have the OK to begin construction. (Unless, of course, it’s in the middle of January. Weather always plays a part in construction timelines in New England!)
To recap, purchasing land might seem daunting, but understanding the commitment and hiring the right team will put you on the right track for success. Developing land allows an opportunity to customize a building to your exact needs that you may not find in an existing building. In addition, every piece of land is unique and may require contingencies to be built into your contract. Consulting with a real estate professional is a great first step to discuss your wants and needs in a property.
For more information on Construction Costs in 2021: https://boulos.com/increasing-construction-costs-and-challenges-in-2021/
Our Land Listings: https://boulos.com/our-listings/?propertyType=5