A Quick Guide to Buying Land in Anne Arundel County Maryland
Perhaps you are thinking about building your next home instead of purchasing on that has already been constructed. Or maybe you once lived in a home that you’d like to live in again. Either way, when thinking about building versus buying there are a few things to consider as you get started.
1. Selecting Your Site
Land comes in all sizes and shapes. Here in Anne Arundel County, land is still at a premium in that there isn’t that many locations left to build on. This is especially true if you’re considering waterfront lots. Whether on the water or off the water, any property located within the Chesapeake Bay Critical Area will be subject to additional building restrictions. In most cases you can build almost anything you want as long as it meets local building code. But, some sites may have covenants that state the minimum requirements were you to build (such as the minimum square foot or even a maximum square foot – I’ve seen both!).
2. Writing a Land Contract
When it comes to writting the contract to purchase property, the standard Maryland contract used by many members of the Maryland Association of Realtors is different that your residential contract. The key difference is that a land contract will stipulate any feasibility studies you want to perform before your obligated to purchase the lot. Some possible feasibility studies you might consider include:
- Sewage Disposal – Specify if the sale is contingent upon a percolation test (usually referred to as the “perk test”) to determine suitability for the installtion of a private on-site sewage disposal system.
- Public/Private Water – Specify if the sale is contingent upon any provision regarding well water quantity or quality or the ability to connect to a public or private source of potable (“drinkable”) water.
- Survey – Specify if the sale is contingent upon a survey of the property. This may or may not be needed to meet the underwriting requirement of the title insurers and/or mortgage lender.
3. Agriculturally Assessed Property
You will want to determine if the land is subject to any agricultural taxes that will be assessed at the time of the sale. You will want to specify whether you (the Buyer) or the Seller will be paying those taxes, if any, in the Contract.
4. Forest Conservation and Management Programs
Forest Conservation and Management Program taxes - like agricultural taxes – may also come due when the property is sold. You will want to specify whether you (the Buyer) or the Seller will be paying those taxes, if any, in the Contract.
3. Borrowing Money to Buy and Build
Unless you’ve got “cash to burn” you will probably need to borrow money to purchase the land and build you new home. This usually takes the form of a construction-to-permanent loan. The idea behind construction-to-perm loans is that you have one closing where you purchase the land, establish the escrow for the construction, and upon satisfaction of occupancy requirements by the county and your bank, your construction loan will convert to a conventional mortgage.
4. Selecting a Design, an Architect and a Builder
While the design part of building a new home may seem the hardest, selecting an architect, if the home needs to be designed from scratch, and a builder who can execute the design, is actually harder. You will be looking for a custom builder that has built homes in the area before. You may even want to talk to some of the builder’s past clients, go visit their homes, see exactly what it is that the builder has constructed before. The very best builders may be booked far in advance, but, with the recent economic downturn, they might have openings in the schedules and crews that they could assign.
5. Working the City, County and State Authorities
Depending on where you are building, you’ll need permits and approvals from city, county and state authorities for a variety of construction matters. You will need to work with the Anne Arundel County Department of Health on matters concerning the well and septic systems. And, you’ll need to work with the Maryland Department of the Environment for any permits that may be needed to comply with Maryland’s environmental requirements (for example permits where the waterfront may be impacted including piers).
For a list of possible residential building sites in Anne Arundel County Maryland, follow the link below:
For detailed information on an example building site in Lothian Maryland, follow the link below:
So, whether this is the first home you will build or it’s your final home site, the process starts by finding a the location and finishes when you’re ready to move it. It’s both exciting and challenging to build a home and watch your dream come to life as you oversee it’s design and construction along the way.