Buying Land: A Practical Guide

Purchasing vacant land with the intention of building a home or starting a business can be an exciting and complex process. With real estate prices rising over time, many are drawn to the prospect of taking a raw parcel and creating their dream space or generating income.  We implore our clients to understand that the journey, while challenging, can be incredibly rewarding, providing they work with qualified professionals and conduct a thorough due diligence process.

The following is a brief outline of the key factors to consider when buying land, along with tips to help navigate the process.

Key Considerations When Buying Land

• Budget and Financing
• Clarify your budget and know your financial standing.  In addition to the property purchase price to be negotiated between seller and buyer, there are always transactional closing costs, property taxes, and miscellaneous charges related to buying real estate.
• Land purchases may require cash or specialized financing options, such as land or construction loans. Traditional loans are often unavailable so it is important to speak to your lender or bank to determine your best option.  It is advisable to have these conversations up front, so there is adequate time for funds to land from a cash-out refinance or 401k transfer.
• Think long-term and factor in improvement costs for site grading, utilities, or septic/water well installation. If the subject property already has some improvements in place, consider the impact on purchase price versus improving a raw parcel yourself.
• Location and Zoning
• Research the specific location and its local zoning laws and regulations. Cities and counties, as well as particular neighborhoods and even individual parcels, vary in everything from acceptable use to setback requirements.
• Explore the property’s natural hazards and any restrictions on use related to safety, ecological/environmental considerations, etc.  High fire zones affect fire insurance premiums and local brush clearance requirements in the majority of California real estate.
• Contact the local governing agency, which is normally the city/county Planning Department, to understand what can and cannot be built on the land based on your plans.  Residential, commercial, industrial, agricultural, and mixed-use zoning categories have defined acceptable use or business applications that need to be known and understood.
• Site Visits and Surveys
• Always visit the land in person to evaluate its condition, access, and surrounding area.  All direct entry should be coordinated formally with the owner of the property and if possible, accompanied by the seller or representative.
• If necessary, commission a site survey to accurately define property boundaries and ensure there are no surprises related to neighbors encroaching or property line disputes.
• Investigate the property’s location by viewing the parcel map or GPS coordinates on the below assessor’s link or Google Earth.  This normally helps to clarify many location and terrain questions ahead of a site visit, such as if the property is landlocked without street frontage, or steep hills and mountainous. 
• Due Diligence
• We strongly advise our clients to fully investigate any property they are interested in, both prior to making an offer and during our escrow investigation contingency period, should you choose to have one.  This includes checking for access to utilities by verifying with providers, conducting a percolation test for soil drainage as it relates to the installation of a septic system, and consulting with water well contractors about your potential drilling sites and the presence of potable groundwater.   Most often all due diligence period investigations are done at the buyer’s expense, unless agreed to otherwise between buyer and seller.
• Understand the costs associated with bringing utilities and services to the property if they are not readily available.  As an example, underground versus above ground electrical installation costs are drastically different, and terrain, distance from street access, and providers may impact costs as well.
• Building a Team
• Partner with experienced professionals and licensed contractors, who are familiar with the land development and permitting processes specific to the local area.  35 Oaks provides land consultation and represents land buyers, from start to closing. 
• Consulting with legal and financial experts will ensure you avoid costly mistakes, and take advantage of any available tax incentives for new construction, green energy projects for solar and other systems, etc. 

Buying vacant land can lead to creating a deeply personal and rewarding real estate project, but it’s not without its challenges. From budgeting and financing to navigating local regulations and site conditions, each step requires careful planning and working with the right professionals. 

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Notes regarding Assessor’s Parcel Numbers:

APN stands for Assessor’s Parcel Number (oftentimes listed under Facts & Features / Details / Parcel Number on Zillow).  This is the 10-digit identifier in Los Angeles County and it may vary in digits between counties and cities statewide.  The APN is often the only way to accurately locate a parcel, since vacant lots normally do not have an address assigned.  As a rule of thumb, we always tell our clients to look up the subject property on the local assessor’s website, so they can view the aerial map, overlayed with the parcel map for approximate lot lines, and accurately locate the land site.  Quite often the pin feature on the map contained in the listing is inaccurate, giving the buyer a false sense of the parcel’s location, so be sure to factor properly locating the parcel, by this means or otherwise, into your due diligence process.

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Southern California resources to begin your due diligence process: 

Los Angeles County Assessor's Office - Utilize the APN to view parcel maps and tax status for properties in LA County 

Los Angeles County Planning Department

Find My Zoning in LA County – Interactive Z-Net

[email protected] (general), [email protected] (best email for SCV/AV area unincorporated properties), 213-974-6411

Los Angeles County Treasurer & Tax Collector

New Property Owner – What to Know About Property Taxes & Supplemental Taxes in LA County

Property Tax Relief for Military Personnel

City of Santa Clarita Planning Department

[email protected], 661-255-4330

Los Angeles City Planning

https://planning.lacity.gov/contact/locations-hours

County of Ventura Resource Management Agency

[email protected], 805-654-2488

Kern County Planning Department

[email protected], 661-862-8600

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We partner with Zillow, as one of their Premier Agents - check out Zillow’s guide, How to Buy Land

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We work to ensure our clients are in the best position to make informed decisions and turn their land buying dreams into a reality.  As a reminder, please discuss any legal or tax advice with your attorney or accountant, as we are not licensed or qualified to comment on those matters.  The above outline is merely a suggestion as to where to start when buying land and all buyers should aim to satisfy themselves when conducting due diligence and exploring their financing.

Please reach out to set up a land consultation, be added to our buyer needs list, or receive daily land listings directly from the MLS.  We’re happy to share our trusted referrals for general contractors, foundation experts, engineers, water well and septic system contractors, etc.