Question about residential lots (fit in, for sale, foreclosed)

[DrLizardo]

While playing around with HAR and Zillow I noticed a number of vacant residential home lots in mostly and partly completed subdivisions. Some of these are in recently built developments (one subdivision looked like they just gave up building homes and are selling about twenty lots) and others are in subdivisions that I thought were completed years ago.

My question is regarding building on these lots, specifically, when the listing says something along these lines:

Build your dream home with one of our luxury home builders and enjoy luxury waterfront living in an exclusive neighborhood.

Does that mean if I buy the lot the deed restrictions, or the contract, are written in such a way that I have to choose from an approved list of homebuilders?

[chris_ut]

Why not just email the listing agent through har and ask them directly?

[SkyeAnjel]

residenial lots have their own restrictions. You have to check each lot for specific restrictions..some will require certain builders or minimum sq. ft etc...just depends on the neighborhood.

[DrLizardo]

Originally Posted by chris_ut

Why not just email the listing agent through har and ask them directly?

I may do that, but for the moment I'm hoping to find an unbiased opinion.

Originally Posted by SkyeAnjel

residenial lots have their own restrictions. You have to check each lot for specific restrictions..some will require certain builders or minimum sq. ft etc...just depends on the neighborhood.

Thanks for the reply. I didn't know that restrictions could specify certain builders. Size, style, colors, suppliers, etc., I knew all of that could be specified.

[HoustonRonnie]

In my opinion, you have to look at the ownership history of the land. Most of the time, you'll find that a development company originally bought the land and they, in turn, sold lots to homebuilders. That development company probably has a Home Owners Association attached to it, and they gin up the deed restrictions and zoning bylaws.

Assuming a builder bought the lot you are looking at from the developer, it may also be the case that the developer foreclosed on the lot and took it back into inventory. If that's the case, then you'd be buying the lot from the developer and the deed restrictions and HOA involvement come with it.

Another scenario would be that a bank financed the land for the homebuilder and then the bank foreclosed on the lot. I would still assume that the deed restrictions from the developer follow the lot regardless of ownership.

Ronnie

[kreeyax]

A lot of these lots for sale in residential neighborhoods also have time restrictions for building a home on them. They might tell you that you have to have a house completed on the lot within 6 months, so you can't just buy a lot and sit on it forever hoping to flip it for profit some day.

[DrLizardo]

Originally Posted by kreeyax

A lot of these lots for sale in residential neighborhoods also have time restrictions for building a home on them. They might tell you that you have to have a house completed on the lot within 6 months, so you can't just buy a lot and sit on it forever hoping to flip it for profit some day.

Pats history with time restrictions are what prompted this question. In the depth of the mid-late 80's housing downturn here locally, I saw some lots with huge potential going for a steal. The lots were very large and restricted to large mansions, and I knew it would be years before anyone would be building there. I was told I would have to start building within one year so I blew it off.

Over the ensuing years I saw some of those lots come to the market and be sold - with some being sold more than once. It's just now, twenty + years later, that most of them have homes on them. The one or two remaining lots are still vacant are for sale for three times what I could have bought them for back then.

So, when I ask the question about being restricted to certain builders, I remember being told "you have to start building within a year", and think that apparently the rules don't always apply. And given the economic times and the housing market, I was wondering if these aren't the type of times when the rules don't always apply.

And in my current situation I'm not thinking of holding on to a lot for years and years to speculate, but I am thinking that I like the area and neighborhood, and it would be ideal for a downsized house that I want to have on a few years when I become an empty nester. Although I have no objections to building any future house to fit into the style and standards of the rest of the neighborhood, I don't want to be trapped to their builders, and I certainly don't want to start building anytime soon. It's a buyer's market, why would I not want to use my position of strength to negotiate things the way I want.