Expert: Dick Dennis - 4/25/2008

Question
Hello, I recently purchased vacant land with a construction loan to
build a home. Because of the fact that I am going to build a home, I did
not have to pay any money down. My question is very basic, but I can't
find any info. on the internet on it. Can I sell the land before I
build a home on it? Do I actually own the land, as it was purchased with
the plans of building a home. I of course have the deed to the land, but
am still paying only interest payments as I have not built a home yet.
I have not even started. I still want to build a home, but I have found
a better piece of land, that would cost almost exactly the same as
what I could sell this one for. I realize that this is of course assuming
that I could sell it very quickly as there is a time frame that the
home has to be built in(at least progressing). So let's assume I could
sell it and close within a few weeks. Could my loan be rolled over onto
the new property, since it would be the same amount and as long as
everything checked out(appraisal, building permits, etc.)?
Thank you very much for your time and any info. would be greatly
appreciated.
Sincerely,
Clint

Answer
You might try to put the whole package together, loan, land and plans, etc., and sell it at a very good price for the buyer. Otherwise you may be stuck with it while waiting to be able to buy the other land parcel. In this kind of market, there are people out there who can probably find a better deal by finding a foreclosure someplace. Builders are offering very good discounts to entice buyers, too. So, you do have lots of competition. Just know that the buyer who considers your package must qualify with the lender. Buyers are finding it more difficult to qualify for loans these days unless he had a nice big down payment. Then almost any bank would approve him. I wish you well.

Dick Dennis