Introduction to Purchasing Raw Land/Lot
Purchasing raw land in North Georgia can be a rewarding investment, but it requires careful planning and understanding of factors like zoning, setbacks, utility access, and environmental regulations. As real estate professionals, it’s essential to guide clients through these aspects and provide insights on local regulations and contingencies. By staying informed, you can help ensure successful land transactions in this dynamic region.
Understanding and Conducting Level 3 Soil Tests
A Level 3 Soil Test (also called a percolation test) determines how well soil absorbs water, which is crucial for septic system approval.
Why It’s Important:
- Determines if a property can support a septic system.
- Poor drainage can make land unbuildable or require expensive alternative septic systems.
How to Conduct a Level 3 Soil Test:
- Hire a professional – Contact a certified soil scientist, engineer, or local health department.
- Schedule the test – Availability may affect timing (10 days to 8 weeks lead time).
- Ensure site access – The area must be clear for testing.
- Review results – Helps determine the best septic system for the property.
Time & Cost:
- Typically takes 3–7 days to complete.
- Costs range from $500–$1,500, depending on property size and soil complexity.
Best Practice:
Buyers should complete this test early in due diligence to avoid costly surprises.
Companies Offering Level 3 Soil Testing Services
Summit Soil Consulting
Specializes in Level 3 soil testing for septic systems in North Georgia, including the Atlanta metropolitan area.
Phone: 770-965-1617
Email: [email protected]
Address: 853 Ray Palmer Rd, Cleveland, GA 30528
Website: summitsoil.com
Mill Creek Environmental
Offers Level 3 and Level 4 soil analysis for residential and commercial real estate transactions and septic system permits.
Phone: 706-579-1607
Email: [email protected]
Address: 4055 Highway 53 East, Dawsonville, GA 30534
Website: millcreekenvironmental.com
Using GIS Websites
GIS (Geographic Information System) websites help locate essential details about raw land properties, including:
- Public utilities
- School zones
- Flood zones
- Zoning classifications
- Property boundaries
Why Use GIS?
- Helps assess development potential and identify challenges like lack of utility access or environmental restrictions.
- Allows agents to overlay zoning maps with utility layers to flag "unbuildable" lots.
Georgia-Specific GIS Resources:
- Fulton County GIS
- Gwinnett County GIS
- Cherokee County GIS
- DeKalb County GIS
- Statewide Access (qPublic.net)
Best Practice:
Agents should familiarize themselves with these tools to provide accurate insights and streamline due diligence.
Zoning Regulations
Zoning laws control how land can be used, affecting property value and development potential.
Common Zoning Types:
- Residential – Homes, apartments, townhouses.
- Commercial – Businesses, retail spaces.
- Agricultural – Farms, large rural lots.
- Mixed-Use – Combination of residential and commercial.
Why It Matters:
- Restricts what can be built (e.g., no commercial buildings in residential zones).
- Limits density (e.g., how many homes per acre).
- May impose architectural guidelines (e.g., historical preservation rules).
Where to Check Zoning Information:
- Fulton County GIS
- Gwinnett County Zoning
- Cherokee County Planning & Zoning
- DeKalb County Zoning Maps
Best Practice:
Verify zoning early in the transaction to ensure the property meets the buyer’s intended use.
Land Financing Overview
Financing raw land differs significantly from traditional home mortgages, posing unique challenges for buyers.
Key Differences from Home Mortgages:
- Higher interest rates – Typically 5% to 8%.
- Larger down payments – Usually 20% to 50%, depending on the lender and land use.
- Shorter loan terms – Typically 5 to 20 years, but some lenders offer up to 30 years for well-qualified buyers.
- Higher risk for lenders – No existing structures make financing more complex.
Where to Secure Land Loans:
- Local banks
- Credit unions
- Specialized land lenders
How to Improve Approval Chances:
- Provide detailed development plans for the property.
- Get pre-qualified early to set realistic expectations.
Builder Relationships
Strong partnerships with builders benefit agents specializing in raw land by providing referral income and valuable connections for buyers.
Benefits of Builder Relationships:
- Builders often pay referral commissions (1–3% of project costs) for land leads.
- Enhances your value to buyers by connecting them with trusted builders.
How to Build Strong Partnerships:
- Attend local builder meetings and networking events (e.g., Georgia Home Builders Association).
- Create formal referral agreements to outline expectations and commissions.
- Share market insights and comps to showcase your expertise.
- Collaborate on marketing efforts (e.g., co-hosting land-buying seminars).
- Maintain regular communication to stay top-of-mind.
Cost Comparisons and Comps for Land
When evaluating land comparables (comps), it’s important to review recent sales of similar properties while considering unique factors that affect value.
Challenges of Land Comparisons:
- Land is inherently unique—no two parcels are exactly alike.
- Direct comparisons can be difficult due to varying terrain, location, and features.
Key Factors Affecting Land Value:
- Location & Accessibility – Proximity to roads, highways, and amenities.
- Utilities Availability – Access to water, sewer, and electricity impacts cost.
- Topography – Flat, buildable lots are more valuable than steep or uneven terrain.
- Zoning & Development Potential – Restrictions may limit use and impact value.
- Market Demand – The desirability of the area affects pricing trends.
Public Sewer vs. Septic Systems
Choosing between public sewer and septic systems involves important considerations related to cost, maintenance, and long-term usability.
Public Sewer Systems:
- Connects to municipal wastewater treatment facilities.
- Requires minimal homeowner maintenance.
- Typically available in urban and suburban areas.
Septic Systems:
- Self-contained system with a tank and drain field.
- Requires regular maintenance and monitoring.
- Common in rural and semi-rural areas of North Georgia (60-70% of homes).
Cost Considerations in North Georgia:
- Conventional Septic System: $3,000 – $10,000.
- Non-Conventional Septic Solutions (for poor soil conditions):
- Aerobic Treatment Units (ATUs), Mound Systems, Sand Filters
- Can cost $15,000 – $30,000+.
Impact on Property Value:
- Homes requiring expensive alternative septic systems may have lower market appeal.
- Sewer-connected properties may be more attractive to buyers due to convenience.
Budgeting for Land Purchases
When budgeting for land, it’s important to consider all potential expenses beyond just the purchase price. Development costs can significantly impact the total investment.
Land Clearing Costs:
- Removing trees, brush, and stumps: $1,500 – $6,000 per acre.
- Debris removal options:
- Burning – Cost-effective but may require permits.
- Hauling away – More expensive but cleaner.
- Grinding stumps on-site – Mid-range cost option.
Utility Installation Costs:
- Running underground water, electricity, and gas: $10,000 – $30,000+.
- Costs depend on distance to existing lines and installation complexity.
Septic System Costs:
- Conventional system: $3,000 – $10,000.
- Non-conventional (e.g., aerobic treatment units, mound systems): $15,000 – $30,000.
Surveying
Surveying is crucial to ensure accurate property boundaries and compliance with legal requirements.
General Survey Costs in North Georgia:
- Residential property surveys: $500 – $8,000 or more (varies by land size and complexity).
Types of Surveys:
- Boundary Survey:
- Establishes property lines.
- Essential for residential properties to avoid disputes and confirm ownership.
- ALTA/NSPS Survey:
- Required for commercial properties.
- Adheres to national standards and includes boundaries, easements, encroachments, and improvements.
Recommended Surveyors in North Georgia:
- Smith Land Surveying – 770-555-1234
- Georgia Land Professionals – 678-555-5678
- North Georgia Surveying Co. – 706-555-8901
Identifying Land Use Intentions
Understanding a buyer’s land use intentions helps ensure the property aligns with their goals and avoids complications.
Common Land Uses:
- Residential: Single-family homes, multi-family housing.
- Commercial: Retail, office space, industrial developments.
- Agricultural or Recreational: Farming, hunting, or conservation.
Key Factors to Consider:
- Zoning regulations – Does the land meet the buyer’s intended use?
- Utility availability – Will water, electricity, and sewer connections be needed?
- Accessibility – Does the property have road access or easements?
Essential Questions to Ask Buyers:
- “What type of structure do you plan to build?”
- “Do you have a timeline for development?”
- “Are you aware of zoning restrictions or environmental considerations?”
Water Wells
Water wells provide independence from public water systems but come with costs and maintenance responsibilities.
Benefits of Wells:
- Self-sufficient water source.
- No monthly water bills.
- Often yields high-quality water.
Challenges and Costs:
- Drilling Costs: $5,000 – $15,000 (varies by depth, soil composition, and equipment needs).
- Potential Issues:
- Fluctuating water levels – May affect water supply.
- Contamination risks – Requires regular testing and filtration.
- Ongoing maintenance – Pumps and filtration systems may need repairs or replacement.
Usage Statistics in North Georgia:
- 40-50% of homes use wells.
- For properties over 1 acre, well usage increases to 70-80% due to rural locations and limited public water access.
County Setbacks
County setbacks are zoning regulations that determine how far structures must be placed from property lines, roads, and other boundaries.
Typical Setback Requirements in North Georgia:
- From the road: 25-50 feet
- From side property lines: 10-20 feet
- From the rear property line: 20-30 feet
Important Considerations:
- Driveways and walkways are usually exempt since they are non-structural.
- Setbacks vs. Buffers:
- Setbacks regulate building placement.
- Buffers are designated areas (often vegetated) to separate different land uses (e.g., residential vs. commercial).
Georgia Streams and Buffers Act (2005)
This law restricts development near waterways to protect water quality and ecosystems.
Key Restrictions:
- 25-foot vegetative buffer required along most state-defined streams, rivers, and wetlands.
- 50-foot buffer required for trout streams.
- Prohibited activities within the buffer:
- Construction
- Land clearing
- Soil disturbance
Impact on Land Development:
- Reduces usable land and may require site plan adjustments.
- Local ordinances may impose additional setbacks for structures, septic systems, and driveways.
Easements and Landlocked Properties
An easement is a legal right that allows someone to use another person’s land for a specific purpose, such as access, utilities, or drainage, without owning it.
Where to Check for Easements:
- County deed records
- Plat maps
- Title reports
Landlocked Properties:
- Landlocked properties have no direct access to a public road and require an easement for entry.
- These are fairly common in Georgia, especially in rural areas where land has been divided over time.
Impact on Property Use:
- They may restrict development or limit how the land can be used.
- Property values can be affected, especially if access or usage is limited.
Land Conservation Act Agreements
Land Conservation Act agreements, also known as conservation easements or covenants, are crucial tools for preserving agricultural land, protecting environmental resources, and maintaining open spaces.
Key Considerations:
- Duration: The minimum term is typically 10 years, though some jurisdictions offer 20-year contracts.
- Running with the land: These agreements remain in effect even if the property changes ownership.
- Conveyance: Potential buyers must be willing to continue the covenant or face penalties.
- Minimum acreage: Requirements vary by location (10–25 acres or more).
- Termination and costs: Early termination often incurs significant penalties.
Submitting and Writing Offers on Land Lots
When purchasing land in Georgia, using the correct forms and gathering key documents can streamline the process.
Essential Georgia Association of Realtors (GAR) Forms:
- GAR Form F213 – Purchase and Sale Agreement for Land.
- GAR Form F307 – Seller’s Property Disclosure (if available).
Key Documents to Request from the Seller:
- Recent Surveys (dated within the past five years).
- Level 3 Soil Test (Perc Test).
- Zoning Confirmations.
- Title Reports & Easement Agreements.
- Environmental Assessments.
Land/Lot Contingencies
Contingencies protect buyers by allowing them to withdraw or renegotiate if certain conditions aren’t met.
Common Contingencies:
- Financing – Ensures loan approval before commitment (typically 30–45 days).
- Inspection/Due Diligence – Evaluates soil, environmental concerns, and zoning feasibility (10–14 days).
- Zoning Verification – Confirms that intended land use is permitted.
- Title Clearance – Ensures there are no ownership disputes or liens.
Recommended Raw Land Lenders in Georgia
Below is a curated list of lenders specializing in raw land loans in Georgia, along with their contact details and key features.
AgSouth Farm Credit
- Phone: 866-940-2265
- Website: www.agsouthfc.com
- Details: Specializes in rural and agricultural land loans.
Georgia United Credit Union
- Phone: 678-385-5000
- Website: www.georgiaunitedcu.org
- Details: Flexible land loan programs with down payments as low as 20%.
Synovus Bank
- Phone: 888-796-6687
- Website: www.synovus.com
- Details: Offers raw land loans with terms up to 15 years.
United Community Bank
- Phone: 800-245-0409
- Website: www.ucbi.com
- Details: Local community bank with land loan options.
Farm Credit Associations of Georgia
- Phone: 706-769-5647 (West Georgia) | 229-273-0755 (South Georgia)
- Website: www.farmcreditgeorgia.com
- Details: Focuses on rural land, farms, and recreational properties.
State Bank and Trust Company
- Phone: 912-764-9000
- Website: www.statebt.com
- Details: Offers lot loans with competitive terms; serves metro Atlanta and coastal regions.
Local Credit Unions
- Delta Community Credit Union (Atlanta): 800-544-3328 | www.deltacommunitycu.com
- Robins Financial Credit Union (Warner Robins): 478-923-3773 | www.robinsfcu.org
Tip for Agents:
- Pre-Qualification: Advise buyers to confirm the lender’s service area and requirements (e.g., land use plans, road frontage).
- USDA Loans: For rural lots, explore USDA Section 523 loans (Georgia USDA Rural Development, (706) 546-2162).
- Seller Financing: Some sellers offer direct financing—ask for terms during negotiations.
Note: Loan terms, rates, and down payments vary. Always recommend buyers compare multiple lenders.