5 Things to Consider When Buying Lots in Philadelphia
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Vacant lots like this can be found all over Philadelphia.
There are plenty of lots listed on the MLS but many more
take a great deal of research and bureaucratic know-how
to acquire.
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Whether you're building a home, or purchasing as an investment, the time to buy land or more likely in Philadelphia a lot, the time has never been better.
It's still a buyer's market in many areas around the country yet national trends indicate that the housing market is turning a corner. In fact, due to the election year and historically low interest rates, many areas are experiencing bidding wars that haven't been seen since before the recession. The staggering number of vacant lots in Philadelphia tops 40,000. In many of Philadelphia's sought after neighborhoods inventory is very low spurring bidding wars on the few properties up for sale. Many investors, developers, and traditional homebuyers have seen the city's blight as a golden opportunity to compensate for aging or inadequate real estate inventory.
While the decision to buy a vacant lot may be easy, the process is certainly not. Here are five tips for buyers interested in purchasing land.
1. Know the Properties Boundaries
Request a plot plan of the property and walk the entire border line. Make sure your agent and the seller are clear with you about where the property begins and ends and where the site setbacks are. This may seem simple especially when dealing with city lots. It is important to be aware of any easements or encroachments on a listed property before making an offer.
2. Research the Neighborhood
There are so many neighborhoods in Philadelphia. Most of them only comprised of a few square block. With every neighborhood there are different characteristics, business opportunities, and challenges that come with each one. Get to know your surroundings. If you're a homebuyer, talk to the neighbors and ask them a few things about the neighborhood. Visit local shops and restaurants and be sure to visit the site at different times during the day and week. Right after school is dismissed and weekends are a great way to gauge how living in that area will be on a day-to-day basis. If looking at a lot for investment purposes, numbers are your best friend. It's crucial to know all about the buying history of the area for at least the last six months. Because Philadelphia is such a densely populated city. I usually do active, pending, and sold comps no more than a half mile from the subject property. This can also be done with rental rates.
3. Check for Utilities
Does the property have any utilities set up? Was there any soil or percolation testing done for sewer or any cost estimates for installation of utilities? What is the property zoned for? In most instances, your real estate agent will be familiar with these issues and should ask the seller on your behalf. However, the buyer should be aware of them and any possible costs that may arise after the sale so she can work them into the offer price.
4. Ask about Taxes, HOAs, and Assessments
Do you know how much the property taxes are? Are there any existing assessments on the land? Does the lot or land reside in a common interest community with a homeowners association? All of these factors should be considered when buying property and should determine your price when making an offer. Buying a lot in Philadelphia especially one that is not already listed with a brokerage can be tricky. There are several resources that you can use to sort out who actually owns the property, any parties who have interest in the property, and what steps need to be taken in order to be granted possession. You can click here and here to learn more about city programs developed to help move vacant inventory in Philadelphia.
5. Get the Right Help
Use an experienced real estate agent and lender. Land sales are different than home sales, and agents who primarily sell land are more difficult to come by. An experienced agent will know the right questions to ask and can help narrow your search significantly. You may also find that your loan options are more limited than if you were buying an existing home. If you're planning to build, you may want to consider a lender who specializes in construction loans and can finance the entire project. Be advised, though, that many lenders shy away from offering full financing for undeveloped land or unfinished construction. In these cases, because there is no collateral and greater risk to the lender, you may find you need a larger down payment or have to settle for a higher interest rate on your loan.
With the right amount of research, preparation and support, you should have no difficulty finding the property of their dreams at a reasonable price. Start searching for vacant lots in Philadelphia today at www.phoenix4philly.com
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Contact your personal Real Estate Consultant Today!
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Nicole Phoenix
Phoenix for Philly Real Estate
Keller Williams Realty Center City
www.phoenix4philly.com/about/
215.469.1635
nicole@phoenix4philly.com
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