Lot’s of vacant lots are available in the West end of Eagle County. It’s a great time to buy a vacant lot if building a new home in the next year or so is in the cards. Prices may never be better. Ok, what’s the problem? Answer, getting financing.
Lenders, if they have money, are going to want upwards to 50% down to buy a vacant lot. That’s a big chunk of cash to come up with as most lot’s for sale are $300ish or more. There are a few lots for sale that offer owner financing which is a great deal if you like the location of the lot. But how else can you buy a lot and take advantage of the current deals?
Let’s say you are thinking you would like to buy a lot in Eagle Ranch now and be ready to build in 2010. (Believe it or not, it will take you a year before you can start to build a home.) After all there are some 85 lots on the market and most of the lots have come down in price. Here’s what you do.
First, find a sharp broker. Don’t know any, call me and I will help you find one.
Second, find a couple of lots you like and pick one to start with. Have your broker write an offer where you put up $25,000 non-refundable earnest money deposit and partial payment with a closing date 1 year out. Why non-refundable you ask? Because you are taking the lot off the market for 1 year and that has value to the seller. Plus it shows you are committed to buying the lot. If the seller of your first choice says no, move on to your second choice and so on until you find a savy seller. A savy seller will know your offer puts him light years ahead of all the other sellers in the market place today.
Third, this buys you time to plan, design, get design approval, line up your builder, get your financing in place and be ready for the start of the building season. By starting early you have the opportunity to get the best prices.
Fourth, you have one year with no mortgage payments or taxes to pay. Your only out of pocket expenses will be designing your home and getting the plans approved by the Design Review Board.
Fifth, before closing on the lot, you will have taken your plans and costs to build your new home to your favorite banker and have your financing in place to buy the lot ( should be way less than 50% down), build the home and have your permanent financing in place.
What all this means is, you put up $25,000 and got 1 year before the interest meter started running. You bought at this years price and will save yourself in the neighborhood of $15,000 (assumes a $325k lot at 6.5% interst only and taxes of $4500) in lot payments and taxes before you closed on the lot. That $15,000 will go a long ways towards the planning and design of your new home.
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