Lot Logic: Choosing the Right Land for Your Custom Home

SEASON EIGHT, EPISODE TWO | TRANSCRIPT

KIM
The lot with the swoon-worthy view? Careful, it might be a heartbreaker for your budget. And that flat, just okay property you almost swiped left on? It might be the perfect foundation for your dream home. When it comes to land, beauty is only topsoil deep.

and sometimes the prettiest lot on the block hides some seriously ugly development costs. That's why in this episode, we're going to dig below the surface and we're going to dig up the secrets to finding the right piece of land for your build. We're going to help you spot red flags, ask smarter questions, and find that right match for your forever home. Because in the world of custom building, falling in love too fast, well, it can come with a price.

VOICEOVER
Welcome back to The Art of Custom and our season dedicated to all things pre-construction. In today's episode, we're diving into the art of how to evaluate the building. science of finding the piece of land to call home. And can evaluate land like a build before you buy. Let's dig in.

KIM
Maybe you've been scrolling Zillow late at night or perhaps checking out neighborhoods on the weekend, dreaming of mountain views or wooded lots or perhaps the perfect cul-de-sac close to your favorite restaurants. You may have some ideas of what you want land-wise based upon where you want to live or how you want to live. But here is the cold hard truth. Not all land is created equal. Melody, before we continue and introduce Chris,

I have to go back to the cold open, the writing. Was that you or AI? Spectacular. I know.

MELODY
That was me.

KIM
Nicely done. I like this subject because it really does start with finding the right piece of land. And we have the, I call him the right piece of work, Mr. Chris Pedigo, who's our general manager in St. Louis, because that's one of his jobs. He's general manager, but he also very active in the sales process. And he looks at land day in and day out.

I serve a lot of those same functions for our Utah team along with our team out there, but it's a very important part of the building process is finding that perfect piece of land.

MELODY
You know, it might look like a great lot upfront, but you know, there can be some serious budget headaches that Chris can find the minute he steps onto our property. He can sometimes find them on Google Earth.

He's like our where's Waldo of the construction industry.

Where's the sinkhole? Where's?

KIM
No, no, he's missed that a couple of times. One big one. Welcome back, Chris. How's it going?

CHRIS
Thank you going good. Good to be back

KIM
When was the last time you were out on a lot walk? There we go. See, I proved my point. You enjoy that though, right?

CHRIS
I do, yeah. And you know, I think it's a very valuable piece of information to supply to our potential clients. that is looking at it from a builder standpoint and really helping them analyze if this piece fits what they want. And then also like you guys were just talking about potential downfalls to a property when it comes to cost or utilities or that.

KIM
So there's a lot that goes into it. There's a lot of good input you can give a client from a builder standpoint.

Right, yeah there's a few things. One thing that I always want to inform people of are like you said those potential costs or those potential downfalls to the lot if you will or things that need to be considered. And then the other thing is just how that particular lot fits what they're trying to do. So you know we have usually initial talks that talk about you know are you looking for a walkout? Are you looking for a main level pool that's up off your first floor? Are you looking for a wooded lot or it's a privacy?

Are you thinking solar and we need to make sure we have you know, very good access to the completely wooded lot is bad for solar. So there's a lot that goes into those evaluations that, you know, we have some initial talks and we want to give that feedback not only on potential costs, potential downfalls, but what things off of your list of must haves does this cross and what does it not?

KIM
And Melody, one of the things we do in the mountainous area like Utah, for example, or those building in Colorado or Montana, wherever, you really have to focus on the topography there too, because that topography in many cases is going to drive the design of the house. And the design of the house is going to drive your budget.

So again, having a builder who will walk the site and help you understand exactly what you're dealing with. There's a lot of what we call uphill builds in the mountain area where that means your house, it's not a walkout for example where you're kind of building down the slope, you're actually building up and that comes with some very heavy excavation costs because you have a lot of dirt and or rock that has to be removed, hauled out, dumped. So there's just a lot of cost ramifications with any lot that you're looking at.

And that's why it's very important to make sure your builder does visit it with you, talks to you about some of the cost implications, and that's what Chris does exceptionally well.

MELODY
Something that just occurred to me, when you want those nature views, there are some things with driveways even, right? So you have this wooded lot that you want in the middle of acreage, you're going to be pouring a really long driveway. When you're building up into the side of a mountain, you've got this driveway that kind of curves and goes up. So there are land development costs in both cases that you're not going to find when you're doing an infill bill.

And that's one of those things you do, especially if you're weighing different properties against each other that you want to really consider, hey, this one gives me these things off of my list that I want to accomplish. This one gives me these, but which one is more cost effective? Or if so, is that extra cost worth the benefits that comes with that particular piece of property?

I know one project not that long ago that you looked at and were helping the client with, there was going to be substantial money needed for retaining walls based upon the way they wanted to use the property, which was to have some flat space for the kids to play and just things like that. in some of the previous episodes, Melanie and I have talked about really knowing what you want and being able to make a list. so something like that needed to be on the list because then you or the builder can help them determine

Speaker 1 (06:48.184)
Can the lot be used in that way? And if so, what are the possible development costs because of it?

Exactly, yeah. In that particular case, on that lot, we ended up taking a pass on that lot to look for something because that was a big part of the big things is that space for the kids and we just weren't going to be able to get it without a giant investment on that lot. And we did end up finding a piece of property down the road a little bit that still needed some work to get that flat yard, but much less costly and really worked out the best in the end.

And Melody, you mentioned driveways. That's a big trigger in whatever market in which you're building. Because if, to your point, if you have acreage and you want to build in the middle of it, you've got a very long drive. So what is that driveway going to? Is it going to be an asphalt? Is it going to be concrete? What are you doing with it? Another thing that we run into in the mountain environments in which we build is heating our driveways.

There are some local requirements for depending upon what that driveway grade is that will require heating driveways. And that can be a big adder to the budget as well. it's critical that you really think about anything and everything. And be very serious. Be intentional when you're having these lot walks, when you're talking with your builders about what some of these other costs are. Because it's not just building a big, beautiful home with great views. It really comes down to how much.

will this particular lot add to possibly my construction budget with the way it sits here today?

Speaker 3 (08:13.462)
And we've talked about in the past, in Phil versus developing a piece of land out on acreage and access to utilities. I mean, I like to tell people when they're talking to me that, you know, the money all comes from the same place. So you want to make sure that you're thinking about sewer versus well. And what are some of those things that even if you're doing in-build, isn't there something with utilities? Like there's some considerations that you want to think about.

Yeah, there can be and you know, and it may be as simple as, you know, this existing house that you're going to replace, maybe it has above ground electric utilities and maybe it's in or for instance, I have a client right now that's building on a lot that they have access to city water and they don't want city water. And we had that discussion early on. So we're putting a well in on a property that has access to city water just because they like well water better. Even on an infill, the utilities can come into play and what you might be changing about them.

There's even some of these older neighborhoods, the sewer lateral lines and the infrastructure. There may be some significant costs with getting that sewer repaired too to lead into it.

Same thing in other parts of the country. Again, I keep going back to the mountain because that's where we build. But if we're going to run into rock for the foundation, you're going to run into rock for your utility. So your utility excavation budget has to go up because of that. But same thing in other parts of the country. You might be dealing with sand somewhere else. And Chris had mentioned earlier solar and sun exposure. That's a big one. Because if you want solar panels, you have to have that southern or that southwestern exposure.

or solar panels aren't going to do you any good. Same thing with your views, same things with overhangs. I mean, there's a lot that goes into it, a lot that you want to discuss with the builder. Zoning and setbacks. You always want to know where your setbacks are. You have to know that. You have to know what the limit of disturbance is, where you're going to build. You have to know what the square footage allowable is in these municipalities. It all ties back with this lot selection because, like, for example, the city of Kirkwood in the greater St. Louis area.

Speaker 1 (10:09.24)
they definitely have floor area ratios, they call them FAR, right? Floor area ratios that you have to build around. And so if you buy a smaller lot thinking this is a great price, I can't believe I found this, but then you're only allowed to build a home smaller than you wanted to, it's not a good purchase. So your builder can help you figure out, what are the requirements as far as the architectural review board in this particular area?

Okay, so I'm going to admit something really quick. I don't know what a set pack is.

I'm so stunned I can't answer. Chris, you take it over.

So basically,

Basically that's the distance off of the lot line that you can actually build. Okay. So the side setbacks or the front setback off the road or the rear setback off the back of the property. And to Kim's point, a lot of times those do have a lot to do with the buildable area of the lot. And sometimes that comes down to the home style that you're wanting to be and that needs to be considered because if you're wanting a sprawling ranch home and it's got a detached garage with a detached dwelling or whatever it is, if it's a wide home.

Speaker 2 (11:09.314)
You have to find a lot that has not only room for the width of that house, but also the side setbacks and that. So a lot of times that comes into the style of home you're looking for. And or one of the things that we do a lot here is I always recommend our clients don't finish your home design until you have the property, because a lot of times you can modify that design to fit that perfect lot. But hey, what we wanted wasn't fit. Well, let's figure out how to design the home that fits on that property then.

It's almost like HOAs, right? HOAs also have setbacks, but also municipalities have setbacks, or where's the, like...

The that's actually in the survey on the property is your setback. So it comes with a set easement, if you will, a buildable space. And there are things that can go outside of that space. Like here in our area, you can do a driveway on a setback area, but you can't put a structure. And in some HOAs will have required a typically those are more cosmetic and how's it look and how's it placed on the lot. Your actual development of that piece of property was what sets the setback.

Yeah, so the developer who's working on it will set the setbacks with the county because then they have to go into the county and get the plat approved and signed off on. So it's kind of a combination. But to Chris's point, the HOA is more from a cosmetic standpoint more so than anything else. We had briefly touched on city water versus a well. There's also septic versus public. And those are also very important factors to consider.

simply because for example, a septic system costs probably three or four times what connecting to public water will. In mountainous areas, you have to sometimes have what's called an E1 pump, which is basically a lift. It's going to take the waste from the lower level and bring it up and put it into the public sewer system. So an E1 system built into your home,

Speaker 1 (12:59.906)
Those are pretty expensive. So all of these are things that you might not think of when you pull up to the lot and say, that's a beautiful view, or I love the trees, or whatever. There are a lot of considerations that do come into play as you start thinking more seriously about that piece of land.

Well, those HOA requirements, know sometimes it's square footage. You had talked about it being aesthetic. you know, if you're doing a one and a half story, you know, you have to have a certain footprint. I know there's been locations on garages and even cladding requirements, which can really drive costs.

Yeah, they can if you know you're considering a piece that's one thing you definitely have to investigate is what are the HOA standard? Does it have to be a full stone front? Hey, maybe you want a big detached building for for your toys in your boat But is a detached garage allowed in that neighborhood? And if so, does it have to match the house or can you know? There's a lot that goes into those HOA requirements can definitely drive your costs

And a lot of resort areas too, Melody, have restrictions on the heights that you can build. You can usually get a copy of the indentures if you're considering buying a piece of land or the architectural guidelines, if you will, for the various communities. And they'll have everything listed. But I mean, something simple is you have to have a 12-12 roof pitch instead of an 8-12 roof pitch, or you have to have a certain brand of windows. Chris mentioned the amount of brick or stone. Those are all things that can absolutely drive your construction budget. And it's a

good source of conversation for the builder. And that's why we recommend, know Chris said, you know, don't finish your plans before you find the lot. Do not buy the lot before you have someone go out and truly give you a good analysis of that lot. Even if you have a builder who said, sure, I can do that site visit for you and I'm going to charge you a couple hundred bucks or whatever their fee might be. Chris, we don't charge. I think a lot of builders don't either, but don't you think that's good peace of mind just to.

Speaker 1 (14:47.786)
even if somebody requires a little bit of payment to truly understand the lot and some of the development costs that might come with it.

Yeah, I would say that's a given. mean, I think that you absolutely should, unless you have a really good handle on all of those things that come into building on a lot yourself, I think you should have somebody out to help with that.

What are you looking for? Like, do you have a checklist or is it just kind of an instinctual thing?

So the first thing you're looking like we talked about is available utilities. What is on the lot? What's not on the lot? What are we going to require? Especially if you get out on some like a rural setting. I mean, you have to really how far is it to electric? know, is there electric at the street is electric. We had a project a couple of years ago here in St. Louis that the electric was a half mile down the road and it required the utility company to bring, you know, poles down to the property and then us to do some extensive trenching to get in. So that was a major cost on that project. So what utilities are available?

Kim talked about the topography earlier, know, just the topography to drive the design. Are there things from that that are going to drive costs? And if so, are those costs reasonable or are they, you know, within budget or not? And then lastly is kind of going through and making sure that more from a design standpoint, does this give you the things you want out of the lot? You know, is there enough buildable space? Like, hey, we do want to detach the outbuilding. Is there enough buildable space on that lot for the main house and then distance back and have an outbuilding over?

Speaker 2 (16:09.536)
If there's not, then what are the options and alternatives? So the last thing we're always considering is what things off of our list of expectations does this give us and what does it not? And so that you can weigh those.

I'm going to go through a list of red flags that I'm familiar with and you need to tell me yes or no, right? Yes. Is that a red flag?

Can we rate them 1 to 10?

Speaker 2 (16:30.894)
It's not a red flag, it's just you need to make sure you know where they are and does that affect the buildability of the lot or where you want to place the house. It's not a red flag necessarily, but it can be.

floodplains.

That's a 10. Sorry, I had to jump in there. my goodness. Yeah, stay away. If it's a floodplain, it could eventually involve the Army Corps of Engineers and all. It is a real big potential issue to not to dissuade you from purchasing for sure, but it could be something that drags this out for a very long time. Just in my experience, I would say be very cautious and try to avoid floodplains if possible.

Yes.

Speaker 3 (17:08.215)
What about wetlands?

That kind of goes right along with the floodplain idea. right. And it's one of those things where, how much of the property is in a floodplain? And to Kim's point, if there's a waterway through, especially if there's running water in it, that's one of those things where you really do have to cross your T's and dot your I's because like he said, you do get government agencies involved with disturbance or there's a lot of times they're saying you have to stay back and, no disturbance within 75 feet of high watermark or whatever it is, but you really need to take extra precaution if there's waterways on the property that you have those covered.

I know that when you get into some of the infills, are going to be some zoning changes sometimes, especially older neighborhoods. Tell me about zoning changes.

I would say tread lightly, try to understand the community in which you hope to build. Some communities are much more open to them than others. Some communities are afraid to set a precedent, so they never agree to any kind of a zoning change at all. Do some research and do your homework before you really get into thinking about requesting any zoning changes.

There's a lot of times a quick conversation with the zoning department of that municipality saying, hey, here's what I'm thinking. Give me your initial thoughts. And a lot of times that gives you at least a direction where, you know, if you're going to have an uphill battle or if it's something that they would definitely.

Speaker 1 (18:25.198)
You know, Melody, that's a great idea because I could not agree more with Chris that most municipalities are absolutely open to having conversation with prospective home buyers in that particular area and they will absolutely spend some time with you. I also want to mention whenever you do get a survey, make sure that you ask for a survey that has all of the utilities located.

because on some of these older neighborhoods, you literally could have a sewer or something running right through the middle of your backyard that you're not aware of, or you might have it running under a driveway. You might have a lot of different things going on. So whenever you order a survey, always order one that has the topography, that's going to help with the design, that shows your contours, your elevations, and then also make sure it has all of the utilities marked because the last thing you want to do by a piece of property, all of sudden there's a sewer line, water line, whatever that's in a location in which you want to build.

and then you have to figure out a way to move it or have it move.

What other tips do you guys have in terms of the land search?

Be flexible and I think it's all about prioritizing right so come down to is our priority cost you know is that driving ours our priority you know the location is the priority the layout of the lot like hey you know it's it's a deal killer if we can't have that main level pool I would say go into it with a game plan and just first prioritize those things and I think budget always got to come first hey what is our budget and are we flexible on the budget if we find that perfect piece of ground or are we not because if you're not then

Speaker 2 (19:55.576)
for your real estate agent or for your builder, whoever's helping you look for property, they kind of need to know those parameters that, hey, here's where we'd like to be, here's our target. If the perfect piece came up, we can go here, or no, we have to stay within this budget line. if it's over that, don't even bring it forward. So I think just developing that list of priorities is a good initial start.

Make sure it's a thorough list of everything that you might want to include with that build because to Chris's point, it needs to be thorough enough that whomever is helping you make that decision has all the information. If you leave out the big component that we want to pull down the road, that's huge. So you have to make sure that it's very thorough. I think my one piece of advice is do not fall in love.

with a lot or a piece of ground until you do all of your homework because then you won't be heartbroken if it's not the right one for you.

And the earlier you bring your builder on board, it's going to be my tip because that's what I tell anybody who calls us. The earlier you bring the builder on board, the more power you're going to have over all of the surprises over the control of the budget. And you can say, our design is more important than the land, or maybe our view and our land is more important than our design. And they can help you with balancing that.

And that's probably one other really good point to talk about is to go into that land search first with an idea for what you want to build because you really have to have an all in budget to consider. Don't go out and just start a property search without really having a big picture and saying, okay, house plus lot. This is our all in budget. And that's really going to give you more parameters than just deciding what you want to spend on land. You really need to get with your builder early on and figure out, Hey, what does the house I want? What does that budget look like? Because you need to consider the overall budget as a priority while you're looking for land.

Speaker 1 (21:37.23)
Christopher, thank you. Yes, sir. Good information. We always appreciate having you a part of the podcast because you always bring excellent information to our listeners. pleasure.

Speaker 1 (21:51.134)
Melody as we've seen today, love is not blind when it comes to land. Now you have a little bit of an inside joke there, don't you?

There's a Netflix show, Love is Blind. I don't know, as long as we're doing the dating thing.

That was pretty good. Yeah, but no, it's true because love is not blind when it comes to land. You've got to do your homework. You have to ask the right questions and then thinking long term, that's essential really when it comes to the purchase of any kind of land or lot.

And before you buy what looks to be the perfect piece of land, remember you do not judge a lot by looks or cost alone. There are so many things that are going to impact the overall cost and design of your home. So keep those in mind.

And as Melody has reminded you many times in this podcast, and we try to remind everybody actually on several of our seasons, make sure you bring your builder into the process early before you make that offer. Or even bring them in very early in the due diligence period. That way you're going to have an accurate evaluation of the property.

Speaker 3 (22:51.594)
And in summary, sometimes it's the quiet, unassuming lot that is the best long-term match for your vision and your budget.

Absolutely. OK, let's turn our attention to episode three, which is going to come up next. And I like this a lot. We're going to talk about, you mentioned the importance of getting the builder on board. It's also important to get an architect and a designer on board. But when? There's got to be a right time, right? We probably should talk about that. So we will during episode three of the Art of Custom, which is going to come up soon.

Did today's episode get you thinking about your dream home? Write it down and bring us your questions. We can address it either directly or in an upcoming episode. And if you want to ask us directly, how do you get a hold of us, Ken?

It is podcast at hibshomes.com. learned that. We also have a phone number.

Yes, call me maybe. It's 844-Hibs-20.

Speaker 1 (23:43.726)
And a Reddit community, we are high tech.

We are Art of Custom Building. Find us on there.

Thank you so much for listening, we greatly appreciate it. And we will see you back here for episode three very, very soon.

OUTRO: For more information visit www.artofcustompodcast.com or find us on Facebook and LinkedIn as The Art of Custom. Be sure to subscribe to get the latest episodes and please rate and review. The Art of Custom is produced by HugMonster sound with original music by Adam Frick-Verdeen. Thanks for listening.