Buying land or a lot can be an exciting and potentially rewarding investment. Whether you plan to build your dream new construction home or hold it as an investment, the decision to purchase land is not one to be taken lightly. One critical step in the land-buying process that often goes overlooked is the feasibility study contingency. In this article, we’ll delve into why a feasibility study contingency is crucial when purchasing land and how it can protect your investment.

Understanding the Feasibility Study

A feasibility study is an in-depth analysis of the property’s potential uses and limitations. It provides prospective buyers with valuable information that can help them make an informed decision. The feasibility study typically covers various aspects of the property, including:

Zoning and Regulations: Local zoning ordinances and regulations can significantly impact how the land can be used. A feasibility study will investigate the current zoning of the property and any potential changes that might affect your plans.
Environmental Considerations: The study will assess environmental factors such as soil quality, potential contamination, flood zones, and any other environmental restrictions that may affect your development plans.
Utility Availability: It’s essential to determine the availability of utilities like water, sewage, electricity, and gas on the property. The feasibility study will help identify any costly infrastructure requirements.
Land Topography: The topography of the land can influence the cost and feasibility of construction. Steep slopes, for example, may require costly grading or engineering solutions.
Cost Estimates: Feasibility studies often provide cost estimates for development, including construction costs, permits, and any required site improvements.

Why Feasibility Study Contingency is Needed

Now that we’ve covered what a feasibility study entails, let’s explore why it’s essential to include a feasibility study contingency in your land purchase agreement:

Risk Mitigation: Investing in land carries inherent risks, and a feasibility study helps you identify and mitigate these risks. If the study reveals unforeseen issues that would make your project unfeasible or cost-prohibitive, the contingency allows you to back out of the deal without financial repercussions.
Informed Decision-Making: A feasibility study equips you with the knowledge needed to make an informed decision. Without it, you might discover costly obstacles or limitations after the purchase, leading to financial losses and frustration.
Negotiating Power: Having the results of a feasibility study gives you leverage in negotiations. If the study uncovers significant challenges, you can use this information to renegotiate the purchase price or terms.
Financing Approval: Lenders often require a feasibility study before approving a loan for land acquisition and development. Including a contingency allows you to secure financing with confidence, knowing that potential obstacles have been identified and addressed.
Protecting Your Investment: Buying land is a substantial investment. A feasibility study contingency ensures that you protect your investment by minimizing risks and unexpected costs.

In Conclusion:

In the world of real estate, knowledge is power. When buying land or a lot, a feasibility study contingency is your shield against unforeseen challenges and financial pitfalls. It empowers you to make informed decisions, negotiate effectively, secure financing, and ultimately protect your investment. Remember, the cost of a feasibility study is a small price to pay for the peace of mind and financial security it can provide in the long run. So, before you embark on your land-buying journey, make sure to include this critical contingency in your purchase agreement. Your future self will thank you for it.

Buying a Perfect Lot for Your New Home

Please Scroll to the bottom of the page to view Land & Lots available for sale. For an inventory of “off market”, “pocket”, and “private” listings, please Contact Me directly.

Whether you are looking to build a spec or a custom new home in Northern Virginia, you will not be able to bring your dreams into reality without first finding and buying a perfect lot.

Hopefully by now, you’ve decided on the location, the size of your new home, and selected a reputable local builder. Now it’s time to find a perfect lot for your new home. l BBuBuy Lot in Vienna VA.

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Lot & Land Purchase Contract: 8 Questions to Ask Before Submitting an Offer

Before writing an offer and presenting your contract to purchase, you should be aware that land purchase requires extensive buyer due diligence. Most of the sellers won’t have all the answers, so it’s imperative to investigate all potential issues thoroughly until you become confident in the purchase. In addition, Virginia is a caveat emptor (buyer beware) jurisdiction that means that the sellers of realtors in Virginia are not necessarily required to fully disclose all property defects when you buy the property.

As your real estate agent, I’ll do everything in my power to collect as much information on the parcel as possible, including visiting County Offices and talking to the sellers’ agent. All gathered information will allow you to vet the property and will become a powerful tool during the negotiations.

After the preliminary “home work” on the property has been completed, and all available information is gathered, you still might have some unanswered questions about the land. In order to make sure that no unpleasant surprises await you after the sale, the contract should include Feasibility Study contingency.

Feasibility Study will allow you to have sufficient time to inspect the property and uncover all potential issues. You should consult your realtor and an engineer on the length of these contingencies.

Asking these eight questions might help you to decide what contingencies would become a part of your Land Purchasing Contract:

❶ What utilities are available on a prospective Lot?

Utilities on the property, such as water, gas, sewer, will fall under two categories: Public and Private or a combination of both.

Your realtor will research whether the water source and sewer are maintained privately or publicly; and if there is a gas line or propane tank installed. Are the hookups complete and capacity adequate?

All lots can be divided into these categories:

• With all public utilities available on site (gas, water and sewer);

• Only gas line; public water or sewer;

• Or without any public utilities.

Properties with public sewer, water and gas line are easy to deal with and should not cause a concern – the new home is built, and the utilities are connected to a house.

When public utilities are not available, your new home will be serviced by private septic system, propane gas tank and well water. You, as a buyer, have to decide if the maintenance of all the utilities would become a burden. For example, you would have to make sure to schedule inspections of the septic system and test well water quality on the annual basis.

❷ Was the potential lot approved for a septic system?

This is very important. Often the lot looks beautiful and priced right, but no septic can be installed. The reason? A soil study that includes soil percolation test, doesn’t allow for it.

A house cannot be constructed without a septic system approved by the Fairfax County’s Health Department! Please read more about septic systems here. The last thing you want to do is to purchase a lot and find out later that the construction of a new home is unachievable.

❸ Will water supply be public or come from a private well?

The water for your new home may come from a well or from a local water company. The drilling and installation of water well will have to be approved by the Fairfax County’s Health Department. If there is no public water, before purchasing a lot, you have to make sure well water is available. A water well has to be located 50 feet away from the septic system.

❹ Is the lot/land located in flood Zone?

It’s also a good idea to check the flood plain status of the property, as this will impact availability and cost of flood insurance. An experienced engineer that works closely with the builder will be able to check property’s records and confirm.

❺ Would you have to use a private road?

If the lot is located on the private road, the contract to purchase a lot has to include a recorded easement providing adequate access to the property.

❻ Have you checked for Restricted Protected Areas?

The lots with Restricted Protected Areas or RPAs have very restrictive rules and regulations – no construction or installation of the utilities will be allowed beyond RPA’s border line. Often, very large lot – 5 acres+ might only have 1 acre of usable or buildable land. Please review property’s plat for the existence of the RPA lines.

❼ Are there any protected tree species?

If there are a lot of trees on the lot, you will have to make sure that none of those trees are protected species. If the trees are protected, your builder will not be able to cut them down in order to clear the area for the construction of the house. In addition, subdivision’s HOA by-laws might restrict your ability to cut trees and clear the building site.

❽ Did you obtain land’s survey or plat?

In addition, you will have to check the final survey of the land, check on easements for gas lines, electrical and county roads, make sure there are no Conservation areas, and check on Building Restriction Lines or BRLs and, if needed, locate a place for a propane tank.

How and Where Do You Find Lots & Land for Sale?

Where do you start looking for the right building lot? In Northern Virginia, majority of building lots are listed on the local MLS. Please seek assistance of your real estate agent for most up to date list of lots available for sale. Your realtor will not only locate the lot that matches your criteria, but also will take you through steps necessary to make sure that the lot you are purchasing is buildable.

When buying a lot in Northern Virginia, you have two choices:

1. Buy a “teardown” property in “as-is” condition and use land to build a new home.

2. Buy unimproved or raw land.

Bottom Line:

Once you find a lot that matches your criteria, start investigating. With the help of your agent and experienced engineer and builder, review a plat, and all the documents that are available at Fairfax County’s Health Department.

If you are ready to start looking for a lot in Vienna VA, McLean VA, Great Falls VA or in Falls Church VA, and would like to learn more, please feel free to contact me to set up a consultation. Buy a perfect lot for your new home in Vienna VA, McLean VA, Great Falls VA with Natasha Lingle

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The Crucial Role of Feasibility Study Contingency When Buying Land in Northern Virginia