FAQ

Investment in Arizona Land

1. Why should I invest in land here in Arizona?

• No maintenance hassles.
• Possible retirement or dream home.
• Lower carrying costs.
• Return on investment.
• Beautiful picnic or camping spot.

2. What makes a good (or great) parcel of land?

• Location—proximity to wilderness or city or cultural attractions.
• Uniqueness.
• Privacy and views.
• Value for the price.
• Investment potential.
• “Speaks to you”.

3. What should I look for in a parcel of land?

• Accessible.
• Buildable.
• Privacy or great views or both.
• Good location.
• Smart development nearby.
• Cost to develop, including electric, water, sewer or septic.

4. What kind of land can I subdivide on my own?

• Urban or rural.
• Improved or unimproved.
• Depends on zoning and deed restrictions.
• Maximum allowed: 5 adjacent parcels created.
• There is a big difference between creating a planned home community and splitting your 40-acre parcel 5 ways.

5. How do I go about subdividing land?

• Contact a surveyor.
• Contact your county or city planning and zoning department.
• Follow minimum acreage restrictions.
• Check into easements, deed restrictions, zoning requirements, CC&Rs.
• Create no more than 5 adjacent parcels.

6. What does land cost in Santa Cruz County, Arizona?

• From $2,000 to $100,000 per acre.
• Depends on location, quality, potential for development.

7. How do I know if I’m paying too much?

• Look at recent sales of comparable properties: similar location, size, zoning, quality.
• Talk to a real estate agent who specializes in land in your area.
• Be up front about your budget and what you want the land for.

8. I want to invest in some land. How do I get started and where should I look?

• Drive around on weekends and look at land in different areas.
• Make a list of areas that you like and that have potential to grow.
• Talk to a real estate agent who specializes in land.
• Be up front about your budget and how soon you plan to sell.

9. Can I get a loan to buy land?

• Loans to buy land typically require higher interest rates.
• Consider a home equity loan or other source of money.

10. How much money do I have to put down as earnest money?

• Rule of thumb: 1 - 3%, usually $1,000 or more.
• The more you put down, the better you signal that you are a serious buyer.

11. How much money do I need at closing?

• Depends on many things: selling price, down payment, inspections, lenders title insurance.
• Your real estate agent can estimate the closing costs when you write up an offer and your loan officer can assist in cost estimating.

12. Why buy land in Santa Cruz County?

• Beautiful.
• Undiscovered and uncrowded.
• Lower taxes.
• Relaxed way of life.
• Cooler climate than much of Southern Arizona.

13. Why should I buy land instead of rentals or commercial real estate?

• Low maintenance.
• Steady appreciation.
• Pays for itself without your attention.
• Less affected by fluctuations in housing and job market.
• Less liability.
• And its fun to dream about building your getaway or retirement home!

14. How do I know if I’m buying at the right time?

• Finding a piece of land that you love means it’s the right time.
• There is no bad time to buy land, as long as you don’t pay too much.
• Get advice from a real estate agent who specializes in the type of land you want.

15. What are taxes like on unimproved land?

• Agricultural status or grazing leases can keep taxes low.
• In general, taxes are lower on land than on residential or commercial property.

Building

16. How do I get a loan to buy land and then build a house on it?

• Get a home equity loan to buy the parcel.
• Use a construction loan to build.
• At the end of construction, convert your loan to a home mortgage or refinance it.

17. What are the steps involved in building a custom home on rural land?

• Review building department regulations, zoning, easements, CC&Rs, architectural guidelines.
• Learn building permit requirements.
• Walk the parcel at different times of day and year.
• Look at light, views, privacy, driveway access, potential house sites.
• Do percolation testing and well siting.
• Get estimates to put in driveway and utilities.
• Camp overnight on your house site!
• Think about sunlight, seasons, views, driveway approach.
• Make preliminary floorplan and “live” in it for 6 months.
• Work with a home designer or architect to design a home for your land.
• Include a site plan: well, septic system, driveway, utilities, outbuildings.
• Interview contractors and choose one.
• Start site prep.
• Build your house!

18. Who do I contact for information?

• City or county building department.
• Builders.
• Well drillers.
• Neighbors.
• Your real estate agent.

19. How can I choose a good contractor?

• Interview contractors.
• Talk to their customers.
• Look at the homes they built.
• Find someone you can work with (you can’t change them and they can’t change you…).

20. My property will need a septic system. What is involved?

• Use a licensed contractor for soil percolation testing and construction.
• Review county or city regulations.
• Need soil that drains water fast enough but not too fast.
• Need soil at sufficient depth and square area.
• Obey setbacks from property line, washes, wells.
• Conventional systems require collection tank and leach field (trenches).
• Alternative systems may cost from $12,000 to $25,000.
• TIP: put in an oversize system to accommodate adding a bedroom, bathroom, or guest house.

21. My property will need a well. What is involved?

• Groundwater is held in narrow fractures in rock.
• Well drillers try to intercept one or more water-bearing fractures.
• Choose well site with advice from: hydrogeologist, dowser, or well driller.
• 1-gallon-per-minute well plus storage tank is adequate for typical family.
• Your well may be 300 to 1200 feet deep.
• Drilling cost is variable: approximately $18 per foot.

Buying a Home

22. How do I pick an area to focus on?

• Consider budget, job location, schools, shopping, church, neighborhood improvement potential.
• Better to find a small house among large ones.
• Talk to a real estate agent who knows the area and isn’t too busy to talk to you
• Be up front about your budget and needs.

23. How long does it take from accepted offer to moving day?

• Depends on the escrow period stipulated in the purchase agreement.
• 6 weeks to 2 months is typical, but it can be 6 months or longer.

24. What are the steps involved in buying a home?

• Get pre-approved for a loan.
• Write up an offer with your real estate agent.
• Be prepared for counter offers.
• Sign final acceptance of contract.
• Open escrow and begin inspection period.
• Conduct home and termite inspections and other research.
• Request repairs based on inspection or renegotiate.
• Close escrow.
• Take possession of your new home!

25. How much money should I put down with my offer?

• Ask your real estate agent for guidance.

26. How much money do I need at closing?

• Title company will provide the figure for you.

Selling Land

27. What are the steps involved in selling my parcel of land?

• Meet with real estate agents like Curtis Smith who specialize in Arizona land.
• Choose one who knows your area and listens to what you have to say.
• Be up front about how soon you need to sell.
• Be honest about what you need to realize from the sale.
• Determine a realistic value for your property.
• Sit back and let your agent do the work.

28. How much money can I make?

• Southern Arizona land has increased significantly in value recently.
• That said, your return on investment (ROI) depends on when you bought the land.
• Land splits are a common way to increase your ROI, but they are not always advisable, and some subdivisions disallow them.
• Get advice from a reputable real estate agent who specializes in land.

29. How do I set a good price for my land?

• Talk to a knowledgeable agent who specializes in land.
• Don’t over or under price property for the current market conditions.

30. I get letters all the time from people who say they want to buy my property. Are they legit?

• They are probably looking for sellers “in distress”.
• They likely will not offer you a competitive price.
• when queried, they usually are not familiar with your area, much less your particular property.
• Ask your real estate agent to find out if they are legitimate buyers.
• If they are, your agent can represent you to get you a higher price.

31. What is owner carryback financing?

• You, as the seller, hold the Note for the sale of your property.
• The buyer pays you monthly installments plus interest.
• The interest rate is set by the purchase contract.
• An escrow company or other entity handles all payments and accounting.
• If the buyer defaults on payments, you can foreclose on the property and take it back although this is rare.

Selling a House

32. How much money can I make?

• This depends on the market conditions.
• Depends on condition and marketing.
• Depends on how much you have spent on improvements.

33. How do I set a good price for my house?

• Work with an experienced real estate agent.

34. I added on to my house without permits. Can I sell it?

• Yes!
• Obtain proper permits before or during the sale process.
• You may need to have building engineer check for code violations.

35. What remodeling projects would increase the selling value?

• Modest kitchen improvements.
• Bathroom replacement.
• Renovations that make the home cute and comfortable.

36. What do I do to prepare my house for sale?

• Remove knick-knacks, photos, magazines, miscellaneous “clutter”.
• Clean out garage and storage areas.
• Clean windows, light switches, carpets, bathrooms, kitchen counters & appliances.
• Touch up paint or even a new coat of paint.
• Put fresh potted plants by entry.
• Clean up outdoor areas, rake gravel, remove brush & weeds.