Well, we just closed the purchase of our lot. We had hoped to close on both the lot and our construction loan at the same time, but the gods (and the appraiser) conspired against us. Thus, we closed the lot today and will close the loan (and start building our house) soon.
When we initially put this lot under contract, we included a contingency regarding suitable positioning of the house and septic system. It took a bit longer than expected to get the septic approval, which delayed our purchase of our house plans as well as the finalization of our contract.
Since the lender requires both the finalized plans and the signed contract, our loan approval has been running behind. We thus had to go ahead with the lot closing before the loan was ready. No big deal, as we’re paying cash for the lot, but it will cost us a bit extra in terms of the title work.
Closing process and fees
As for the closing process, it was painless. We met the current land owner (the developer of the neighborhood) at the closing attorney’s office, shuffled a bit of paperwork, signed our names a few times, and went on our way.
Per state law, we had already wired the proceeds to the attorney’s escrow account, so we didn’t even have to write a check. The base price of the lot was $65,500 and the closing costs included:
- Title examination: $125.00
- Attorney’s fees: $300.00
- Recording fees: $12.00
- State taxes: $65.50
- Total closing costs: $66,002.50
We also had to pay $1,000 to the developer for the water meter, but this will be credited back to us when the builder makes his first draw. The reason for this arrangement is a bit esoteric, but it has to do with the developer having pre-paid for the water meters when first setting up the subdivision.
We were also credited back for the $1,000 in earnest money that we handed over when we initially signing the lot contract, and the developer paid us $121.59 for property taxes incurred from January 1st through the closing date. We’ll pay the full bill ourselves at the end of the year.
So the full amount that we paid out today was $65,880.91, though our true cost was the $65,500 + $502.50 in closing fees.