Buying building land. How to find the right parcel.
In the right place at the right time. This is essential if you want to buy building land. In our interview, Reiner Graf, a sales advisor with the Swiss general contractor Marty Häuser AG, explains how to find building parcels despite a lack of supply – and how builder-owners should proceed when buying a plot.
Mr. Graf, for whom is it worthwhile buying building land?
Primarily for an individual or a family who wants to design a residential property entirely according to their own preferences. Existing properties in urban centers and suburban areas are rare and even older houses are fetching high prices. In addition, complex renovation works add to the cost of buying a house. Then people start to think: "Why don't I build it myself?"
Before starting to search for a parcel, prospective buyers should think not only about their own preferences but also what they can realistically afford. The financial options for the whole project, i.e. the parcel and construction work, should be clarified at an early stage. These parameters can be used to narrow down the search.
The best option is to talk to an architect or a general contractor in order to work out approximately how much it will cost to build what they want. This information can be used to calculate the budget for construction, and therefore how much remains for the building land. If people looking for a plot then compare this with advertisements from their preferred region, they will quickly see whether it is realistic to look there.
People in Switzerland often search via online portals and apps on their mobile phones. On its own, however, this rarely leads to the right result because the portals are teeming with prospective buyers. When building land comes onto the real estate market, the price immediately skyrockets. Sales are mostly conducted through an auction process , where the highest bidder wins. As horrendous prices are sometimes paid for building land, it is very likely that you will leave empty-handed.
That doesn't sound very promising. What other options do prospective buyers have for finding a plot?
If they've decided on a region, they can, for example, track down the owners of vacant building parcels through the relevant land registry and apply to them in writing. But they won't be the only people doing this here either. Nowadays the search for attractive building land is a hard slog.
Prospective buyers have to be in the right place at the right time.
Reiner Graf, sales advisor with Marty Häuser AG.
There's hardly any vacant building land available in the cities and conurbations any more. Do you have any tips about finding a plot in such places despite this?
It's always a good idea to be on the lookout for parcels that have already been built on, i.e. old houses. Because tired old properties can be knocked down and a new one can be constructed on the available building land. If finances permit, a larger plot can be purchased than is actually needed. Then two projects can be developed with a specialized construction partner, one of which is re-sold.
Let's assume that a prospective buyer is lucky with their search and can view a building parcel. How will they know if it's suitable for their project?
The important thing is for the land to be fully serviced. In simple terms, this means that it is zoned, that there is access to the plot, and that connections for wastewater, water, and electricity are available. Studying the building regulations, i.e. the framework conditions in the building code, is also important.
This is difficult to assess for non-specialists. Who should prospective buyers consult?
I recommend consulting a specialist for this assessment. Perhaps the prospective owner already knows which architect they want to employ to build their home. The architect can then give them the necessary support. First, by checking whether the land is serviced and whether the client's dream house can be built there in line with their expectations. Second, the architect can provide an initial estimate of the construction costs. It's important to know what lies ahead before buying a plot.
Speaking of costs, what determines the price of a building parcel?
Location, location, location. The more appealing the municipality, the infrastructure, the tax rates, and any views, for example of a lake, the more expensive the land. If it takes just 15 minutes to reach Zurich main station using public transportation, there's going to be a lot of demand. Prices will vary accordingly.
Now let's assume that the prospective buyer likes the building plot and wants to buy it. What are the next steps?
If the buyer is basically in agreement with the vendor, the vendor orders a draft contract from the notary's office. This contains a lot of official clauses, but vendors can formulate certain points themselves. Once the draft is ready, it's important for the buyer to check the contract. Perhaps there are certain easements on the plot that represent an advantage or a disadvantage for the future owner. Changes to the contract are then negotiated between the two parties.
Should the buyer seek professional support in checking the contract?
The notary is obliged to explain the contract of sale. This is generally sufficient for a basic understanding. The buyer can also give the contract to an attorney or a specialist to be checked.
Finally, in your experience, what are the most frequent mistakes that people make when buying a building parcel?
Fortunately, people don't make serious mistakes very often. People looking for building land can find plenty of information and advice on the internet. If they then consult the relevant experts, nothing usually goes wrong.