and Building on Raw Land
What a great dream, I have had this one as well. There would be nothing better than to buy a piece of land and build my own home to my own specs. I havenít done this yet, but have worked with people that have. What I have found is that you can do it, it just takes patience and education. I can't help you with the patience, but I can help you a little with the education part.
There are several
inaccurate assumptions when it comes to buying and developing land in the
area. Below I will try and address a few of them.
There are several inaccurate assumptions when it comes to buying and developing land in the area. Below I will try and address a few of them.
buy a piece of land and subdivide it.
Most of the property up
here has been subdivided already. Many
of the parcels are remnants of large ranches from the 1800ís.
Land was handed down and different generations subdivided as they went.
San Mateo county uses
ďdensity creditsĒ to decided how many homes can go on a piece of land.
One density credit equals one home.
At some point in time the county looked at all the parcels and all the
people and assigned a maximum number of homes it would allow from Skyline to the
Ocean, then lots were assigned density credits.
Most of the lots for sale have 1 density credit.
Many of the remaining lots that have more than one density credit are
larger lots and there are usually road or water challenges.
For example, there may be 150 acres with four density credits, but the
last two areas where the density credits ďresideĒ are impossible to get to
(and by impossible I mean they may need a $5M Ĺ mile road, or may need a $10M
bridge). So for all intents and
purposes there are 2 density credits, however itís usually priced like there
are 4. The net-net is you arenít
going to buy one, two, five or twenty acres and be able to subdivide it.
There are always exceptions, but they are rare.
have a house up in a year from the purchase.
If you are lucky, you will
have just broken ground.
As I mentioned earlier,
most of the parcels left are remnants of old ranches, which means that the lots
arenít ready to be built on when they go up for sale. What do I mean by that?
In order to break ground on your home, you need some infrastructure
already in place. Remember
there are no sewers up here, and usually no water at the street you can tap
into. So BEFORE you close
you need to make sure you can build on the land before you finally purchase it.
This means you need to drill a well (you need water), perform a
percolation or ďpercĒ test for the septic system (you are going to need a
bathroom), you need to make sure there is road access to the site you want to
build on. You also need to make
sure that in a good rain year, the place you want to build isnít going to
slide, so you need a geology report. You
also need to make sure where you want to build the home is actually on the
property you want to purchase, so you need a survey.
So the timeline to build a
home on a piece of land goes something like this. You find a piece of land you want, it takes you 3-6 months to
make sure you can, with 80% surety, build a home there (and around $30-50k).
Then you get an architect, and submit your plans to building and
planning, they tell you to redo something, which you do, then they tell you to
do it again, which you do. This
process can take six months to a year or more depending on zoning.
Then you break ground, and start the process.
This can take a year or two.
I always tell my clients to
be prepared for a two or three-year process from start to finish.
I am not usually wrong.
cheaper to build than buy a home
It depends, as I mentioned
earlier, you typically have to spend about 30-50k when you find a piece of land
just to make sure you can actually build a home there.
If you have to do this a couple of times, it gets rather expensive.
Building prices up here range from about $300 to $400 a square foot. Also keep in mind that construction loans are typically more
expensive than regular home loans (in terms of interest rates).
And the closer you get to completion the more your payment is to the
bank. In the interim you are paying
your current house payment, or rent while your home is being built.
This is why you have friends that have built and are riding their
contractors to do the finish work so they can move in.
They are making almost a full home payment, and the contractor has almost
all of his money. This leaves you
pleading with the contractor to finish so you can move in.
on rural land is the same countywide
There are several different
areas with different restrictions. You
have scenic corridor areas that have more restrictions on what you can build,
and you have coastal zones that have a ton more restrictions.
What may take you two years on a piece that is not zoned coastal or
scenic corridor could take 3 or 4 years for scenic corridor or 4-5 or more for
things to think about
We all need water, and
oddly enough the county requires you have water to build a home.
There are several different ways in rural communities you can get water.
There are numerous small water companies that supply water on Skyline
Blvd, in La Honda, Loma Mar and Pescadero.
ButÖbaring that, you usually need a well. As I discussed earlier, most properties for sale donít have
water. This means before you buy
the place you need to drill a well. This
can run you $20-30k. If there is no
water or the well yields less than 2.5 gpm for 4 consecutive hours of testing
(for a single family home as of Jan. 1, 2006), then you canít build, or you
have to drill another one. But at
least you didnít spend $750k on a piece of land you canít build on.
When the well is drilled, and you get ready to hook it up, you will need
a 1250-gallon storage tank (for a single family home as of Jan 1, 2006) and
usually a pressure bladder set up and a filter system.
There are no sewers in rural areas, so you need to have a septic system.
A septic system is usually a concrete box divided into two chambers that
holds about 1500 gallons. Hooked to
this are two leach lines that take the liquids from the tanks and leach them
into the ground. In order to find
out how long these lines need to be you need a perc test.
A perc test (short for percolation) is done prior to installing a septic
system in order to assure that the soil is of such a nature to accommodate your
septic effluent in a safe manner. The idea is for the soil to filter and allow
oxygen contact with the liquid effluent so that the good bacteria will safely
and completely digest the not-so-good stuff. Soil that has too much clay, too
much sand or gravel, bedrock close to the surface or too much water, will not do
the job properly. What they
basically do is dig a big hole, put in water and time how long it takes to drain
into the ground. If it drains to
fast, thatís bad, too slow, thatís bad too.
After your perc test you will be given a ďgradeĒ depending on how fast the water drained out, either an A, B, C or Failed. The grade is the deciding factor on how long your leach lines need to be. Itís a good idea to have a perc test complete and signed off on by the county prior to close of escrow. These usually run in the neighborhood of $1500-3000. Again, if it doesnít perc anywhere, or there isnít room enough for the leach lines, or the grade is too steep (you canít put leach lines on a slope of 50% or more) then you canít build. But itís better to have spent your money on this and find out you canít build than to spend $750k on a lot you canít build on.
Building on raw land is a great opportunity if you know what you are getting yourself into. With a little patience and wide open eyes, building the perfect home to meet your personal needs is still an obtainable dream. I always have my favorite pieces of land in the area, give me a call and I would be more than happy to further discuss them with you.
Questions? Give me a call or send me an E-Mail
RE/MAX Pioneer @ Skywood