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Hey there, Barndo Friends!
So, you're all in on building your dream barndominium, huh? Well, before you get too far, let's talk about something crucial: finding the perfect plot of land. Because let's face it, not all pieces of land are a good fit for a barndo.
But what comes first? Your budget, your plans and prints, or, finding the right land.
Why not just pick a piece of land that's the right price and size, right?
Building a barndominium is a bit different from a regular house, and if you don't think it through, you could end up with some serious headaches later on.
Before we dive into land specifics, let's quickly touch on the other two factors: budget and prints/floor plans.
Why Budget Matters
Finances will have a very large impact on your overall barndo building project.
How much can you spend on land? Are you paying cash or getting a loan?
Having your finances in order first will allow you to determine how much you can budget for your land purchase.
The most common suggestion when budgeting for land is between 15-25% of your total building budget. For instance, if your budget is $500,000, you'd ideally want to find land costing between $75,000 and $125,000. Sticking closer to the lower end can save you some stress later.
In a recent Barndo Buzz survey, the majority of homeowners questioned, ran over budget on their total build costs. It is also estimated that the average cost overrun is at 10% or more of a total building project. So keeping the price of your land down will provide you with a financial cushion in the event your project does run over from completely unexpected events, like a comment from this homeowner:
Floor Plans and Blueprints
Now, onto the fun stuff: planning out your dream barndo! Your budget will largely determine what kind of land you can afford, and it'll also influence the size and design of your barndominium.
But, if you have a specific size or design in mind, then picking the right piece of property at the right price becomes even more important.
We recently saw a homeowner who had to set their building plans aside because the price they paid for their land left them with less than 50% of their total budget to be allocated to the cost of building their home, which was clearly not enough for the size and design of the plans that they wanted for their barndo.
Additionally, barndos tend to be big! So you will want to make sure that your ‘dream barndo plans’ will fit on your property and meet all proper zoning requirements for minimum acreage/lot size and setback requirements. (Minimum acreage and setbacks mean that you may need to have 1, 2, even 5 or more acres and setbacks mean that the footprint of your home has to be a specific distance from your property lines/boundaries.)
So don’t rely on price alone when selecting your land. You will want to make sure you consider other very important factors for your barndominium that could have gut wrenching consequences you may not expect.
Okay, now onto the land itself.
In just a few minutes, you’ll find out:
How to avoid costly land buying mistakes
How to make sure your land isn’t a ‘broken egg’
Is Buying Land The Chicken Or The Egg…What If The Egg Is Cracked?
Imagine you've found the perfect piece of land—great price, big enough for your barndominium.
But there's a catch: what if it has some ‘issues’.
As we mentioned above, there are many issues to consider when buying land for a barndo.
Two of the most common are:
Size – is it large enough to accommodate your dream plans and design?
Zoning-Building Codes – will your local municipality allow you to build a barndominium?
But there are also overlooked land considerations.
Many barndos are built in rural areas where access to utilities may be cost prohibitive or completely unavailable.
Recently we heard from a builder where their customers’ land had already been purchased and they were seeking an easement from a neighbor in order to gain utility access. If the neighbor refuses to grant the easement, running power to the property will cost an extra $25,000…a budget item that they simply were not expecting and can not afford.
And here is a common issue that is often missed: TOPOGRAPHY & SITE CONDITIONS
The price of certain pieces of property may look great at first, but once you ‘dig deeper’ (pun intended), you may find that your dirt, has its own ‘dirt’.
Just like utility availability, including deep wells, engineered septic systems or other expensive connections like long distances for gas or electric connections, the topography and site conditions of your land can really hit your pocket book.
For example, what if that perfect piece of land you find isn’t exactly flat?
In fact, it's pretty sloped, which means you'll need to do a lot of digging and leveling before you can even think about building.
In some cases, longer driveways, site preparation like tree and brush clearing, lengthy driveways for access to the property, soil conditions, retaining walls, falling elevations that require considerable excavation or fill, can all add up to large sums. Costs of 30%, 50% or even 100% or more of the land price can be incurred to properly prepare your land to build on.
All of a sudden, that flat piece of land with an open field that cost 10 or 20% more than property ‘priced as a deal’ may end up being the better bargain.
This extra work can really add up and might end up costing you more than expected. And remember, construction projects can end up costing more than you plan for already. So, that "great deal" on land might not be such a great deal after all if you have to spend a ton of money just to make it buildable.
FOR OUR VIP MEMBERS, we have saved you an extensive amount of time and research by preparing a complete Barndo Build – 29 Point Land Planning Checklist. This is a MUST HAVE if you want detailed descriptions of items to help ask the right questions when searching for land, including those that should involve an engineer, surveyor or attorney in order to make sure that you have thoroughly protected your investment and your dreams from time and money disasters like some of the examples mentioned above. COMING SOON!!!! We have added to the VIP Membership so that you can now access past issues of Barndo Buzz and all of it’s VIP info….
Barndo Build – 29 Point Land Planning Checklist
ACCESS
1. Do you have a deeded right-of-way to the property? Lenders will require recorded access. Who maintains the access roads to the property? Who is responsible for maintenance? If you are accountable, then do you have sufficient rights-of-way to service them properly? A 20 ft. minimum width is usually adequate for maintenance of limited-use private access rights-of-way. 40-60 ft. widths are generally acceptable for small to large subdivisions.
SEWAGE DISPOSAL
2. Will you be required to connect to a sewer system or stand alone septic system. Review costs of each system separately, from connection fees and installation for municipal systems, to septic tanks and drain fields for stand alone systems. Municipal systems will also have ongoing monthly/quarterly/annual fees so it is important to consider the long term cost of this type of system as well. For stand alone, review the need for a percolation test and who will pay for it - you or the seller? Stand alone sewage disposal systems are generally less costly. Buy land subject to your approval of the current health permit, or pending your satisfaction with the results of a "perc" test. If a property is unable to “perc”, alternative solutions may be available but at substantially higher costs.
EASEMENTS
3. Are there any objectionable easements or encroachments on the land? Are they serious enough to cause you to reject the purchase of the property? One quick way to identify potential easements prior to completing a survey is to review a title commitment and see if any recorded easements appear in title.
FLOODS
4. Is your building site exposed to potential flooding, earthquakes, sinkholes, underground caves, caverns, or mining shafts, and can the site be made relatively safe from undue exposure to other surface natural disasters such as landslides, hurricanes and tornadoes.
WELLS
5. What are the depths of existing wells in the area? Without a municipal water source of supply, you need be concerned about well drilling costs and the availability and potential volume of underground water to supply your needs. How large of a well pump will you need to satisfy your housing requirements? Review the cost of drilling a well – they are typically charged by feet and deep wells can become expensive. Some areas may also require that a well is installed prior to completion of the property sale to ensure water accessibility, otherwise known as a well first area.
MINERAL RIGHTS
6. Who controls the mineral rights? Water rights? Is this information spelled out in the contract and deed? Many early reservations of mineral rights in the chain of title turn out to be of little or no consequence in a fast-moving society. Consult with your attorney.
UTILITIES
7. Are electric, internet and/or gas lines available? If not, how much will it cost to bring in service? Can the required easements be obtained to run in these lines? What will be the end user costs?
SURVEY
8. Is there a recent survey? If not, will the seller guarantee the acreage within, say, 5-10% if you commission a survey? Will there be a price adjustment if the acreage called for in the deed is deficient? If possible, and particularly if you pay for the survey, you will normally not want to pay more if you get more. If the survey costs are split, or if the seller pays, there will likely be a price adjustment up or down if the surveyed acreage differs from the deed description. A recent survey is advised so you're satisfied with acreage and property lines. Confirm the price of full survey – there is often a surprise associated to the cost of complete land surveys.
ADVERSE POSSESSION
9. Can you foresee any claims of adverse possession? Land ownership can be claimed against the real owner (you) through a claimant's reliance on the law of adverse possession, wherein, under color of title, he claims he has established actual, open, notorious, exclusive, and continuous possession for a statutory period. This situation can occur on remote or abandoned land where absentee owners fail to correct unwarranted changes in boundary lines or to assert their right of ownership. Do the surrounding owners agree with your survey? Have there been any disagreements over existing boundaries of fence lines?
LIFESTYLE REQUIREMENTS
10. Does the property provide you with the privacy or space for your lifestyle requirements such as large family gatherings with plenty of parking, adequate distance from neighbors, room to ride/drive ATVs or recreational vehicles, space and/or soil conditions/terrain for gardening/homesteading or hunting?
DETRACTIONS
11. Are there any adverse influences present in (or planned for) the area of your purchase which could affect your enjoyment of the land, or which may have a negative impact on land values? Examples of this type of detraction are nearby high-volume land fills, large-scale hog and poultry operations, timber clear-cutting on a reckless scale, municipal sewage treatment plants, junk yards, industrial pollution, shooting ranges, rock quarries, etc.
ZONING – BUILDING CODES
12. Is the land properly zoned for your barndo build? Check the latest local zoning ordinance and confirm your findings with the zoning administrator and your attorney. Also check on local building codes and their “friendliness”, or lack of, to barndominium construction. Are there minimum acreage/lot size requirements? What are the possible setback requirements for smaller parcels?
SUB-DIVIDING
13. If you intend to buy a larger parcel and split off additional pieces, will you be able to subdivide the land according to your needs and expectations? Check the latest local governmental ordinances and confirm your findings with the local agencies, and consult with your attorney. You may also want to employ the assistance of a surveyor familiar with local regulations at the onset of your research.
RESTRICTIONS
14. Are there any restrictions on the land? If you are buying land in a subdivision or a community with a Home Owners Association (HOA), you will generally be confronted with a set of "protective covenants" which spell out what you can, and cannot do, with the land, and what guidelines are set down for building construction. If you are buying land that is not subject to a list of restrictions, check to see if any limitations are incorporated in the deed, which will restrict your use of the land. For example, some sellers convey their land with a prohibition against using the property to store junk cars; or the deed may forbid timber harvesting; other sellers have imbedded "scenic easements" in their deeds, restricting construction and further development.
ASSESSMENTS
15. Will you be confronted with any assessments, such as road maintenance fees? When buying in a subdivision, private community or even on a public road, periodic assessments may be imposed. You can also include language inside your purchase agreement to confirm how an assessment may be handled.
LOCATION
16. How important is it for you to be close to a town or city? Shopping? Doctors? Schools? Police? Fire protection? Lack of proximity to these basic municipal services generally causes discomfort for many land buyers and can depress land values in some rural areas.
SPECIFIC PERFORMANCE
17. Is there a provision in the contract preventing the seller from backing out? Do you have a loophole or two built into the contract so you can get out of it if you want to? Consult with your real estate agent or attorney about your concerns so appropriate language can be drafted for the contract.
TAXES
18. Will real estate taxes be prorated at closing? Have you researched the millage rates applicable to the area you are building in and what the estimated assessed value of your property or home will be after you build on the property? Are there new millage rate hikes on proposed ballots or in the future that could impact the current rates?
TITLE
19. Are there defects on the title? If so, can they be cleared up before closing? Can you obtain title insurance? If closing is extended, what effect will this have on your plans? Have all previous mortgages been discharged?
FINANCING
20. Is your financing lined up? Are the loan terms and conditions clearly spelled out, and are these provisions comfortable for you? If the owner is financing the sale, will you get an immediate deed? Can a deed be held in escrow? If there are transfer taxes to be paid upon the land contract pay-off, who is responsible for paying them? If you're buying on a land sales contract, or contract for deed, you will want the contract recorded in the local courthouse to prevent the seller, his heirs or assigns from (1) imposing further encumbrances on the land, and/or (2) selling the land to other buyers, whether by intention, or inadvertently. Plus, you'll need to be kept up-to-date on your real estate taxes. Without a courthouse record of ownership, you may not receive your tax bills, and your land could be sold, without your knowledge, for back taxes.
CLOSING COSTS
21. Will there be closing costs associated with your purchase, either costs that the seller requests you to pay or from having to secure lot financing? If so, what are those amounts?
PREPAYMENT
22. Have you protected yourself against prepayment penalties if you are financing the land?
TOPOGRAPHY & SITE CONDITIONS
23. Is the property flat or does it have gentle or extreme variations in the change of elevations or slopes? Will you need an extended driveway with material such as crushed stone developed for a base? Will there need to be additional costs factored in for tree and/or brush clearing? Are the soil conditions satisfactory for your project – will you need to conduct soil evaluations and if so do you have them factored into your budget? Will steep slopes or changes in elevations require you to construct retaining walls? Will extensive excavation costs for moving dirt or creating a flat surface for your building footprint be required? Is the size of the property large enough to accommodate all of your barndo building plans and designs, including possible future outbuildings?
APPROVALS - TIMING
24. Is your purchase contract subject to obtaining approvals from local governing bodies? If so, have you allowed yourself enough time to get through the red tape? To begin planning your build, how long does the permitting process take in your area?
GIFTS
25. If you are receiving your property as a gift, have you completed all of your research, just as if you were buying, to ensure that your future building plans will not be compromised? If you are obtaining financing for your construction, have you consulted with your lender to see how ‘gifted property’ is treated in regards to your construction loan?
RELEASES
26. If your land you are buying is part of a larger parcel, has the land been properly approved from local municipalities and released from any overlying mortgages or liens? When you receive a future property tax bill, will that bill be based on the current lot itself, or will it be part on an allocated portion of the larger parcel? For tax pro-rations, will there be adjustments for the unallocated portion of the original parent parcel that you will have to pay?
SITE DISTANCE
27. Does your local municipality require that your property entrance or driveway have the proper site distance to oncoming traffic? In other words, do you need a driveway permit?
DRAINAGE OUTLET
28. Barndos are typically built on one level without a basement, with a concrete slab onsite. This makes your home susceptible to low elevation areas where water pooling may occur or water drainage may be impactful. Does the property consist of high enough building ground or does the property allow for adequate space for excavation to provide sufficient drainage?
In addition, for denser population areas, drain commissioners may require that all storm water outlets have direct access to a county drain or state-designated water course, otherwise a drainage easement may be required from your adjacent downstream neighbor.
NEIGHBORS
29. Have you met the neighbors? Neighbors can be lifetime friends or potential long term challenges to living in your home.
This checklist provides general guidance and should not replace advice from professional engineers, land surveyors, real estate agents or attorneys. Users utilize this checklist at their own discretion and risk. Specific requirements may vary depending on the project location and local laws, rules, and regulations.
To Happy Barndo Living!
-The Barndo Buzz
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