Buying or Selling a Home/Land Lot Contigencies



Greetings. Question for you...I am a potential buyer for a land lot that I'm looking to build a home.  I'm relocating due to a company transfer and through the relocation process, my company has assigned me with a realtor.  It doesn't appear he is well versed on the build side of things but that's okay I guess (I don't mind him gaining some experience through his experience in my transaction as that's just how it goes sometimes).  With that said, for the purchase of the land lot, I want to make sure I cover my ASSets.  My realtor says land is sold as is and you get what you get.  Others have stated, I need to ask for a few contingencies in the sales agreement that allows me to back out if it doesn't smell right or the costs to build on the property are too high. Specifically, I have been advised to include contingency that the property be able to pass a perc test, to specify a rock clause that the seller agrees to pay a portion of the rock blasting/excavation if it is found (not to exceed a certain amount), land survey marking the boundaries.  Is there anything else that should be included in the offer to purchase the home? I hope all of that was understandable :)

Hey, Darnell.

Generally, very generally, undeveloped land is sold as is but in real estate, all things are negotiable. I'm a little confused, though, because your first sentence indicates that you're buying land on which to build a home. Your second-to-the-last sentence says " the offer to purchase the home?" I'm going to presume "home" there should be "land."

Everything you've mentioned can be included in the purchase offer as contingencies but if I were the Seller, I'd tell you to take a hike if you wanted me to pay anything at all once you started building your home. I'd ask why you didn't do your due diligence before making a purchase offer.

Usually the contingencies are based on what you want to do and whether or not the land can support that. However, those contingencies often are done before an offer ever is made on undeveloped land, so the cost falls square on you. In this case, Georgia, a soils report by a soils engineer/geologist/geoengineer probably would be appropriate to determine if the soils can support the type of home you want to build. That should resolve your rock blasting/excavation potential problem.

I also wouldn't pay for your land survey since title records in today's world should indicate the boundaries. A good title search would be appropriate, but that is something for you to do and pay for, not the Seller. Doesn't mean you can't ask for it, though. Who knows what the Seller might be willing to pay for if s/he's motivated to sell.

Has an architect been to the property yet? Anything can be built at a price, but not everyone can afford that price, so it might be worthwhile before making a purchase offer to have your preferred architect visit the property. S/he won't be able to give you a cost estimate to build the property but s/he'll be familiar with what it would take to build what you want on that land, and can tell you things like "It won't be cheap but it can be done." Etc.

The perc test would be an appropriate item to put in the purchase contract as a contingency since that might involve "invasive or destructive" testing of the property. In order to do that, you would need the Seller's permission, most often provided in the purchase contract once it is signed by both parties.

As I always told buyers, "Ask for the universe and settle for Earth." You risk alienating your Realtor, of course, because he wants to make that commission by doing as little work as possible, which is why he immediately told you that land is sold as is and you get what you get. Not necessarily, not if you cover your ASSets............

I have developed a few parcels, most of them in Texas and Louisiana along the Gulf Coast. There were always cost overruns so I quit doing them. I think that, regardless of how well you do your due diligence, you'll also run into those cost overruns. I think it's just the nature of real estate development. So once you get a quote to build on that property, add 25% to that total. If you can still afford that, and still like the land and everything, go for it.

Hope that helps, Darnell.


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Russel Ray


Through home inspections, I provide an education about real estate. I'm one of those rare home inspectors who has been involved in real estate in many different capacities: as a Realtor (in Texas), as a property investor/flipper, as a teacher, and as a marketing expert (for Realtors and home inspectors). I believe that my experience as a Realtor and property investor provides me with a different viewpoint about home inspections in that I work for my Clients, but when there are other people involved in helping my Clients, then I firmly believe in helping them, too. That includes Realtors (both the seller's and the buyer's), repair professionals (e.g., plumbers, electricians, etc.). If I can get all the players (seller, seller's Realtor, buyer, buyer's Realtor, and repair professionals) playing in the same sandbox together to accomplish goals as a TEAM (Together Everyone Accomplishes More), then I believe I have succeeded in my job as a home inspector. My profession is, in my opinion, much more than simply documenting the condition of a property and then take the money and run. I am also a rare breed in that I don't believe that one inspection fits the needs of all Clients, and I have led the industry in understanding that fact. For example, the goals of a property investor are far different than the goals of someone buying a property to live in. The goals of a seller (a pre-listing inspection) are far different than the goals of a buyer (a pre-purchase inspection). To that end, I offer 14 different types of inspections, e.g., STANDARD, LIST, RENTER, BASIC, MAINTENANCE, SPOT, and more. I believe in giving the benefit of the doubt to all professionals in whatever industry they represent until they prove me wrong.


Over 42 years in all aspects of real estate--building homes, renovating homes, inspecting homes, Realtor.

National Association of Certified Home Inspector, Better Business Bureau of San Diego

Graduate of Texas A&M University; College Station, Texas

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