Sunday, December 26, 2004

Getting the Land

Here's some pre-construction pictures of our lot:

The first photo is looking northwest from about the center of the build site. The newly-constructed shared driveway is visible across mid frame. The second photo is the view to the southeast from the shared driveway, with the corner of the garage to our west just barely visible in the far right of the frame and the existing home visible to the east. Dimensions of the lot are 100 feet wide and ~260 feet deep.

This property was originally part of a ~3 acre site that belonged to the owner of the home to our east (visible in the second photo). In addition to the house, previous owner had built a garage on the west side of the property and was in the process of getting city approval for a minor subdivision to split the land into three separate lots at the time we came across the listing. The existing home and the lot with the garage had already been sold at this point, and our lot was .52 acre between these two properties.

With our initial drive-by, I was intensely interested. It was definitely the best that we had seen to that point after several weekends in the car and countless hours online. The north-south orientation was exactly what I wanted. There were beautiful mature trees all around and the street and neighborhood were quiet and relatively secluded. It was neither densely forested or a barren prairie, and it was reasonably close to work and downtown. Best of all, the property was bordered at the back by an abandoned railroad line and then wetland, so there were no backyard neighbors. It definitely stuck in my head.

What we didn't learn until our meeting with the seller's agent a few days later was that the land was still in the process of being divided, so the lot was not truly it's own entity at that point. As part of the subdivision agreement, the seller was being required to improve (pave) what was the existing gravel drive off the main road to provide access to all three lots with a truck turn around. Another requirement was that the sewer and water be revised to service all of the soon-to-be created lots. We were given a survey and proposed plan that suggested what the lot would look like once the development was complete and were told by the sellers agent that this work would take place “as soon as possible in the spring” (meaning the spring of 2004). What the agent failed to reveal was that we would not be able to get building permits until this work had been completed and approved, a fact I discovered on my own after calling the city to investigate the property prior to our decision to purchase it. That it was up for sale in advance of this seemed (and probably was) a little shady, but we were placated with the knowledge that the owner had been required to escrow 125% of the cost of the development work with the city which gave him a financial incentive to get things completed.

The second twist was that the sellers agent at first implied that the lot was controlled by a builder. The agent essentially tried to railroad us into contracting with a builder with whom he was affiliated for the construction of our house by conveniently choosing to discuss the details of the property within the context of this builders sales material and contract. After a few pointed and repeatedly asked questions, I did eventually get him to admit that the lot was not promised to or owned by a builder, but this was not information easily gleaned. (I often wonder if the seller he was representing had any clue about this tactic and how many potential sales of this same property were lost because of it). When it became clear a week later that we were serious about purchasing the lot and NOT contracting a home through him, the asking price went up by $5K with the statement of "the seller is being required by the city to pay more for the revisions to the sewer and water" . This was a blatant lie. The fees for that work had been established by the city and were known to the seller well prior to our negotiation, so basically this was just the label the seller or agent invented for the additional money we were going to have to pay to get the lot builder-free. We didn't argue because we still felt like we were doing the right thing and really wanted the lot by that point, but I would have felt much better about things if the facts had just been stated instead concealed with untruth. Unfortunately I believe this is a testament to the character of the real estate business in general. Add to it that the the sellers agent never returned phone calls and getting a straight answer out of him about anything was like pulling teeth, and that the agent representing us was uninformed and didn't specialize (or have experience?) in land transactions guarantees neither of us would look forward to doing this again.

The planned development wasn't finished and the subdivision wasn't approved until late summer which didn't affect our schedule, but we actually closed on the property before any of the work had even been started. This was not a situation we were thrilled with and a gamble to be sure, but it was also a risk we felt we needed to take to get what we wanted and it turned out to be a good one. That said, the moral of the story is to investigate everything for yourself regardless of who tells you what. Facts we discovered on our own could have had a huge impact on our project in any number of ways.

Now that all is said and done with the lot we're thrilled, but the entire land buying process was stressful and frustrating, and that's without even mentioning the financial component which is a subject unto itself. As I've probably made clear, the sellers agent was difficult to work with and the agent representing us was not the best choice so in hindsight we were at something of a disadvantage. Fortunately it all worked out fine, but if there's ever a next time, we'll seek out an agent to represent us who specializes in land and be certain to do our homework on whatever we're up against no matter how much we trust the person were working with. Our experience has been that more often than not, a "you can't do that" really just means that it's not the most profitable or convenient way for that person to do it.

Thursday, December 23, 2004

Hunting for a spot to put it

Our quest for the perfect piece of somewhere for our new home started with the internet. Have I mentioned that I don't think any of this would have been possible without the www?
(Originally posted to 12/23/2004)

The on-line MLS listings are a quick and simple way to keep an eye on what's for sale in any given area, and the better search engines are an indispensable asset because they allow one to narrow a search using many different criteria. I cannot say enough about how useful this was.
We initially set our budget for land at a very optimistic $50K. I say optimistic because I think we knew even then that it was a slightly unrealistic hope that we'd actually find something in that price range, but we figured we would at least try looking at the cheap stuff first. Doing this also helped put dollar figures into perspective. It's hard to know what's reasonably priced and what not unless you've seen what's out there.
As they say, location, location, location. For us that meant proximity to civilization and S.O.'s job, hopefully keeping the commute equal to or less than his current 30-40 minutes. While we would have done it if the conditions were ideal, we wanted to avoid being too far out in the sticks. We (primarily me), wanted something with decent access to the amenities that a big city and its large inner suburbs have to offer. I've spent some time living urban and I love the convenience and diversity of being in the center of things. Nothing makes me crabby like not being able to get good imported cheese, great bread or gourmet ingredients when I'm on a cooking binge so as shallow as it sounds, reasonable proximity to good grocery stores and ethnic markets was pretty important. I certainly wasn't going to be picky about zip code or neighborhood cachet as long as a few basics were met. I always figured we'd have to be flexible and take whatever we could find that would work, which is not to say that we would have purchased just anything with good location. We wanted to be comfortable and in a place we liked, and it had to have at least a few desirable characteristics. All of this really amounted to a “I'll know it when I see it” kind of thing.
As far as evaluating prospective properties, I found the on-line city zoning regulations extremely useful during this time. A MLS listing usually always includes lot dimensions so those numbers minus the minimum setbacks and building height restrictions specific to the location give a good idea of the maximum footprint and height a house can be.
It turned into something of a game for me. Once I spotted a listing that looked promising, I'd investigate the city code and then play around with my design to assess the compatibility of our needs with that lot. We also spent a lot of time driving around looking since it's hard to get an idea of something from just a photograph, and neither of us have any sense of what a tenth of an acre, or whatever, actually looks like. Using these two methods, it was pretty easy to weed out what wouldn't work right away, which was most everything we saw.
There were a surprising number of city infill lots which was exciting in terms of general location and what we were vaguely hoping for, but most were just too small or in bad neighborhoods. We looked at some larger rural lots, but those areas are, for the most part, overrun with developers so they rarely panned out and what wasn't already spoken for always had too many negatives. I spent a lot of time on the phone during this period as well, basically acting as our own real estate agent, inquiring about the details of properties (more on that later).
Needless to say, this was a lot of work. If it wasn't for the garage problem our lifestyle presents, we would probably just have bought one of the increasingly common city lofts and been done with it, but fortunately for us, the reward for our efforts was more than we would have hoped. To say that we got lucky with the property we found would be a drastic understatement, but I believe there is something out there for anyone with a little (or a lot) tenacity.
I have to point out that there exists in this phase a potentially frustrating catch 22. You can't really design a house until you know where it's going to go, and you can't judge the appropriateness of a lot unless you have an idea of what the house will be. I'm curious to hear how others deal with this situation. In our case, we knew we didn't have the luxury of looking for land to suit the home because: A. there just isn't that much available, and B. we're definitely NOT in the cost is no object budget category, so the concession was made immediately that if the lot was suitably sized and otherwise desirable, we would adjust our design to suit it. Also along this line is the problem of cost. Fortunately by the time we actually started looking for land, I had a good idea of what we were planning to do and the amount of space it would require. We also had a good idea of what we could afford for the project in total, so it then becomes a guessing game and weighing of options to decide how many dollars you're willing to concede to land. Of course there are guidelines available out there that address this, but most of what I found seemed like it must have been written before the crazy real estate market (I'm increasingly hearing it called a bubble) came into being. Our experience makes me believe that in general, building something outside the mainstream practically necessitates a larger budget for land because there is so little to choose from in the first place. I hope this isn't the case forever.

Tuesday, December 21, 2004

Where we started

Our thoughts and ideas regarding the decision to build and how we got things moving ahead.
(Originally posted on 12/21/2004)

It had been established from the very beginning that we wanted to do something out of the ordinary. I was full of ideas and holding fast to my belief that we could accomplish anything we set out to even though the solid examples of “different” are few and far between around here. Out of curiosity and in the name of research, we spent some time at the beginning of this process looking at parade homes and perusing the existing homes for sale on the MLS. Nothing we saw in our price range or well above was even remotely close to what we were thinking of. We also considered somewhat seriously, the idea of renovating an existing commercial or industrial space so my real estate searches included these types of properties as well (yay for the internet). It became clear pretty early on that new construction was going to be the best way for us to achieve our goal.

In the Twin Cities metro area, probably like most areas, almost all new construction consists of large tracts of land purchased by a developer and then sold off in chunks to corporate builders who proceed to fill them with oceans of beige and gray vinyl siding, pitched roofs, and divided light windows. Although finding a development where the builder will do something “custom” (you can practically see the dollar signs in their eyes when you mention this) is not difficult, the architectural restrictions and covenants present in these situations are inevitably aimed at making every house conform to a certain bland “development” asthetic that we are all too familiar with. I think it would have been possible to make this work as others here are proving, but the design compromises we would have had to make, paired with the fact that the we'd still be living in a sea of beige cracker boxes ruled this out pretty quickly.
Another major deterrent to building in a development was our desire to have complete control over who was going to be doing our construction. Two members of my extended family are general contractors, one has a lifetime of building experience and several of my other relatives work in the construction trades. It was obvious from a cost and trust perspective that we wanted to utilize these resources as much as possible rather than contracting with a stranger for a complete, finished product.
So the hunt was officially on for land that would be unencumbered by neighborhood covenants and architectural guidelines and association-free. Around this time, I also cold-called a few Architects in the area whose work I admired. The response I got after stating our goal was less than encouraging. Aside from the expressed doubts about the reality of our needs and wants vs. budget, the depressing news was ”call me back when you find land” and land-finding tales of woe of clients with similar ideas. Pretty much an instant validation of the concerns I was trying to mitigate in my mind, with the problem of land being first and foremost.
Not easily discouraged and being the stubborn, willful people that we are (and undoubtedly somewhat naïve), we made up our minds that we would dedicate a year to the search for land. If we still hadn't found anything at that point, we'd reevaluate our options. That was December of 2003.