Complete Thoughts On Vacant Lots
Rules Of Thumb That Make Looking for Land Easy
The most common client request I get is not about buying or selling a house, it’s about buying a vacant lot. Land is still king! And after looking at billions1 of vacant lot listings during my career, I’ve developed a few rules of thumb to guide me and my clients in any conversation about a vacant lot.
Surprisingly, a lot of people don’t want to buy a lot to build a house. Many want to buy a lot just to have it, to be able to camp on it, put an RV or to shoot guns in peace on their own property.
A quick disclaimer. These rules were developed in the Pacific Northwest and work best here. They probably don’t mean a lot if you’re in Kansas or Texas or Florida or Afghanistan.
On to the rules:
The lot is the only undeveloped land left in a neighborhood.
Almost certainly unbuildable. It doesn’t make sense, it seems like it would be impossible, there’s houses everywhere! But if a lot is all by itself, in rural suburbia, there is almost certainly a reason why it hasn’t been developed before. The smaller the lot, especially less than an acre, the more likely this is true. Either the land doesn’t perc (can’t hold a septic), it has wetlands on the property, or there’s some other issue that the previous owner was unable to resolve. My favorite listing in this type of lot was a half acre lot that was almost a sheer cliff.
The lot is huge, enough for multiple homes, and is priced to the moon.
A seller wants to fleece a developer. For some reason, we instinctually think that a company has more money than individuals and will be willing to pay more for it. Sometimes this is true, but home builders have budgets and trying to make a profit. Nevertheless, that’s the market for those kinds of lot listings.
The lot has been listed or gone pending multiple times before.
No matter the size, no matter the price, 99/100, you see this and know that any time or money you spend on it is just for fun or for curiosity’s sake. The very first lot I ever got calls on was a lot that had been on the market almost continuously for 18 years. It turns out this one was zoned commercial/airport (and it was inexplicably, the last lot for sale on a residential street. But the seller, and their agent, were doing a poor job of making the full situation clear to potential buyers. It had gone pending numerous times over the years but never closed.
The lot is on the market for the first time.
Make an offer with a feasibility period right now. Run don’t walk. This could be a winner! These are gold rush type listings where there can be an immense amount of interest, as if it was a beautifully staged house. They’re popular if they don’t obviously fall into one of the 3 categories above. They could be unbuildable, they could have protected species on it, or be full of wetlands, but since it’s the first time on the market, no one knows yet. The rare lot in this category already has surveys or perc. tests done for you. Some even have house building plans developed or utility access on the property. These lots go pending within days. Blink and you miss them altogether.
A rural lot not big enough for a big house.
When you see this kind of lot, there’s only one question you should ask yourself… do you want to own your own campground?
When you make an offer on a lot, you rarely have all the answers. The seller often times knows nothing about the property and can’t offer you very many warranties or answers of any kind beyond the legal description of the lot. This is why a feasibility period is key. A feasibility period allows a buyer to get under contract, test the lot, get answers from local specialists or the county and then back out if they don’t like what they find out.
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Michael Perrone is a licensed managing real estate broker in Washington State and is the owner of The Perrone Real Estate Group. You can reach his office at 425-224-6040 or by subscribing and responding to these newsletters.