What’s the Difference Between an Improved and Approved Lot?

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Today, I want to talk about lots and land in the Wasatch Front area. People tend to think of land just like they think of residential homes. They look at the information online, feel excited, and call us to build a house! However, it’s not that simple. There are a lot of factors involved with buying a lot, including if the property has been improved or approved.

When we ask if a lot is approved, we ask if the city has approved building on the lot. Does the zoning for the area fit the lot? Is the lot meant for a residential property? There is much to consider to ensure a home can be built on a lot.

Most of the lots for sale in Salt Lake County may be buildable but they haven’t been approved yet. It’s quite rare to buy a lot that has already been approved. You have to check in with the city because there’s a laundry list of things that have to happen before the home can be approved. You need house plans, paid permits, utilities, and so much more.

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Not all lots are approved to build on.

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You should also check to see if the lot is improved, which means the lot has had physical improvements added to make the property buildable. Some of these signs are not visible to the naked eye. However, if you see a green power box on or near the property, or if there is piping coming straight out of the dirt, those are signs that improvements have been made because you can tell that utilities have been brought to the property.

Subdivisions that are newly improved with roads, curbs, gutters, and sidewalks have lots that are most likely improved and approved. Some house plans might not have been approved yet, but most of them should be buildable. These subdivisions will be in rapidly growing areas, like South Jordan and Daybreak.

We often handle eastside Salt Lake projects and many lots purchased in that area are not improved or approved. Clients call all the time asking for a number, but the costs for improving a lot can vary wildly. We’ve had lots that cost more than $175,000 to improve, and that’s before you even build a house.

For example, there’s a lot right now on Kennedy Drive that’s listed for $160,000. That sounds like an amazing deal, but this lot has been for sale for years because $160,000 is a fake price. It’s going to cost hundreds of thousands of dollars to improve that lot. You will probably be half a million dollars in before you can even build on that lot.

If you have any questions about lots and land or about real estate in general, give me a call or send me an email. I would be happy to help you!

You’re Not Saving Money by Finding a Home on Your Own

Selling your Wasatch Front home? Get a free home value report

Buying a Wasatch Front home? Click here for full MLS access

Today, I want to give you an analogy in order to clue you into one of the most common misconceptions we see here in real estate.

A listing agreement is a form signed between a seller and any brokerage and agent that represents them. Prior to the home being listed on the market, this agreement has been signed and agreed upon between both parties. Why is this important?

Well, on this document, the seller and the brokerage have already agreed to a commission that will be paid. Throughout the years, it’s been common that this number is right around 6%, with 3% being set aside for the listing agent, and the other 3% set aside for the buyer’s agent.

We find buyers all the time who think that if they just go out and find a home themselves, they will be able to knock off 3% of that commission, but they are mistaken. To explain how this works to buyers, we use what is called “The Costco Analogy.”

When you go to Costco and get your groceries, you can pay with either your credit card or cash. If you pay with cash, would you demand that Costco whack 3% off your purchase price because they didn’t have to pay the credit card transaction fee?

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Hiring a buyer’s agent doesn’t cost you a thing.

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Of course you wouldn’t, that’s ridiculous. Well, that’s the same idea as somebody “saving” 3% on a commission when they don’t hire a buyer’s agent. The listing agreement has already been signed and whether you are represented or not, that 3% commission is set aside for a buyer’s agent. All you accomplish by not using an agent to help you find a home is giving the seller’s agent a bonus.

This is probably the most common question I’ve gotten in my entire career. The reality is, Costco has a preexisting agreement with the credit card companies before you walk in the door, the same goes for the seller and listing agent.

So, hire a buyer’s agent if you’re out looking for a home. They don’t cost you a thing, and can really help you sort through all the listings out there in order to find the perfect one. They can also negotiate on your behalf to make sure you get the best deal possible.

If you have any questions for us or are looking to buy a home on the Wasatch Front, give us a call or send us an email. We would love to hear from you!