Building a New House? Here are the steps involved in acquiring a lot to build a new house.
If you are thinking about building your own home, you will need to acquire title to the land where you intend to build. Each county and township in Ohio have different requirements when it comes to acquiring a lot to build a house. This blog post covers the basic steps you should take in acquiring a lot for the construction of a new home (i.e. where no existing building and septic system is present) in the counties in which we serve.
STEP 1 – CHECK WITH THE COUNTY HEALTH DEPARTMENT AND THE COUNTY PLANNING COMMISSION
We always recommend that buyers contact their county’s health department and planning commission as the first step to acquiring a lot. Buyers should explain to these two agencies where they intend to build and get information about the minimum lot size requirements, site evaluation requirements, easement requirements, and whether the lot you are proposing can in fact be split. Some counties have restrictions on the number of lots that can be split off a farm. While the townships may have minimum lot size requirements, the health department will ultimately have to approve your septic system, so you want to make sure that the lot that you acquire will work for this purpose.
STEP 2- FIND A WILLING SELLER, NEGOTIATE THE TERMS, AND GET A PURCHASE CONTRACT PREPARED AND SIGNED
Most building lots are purchased with cash, but some of them are purchased with financing from a lender. Talk to your construction loan officer about their preferences ahead of time.
Many clients come to the lawyer after they have negotiated the terms but find out that they often did not cover all of the necessary terms, which leads to confusion and disagreement as to who pays what at closing. If you would like assistance with this part, contact the Law Office of Amber L. Niese, LLC for a county specific questionnaire/checklist before discussing the terms with the other party.
While there are some costs that are “customary” based on the county, everything is always negotiable. For instance, generally:
(a) taxes are prorated through the date of closing;
(b) the buyer pays a closing fee, the recording fee for the deed, any CAUV recoupment if the lot is part of a large parcel of agricultural property, and the costs to process any required new surveys with the planning commission and health department; and
(c) the seller generally pays for the conveyance fee to the county auditor, the costs to have the deed prepared, and the costs to have any of their mortgage/liens released.
The customary type of evidence of title (i.e. a title search) and who pays for this varies from county to county. Additionally, the need for and the costs of any easements (ingress/egress to the lot and/or septic outlets) should be referenced in the purchase contract. If the lot is part of a farm, depending in the time of year and the size of the lot, the existing crops may need to be addressed. Another term that should be determined is who will pay the survey costs if necessary, which also differs from transaction to transaction.
STEP 3 – OBTAIN A SURVEY IF THE LOT IS PART OF A LARGER PARCEL OF LAND
If the lot already exists in the exact acreage that you need then there is no need for a survey. Nevertheless, most new building lots in this area are part of a farm or a larger parcel of land, which necessitates a new boundary survey from a professional surveyor. You can search the applicable county’s GIS system to make this determination. In Putnam County, it is important to contact the health department before the surveyor goes out for the field work.
While we work with all of the local surveyors, the Law Office of Amber L. Niese, LLC is located at the same location as NIESE SURVEYING & ENGINEERING, LLC, which is solely owned and operated by Amber’s husband, Justin H. Niese, P.E., P.S., C.F.M. The teamwork and collaboration of the two separate businesses offers an efficient and cost-effective process from start to finish. If you wish to utilize the services of both businesses for your real estate work, please review the disclosure statement which is posted at the office and is also reviewed with each client utilizing both businesses.
The surveyor will perform the field work to set new pins, draw up a plat showing the new boundary lines, and generate a new legal description for the lot. The legal description is what the attorney needs to prepare a new deed. Again, county and township requirements dictate what needs to be done with the plat based on its acreage. The Law Office of Amber L. Niese, LLC typically processes the plat to the appropriate government agencies on behalf of clients.
For example, in Putnam County the plat for any new lot under five acres requires a notarized signature from the landowner, signatures of township trustees, the health department, the planning commission, and the engineer’s office. Before the health department will sign a plat for a development lot (i.e. a new building lot), you need to have a site evaluation/soil testing done for your septic system. Once the health department has signed the plat, then it must sit at the planning commission for 10 days. Then the fee can be paid to the planning commission and the plat can be recorded with the Recorder’s Office. In Henry County, the plat for a lot under 5 acres goes directly to the planning commission with an application fee and the plat does not get recorded.
STEP 4 – CLOSE ON THE TRANSACTION
The closing refers to the date where possession of the land switches from buyer to seller. Before closing you will get a settlement statement that is prepared in accordance with the purchase contract detailing who pays the costs associated with the transaction and the exact amount of money that the buyer needs to provide at closing. The closing can be held at a location convenient to the parties. The Law Office of Amber L. Niese, LLC can handle the closing in our office in Miller City, but we also meet with parties outside of the office if needed. Documents can also be mailed for signature if a party to the transaction is from some distance away or a power of attorney on behalf of a party could be used depending on the circumstances.
After you have title in your name and you have placed your septic system in, depending on the layout of your lot, an easement may be required for the septic outlet. This will often necessitate a new description be prepared by a surveyor for the easement area and an easement drafted by an attorney that gets recorded in the public records. In Putnam County, your septic system will not get approved by the Health Department until this step is completed.
Contact the Law Office of Amber L. Niese, LLC today for assistance with buying or selling real estate for the construction of a new home.