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Buying Land in Homer 101

Buy land, they’re not making that anymore! This quote from Will Rogers, keeps popping  on my Pinterest Feed as a Mark Twain quote. My favourite co-worker of all time had an affinity for Mark Twain quotes. Our years-long friendship was founded on two things:  laughs over pints of Okanagan Springs Pale Ale after work and interesting data peppered by Mark Twain’s wit. So whenever I see a good Twain quote (wrongly attributed or not), it gets my attention.

Buy land!  It can be a complicated experience, especially in Alaska where it feels like there’s are so many variables to consider. But as Mark Twain once said, “the secret of getting ahead is getting started.” So let’s dive in.

As with all things Real Estate, start by determining your budget and securing your financing. FNBA has a loan program for improved land (meaning simply that accessibility isn’t an issue and power is close by). It’s a 10-year loan with 25% down payment. The bank will finance 75% of the of the value of the land which is determined either by an appraisal or by a tax assessment (the bank will inspect the property and conduct its own appraisal at no cost to the buyer).

It’s always a good idea to ask about owner financing. Especially on land. If owner financing is a route you want to travel, engaging a Real Estate agent is a good plan. There are some pitfalls to owner financing and a good agent will be able to help make sure your interests are protected.

Homer’s geography and access to utilities are quite unique. Access to natural gas, the many ways of getting water, view properties, electricity, coastal erosion, wetlands, roads… there’s so much to consider.

Mercifully, a complete MLS listing tells you a lot about a piece of property and is a great jumping-off point for your decision making.  I’ll touch on some of the obvious ones and in later blog posts will talk more in-depth about erosion, water, and wetlands (they’re big enough to stand alone).

  1. Access
    Access is important, especially if you’re going after bank financing. Find out not only how to access your property, but who maintains that mode of access. Do you share a driveway? Make sure a shared driveway agreement is in place.  If it’s not, you’ll have to get one.
  2. Water
    Water’s a big consideration in Homer. Will you have access to city water? Can you put in a well or will you need delivered water? Blackwell Pumps here in Homer is a great resource for all things to do with potable water.
  3. Speaking of Water: Wetlands
    There are some wet lots in Homer. The Kenai Peninsula Parcel Viewer has a great tool for identifying Wetlands. The Parcel ID on the Viewer can be found on an MLS listing (Tax ID). Enter it and you’ll see your lot. Use the Map Display drop-down and you’ll find Wetlands. That will tell you where and what kind of wetlands are on your property, if any. Remember, development on a wetland will require a permit from the Army Corps of Engineers.
  4. Sewers
    If you’re considering a property that will require a septic system, then a perc test will  be in order. A perc test measures the rate at which water percolates through the soil. They cost about $1,000. It’s important because traditional septic systems only work if the soil in the leach area is sufficiently permeable that it can readily absorb the liquid effluent flowing into it. No percolation, no septic.
  5. Utility Availability
    This is a big one in Homer. Last time I talked to HEA, they quoted me $50 per linear foot to bring electricity to a lot. Depending on where the power comes from, that can have a big impact on your bottom line. If you see a listing that says electricity in area find out how close.  Then call HEA Engineering for an idea of how much it would cost to bring electricity to your prospective lot. Always make sure you know where the power is before you buy a lot.
  6. Easements
    An easement is a right or use over the property of another. Plat maps, which can often be found on the Kenai Peninsula Parcel Viewer, will contain information on recorded easements, as will as-built surveys. A common easement is one that gives a utility company access to the property. While this type of easement is necessary, it can impact you if, say, a utility company needs to dig up part of the property to repair a line. Research the all of the easements and understand how they might impact you before you buy.
  7. CC&R’s
    CC&Rs are covenants, conditions and restrictions – rules that govern the use of real property. They are typically included in the deed to restrict the way a property can be used. For example, a covenant or condition might restrict the number of pets a property owner can, prohibit backyard chickens, or require a property owner to build within a set amount of time.  CC&R’s can sometimes make the difference between whether or not a property is purchased. So read them carefully.

My last bit of advice seems obvious – Always walk your lot to find the corners and confirm the information you gathered. If the corners aren’t marked, get them marked. If electricity is said to be adjacent to the lot, find it – you need to know what you’re buying.

As Mr. Twain so wisely said, “its wiser to find out than suppose.”

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