Featured Property: MLS# 27xxxxx (Example - Your Land Could Be Here!)
Oahu Land & Hawaii Land for Sale - Hawaii Real Estate
What to Know About Buying Raw Land
Article by Lisa Scontras, Custom Publishing Group, from Honolulu Advertiser, August 12, 2007
It's at the top of your list of things to do when you win the lottery - building that dream home. A state-of-the-art
kitchen, ;plenty of closets, spa-like master bath, windows that clean themselves, energy-efficient - a cross between
five-star resort and the Jetsons.

Although a financial windfall would definitely be a big step;p in the right direction building the house of your dreams
may not be so out of reach.

While Dolores Bediones, Realtor and partner at Prudential Locations, makes it clear that buying a piece of land is a
lot more complicated than buying a home that is already built, she says it doesn't necessarily cost any more.

"Like all things real estate, it's best to start with location, location, location."

"Quantitatively, land plus the cost of construction generally costs less than a home that you can buy on the resale
market," says Bediones. "At worst, it will be the same price, but you have a brand new home designed and finished
to your taste."

Still, the process is considerably more advanced and involves an understanding of geological issues such as soil
composition as well as legal issues as zoning and architectural limitations. Like all things real estate, it is best to start
with location, location, location. This explains why the buyers who are attracted to purchasing land to build on either
have some background in construction or remodeling or they know an architect or a contractor who can help them.

"Clay means the soil is softer and may need a stronger foundation versus rock which is a more solid base but can
be more costly to dig," explains Bediones. "Contractors generally know the type of soil in the different
neighborhoods so it is better to choose a contractor and an architect who have built in the neighborhood where you
intend to buy the land. These contractors/architects are also familiar with the architectural guidelines for each

Real estate developers buy land and then build homes to sell as a business - they know how to do it. But if you're
not in the business, Bediones recommend that you educate yourself. Start by interviewing architects. It's important
that you find a match regarding style as well as budget concerns and personality. Ask to see some of the homes
they've designed so that you get a feel for the artistic style of his or her work.

"If you're budget-conscious, then you must align yourself with one who is cost conscious," she says. "If you are
building a home to fulfill your dreams, then you may go with an architect who will let his artistic designs go full on. In
both instances, be prepared for cost overruns.

Financing land is also quite different than financing a home. Lenders will normally extend interest-only loans with a
25-percent down payment on the land and then convert it to a construction loan based on the appraised value of
the finished product. The lender will then monitor the progress of the construction and lend in phases based on
completed work. The contractor is paid as each phase is completed.

Realistically, Bediones says to plan on the entire process taking from between 18 to 24 months from beginning to

"After you've purchased the land, it takes time to get the project going - two to three months interviewing architects,
another two to three months to get the plans drawn and approved, two more months bidding out to contractors, and
another month getting the permits," she says. "At the very least six months to get started and then about a year for

And it might take you that much time just to pick from the endless possibilities of finishes. Building your dream home
means making all the decisions, from light fixtures and door handles, to appliances, counter tops, types of windows,
bathrooms sinks and location of the electrical and telephone outlets. It's a good idea to hire a professional interior
designer to help you with these decisions.

"Buying raw land and building normally turns out to be a good investment," Bediones says, emphasizing that the new
house is what will appreciate, not so much the land by it self.

She warns buyers that unless it's oceanfront, buying land to hold on to as an investment may not be as good an
Sq Ft
M Tax
Loan Calculator
Loan amount ($):
Interest rate (%):
Term (years):
Additional monthly payment ($):
Monthly payment ($):
Total interest ($):
Average monthly interest ($):
Number of years:
Nakamoto Realty, LLC., 808-688-9878, Website designed and powered by AGORILLA BRAND 2006 - A locally owned and operated site.
Copyright 2006 Dom Ruiz Agorilla (RA), AHS, AHWD, CSR, e-PRO, GRI, RECS, SRES; Aloha Aina REALTOR Award Nominee.
Information herein deemed reliable but not guaranteed. We are not affiliated with Internet sites not listed in the
AgorillaBRAND Directory; therefore, AgorillaBRAND is not responsible for the contents of these external
Internet sites. Any unauthorized copying is prohibited. All Rights Reserved.