Buying land In Dothan, AL
Buying Land In Dothan, AL
The market for land in Dothan is similar to a lot of other areas. The terrain here is mostly flat, protected lands are rare and soils are workable with minimal rock, unlike many areas in the northern part of the state. At the same time, the inventory on the market at any given time is pretty diverse. Land for sale in and around Dothan can range from large tracts of raw farm and timber-land to plotted neighborhood lots of all sizes or even tiny lots in master-planned communities to large estate-size parcels in gated subdivisions.
What Type Of Land Is For Sale In Dothan?
Types Of Land For Sale In Dothan
Developments & Planned Communities
Let’s start with buying land in developments and subdivisions since that is the most common land purchase in the Dothan area. Lots here typically range anywhere from 1/4 acre up to 2-3 acres. These can be a part of a planned community with an HOA, outside the city limits on rural road-frontage or in-fill lots in town. Things to consider with these lots are the utilities, HOA requirements, flood-zone status, easements and lot boundaries (survey).
If you’re purchasing within a planned neighborhood or an infill lot in town, there will likely be utilities already ran to the property but it’s always good to make sure. Many areas here are not equipped with sewer services in our area and will require a septic system be installed.
Clients sometimes send me properties to investigate, excited that they’ve found an inexpensive diamond in the rough. Sometimes it turns out they did find a gem but most of the time after a quick search on FEMA’s flood-zone map the property turns out to be in an active flood-zone. Most of the time if it sounds to good to be true it probably is.
Unrestricted Land
Unrestricted Land & Lots
Unrestricted land is land that has no zoning or regulation dictating it’s use. While Dothan City proper doesn’t have many of these properties, many of the surrounding towns out in Houston County have plenty of unrestricted land. If you’re looking for a place to set up a new mobile home this will be what you’re looking for. It also should be noted here that just because a property is being described as “unrestricted” by a seller that may not be the case and it’s always best to check with local municipalities to ensure you’re intended use is permissible.
Some of the more common areas to find unrestricted land in and around Houston County are towns like Gordon, Cottonwood, Ashford, Columbia, and Slocomb.
Where Are the best places to buy land near dothan?
So, where are the best places to buy land in the Dothan area? This really depends on what you’re looking for. As the saying goes, “real estate is all about location, location, location.” Here are some key factors to consider:
First, school zones. Being in a good school zone can significantly impact property value and appeal to future buyers. Houston County Schools have several highly-rated schools, so finding land within these zones can be beneficial for families and for resale value.
Next, proximity to Dothan or nearby towns is crucial. For some buyers, this means being within a short drive to downtown Dothan, while others might prefer a more rural setting with a bit more distance.
Access to amenities and services is key, too. Areas close to to good schools, like those near Wicksburg, Rehobeth and Headland are highly sought after.
Lastly, the buildability of the land is essential. Flat lots or those with minimal slope and timber are generally more desirable and cost-effective to build on compared to steep, challenging terrains. Again, always make sure your agent checks for utilities (including internet), HOA requirements, flood-zone status, easements, and lot boundaries before making a purchase.
What Documents Do I need to buy land in dothan?
Buying land in Dothan is pretty straightforward in terms of paperwork. We use a “Land Purchase Agreement” that’s similar to the one used for buying homes. In this contract, we’ll specify a Due Diligence Period, giving buyers time to thoroughly evaluate the lot with the help of their agent before making a final purchase decision. This Due Diligence Period allows buyers to terminate the contract for any or no reason, eliminating the need for separate contingencies for financing, surveys, etc.
Other documents may be involved, like a survey, deed or a preapproval letter from a lender, but the Land Purchase Agreement is the most crucial document in a land sale in Alabama.
What Due diligence should i do when buying land in dothan?
When buying land, it’s important to consider how many “unknowns” there are, especially compared to buying an existing home. Land buyers need to consider restrictive covenants, zoning ordinances, access to utilities, and construction costs. It’s also wise to get a survey done.
Covenants, conditions & Restrictions
covenants, conditions & restrictions (CCRs)
Restrictive covenants, like architectural requirements, dictate how you can use the land, what can be built on the lot, and may even impose minimum square footage requirements and specific construction materials. In some communities, these covenants are enforced by a Homeowners’ Association (HOA).
In the Dothan area, you’ll find some land with deed restrictions but no formal HOAs, as the restrictions may be minimal and don’t require an overseeing body. Some communities do have a HOA, which might only exist to collect dues for private road maintenance. Others have HOAs that handle more extensive responsibilities, like maintaining amenities and other common areas.
Zoning Ordinances
Zoning Ordinances
In Dothan and Houston County, local zoning ordinances set the rules for how real estate can be used. While zoning here is generally straightforward, other areas can have more complex zoning regulations. For example, certain counties have unique zoning overlays to protect historic buildings and future use. These overlays make sure that development doesn’t disrupt a city’s development master plan, while also maintaining an aesthetic appeal for residents and visitors.
It’s important to note here that for the most part each individual established town has it’s own zoning requirements and it’s wise to check with leaders in a given area if you’re interested in pursuing a land purchase within their town limits to go over any questions you might have in regards to how the land can be used. Asking for forgiveness later instead of permission up-front can be costly.
Access to Utilities
Access to Utilities
One of the key aspects we focus on when buying land in Dothan is utilities. Unlike city areas with extensive public water and sewer lines, many properties here rely on septic systems and private wells. As buyer’s agents, we often assist clients in applying to the county’s Houston County Health Department to evaluate lots for a septic permit before closing. This step ensures that the land is suitable for building and meets all necessary health and safety standards.
While public water and sewer can be available in rural parts of Dothan, and are usually accessible in urban locations, never assume they’re available without confirming with the local water department. Natural gas is typically found in more developed areas of Dothan, with propane being a popular alternative in other areas. Always verify the availability of these utilities before proceeding with a land purchase.
One of the most common questions we get about land is, “What kind of internet service is available?” Land closer to Dothan often has high-speed cable or even fiber internet, which is the fastest option in the area. The more remote the land, the more likely it is that internet service will be provided by a phone company (typically as DSL) or a satellite internet provider like Starlink. Always check with local providers to confirm the type of internet service available before making a purchase.
Land Surveys
Surveys
Many land listings come with a boundary survey, but if not, you can order a new survey during the Due Diligence Period. Surveys do more than just show lot lines; they can also reveal encroachments, easements, topographical (contour) lines, and improvements on the property. Getting a new survey ensures your title insurance policy, obtained at closing, will cover any future survey-related title issues. This step is crucial for protecting your investment.
Obtaining Financing On Land
Getting Financed For land
After the real estate bubble burst, many lenders were hesitant to finance land due to the high number of speculative purchases that ended in foreclosure. However, times have changed, and lenders are now more open to offering loans for land purchases. We’ve found that credit unions and smaller community banks are particularly willing to finance land, making them a great resource for buyers looking to invest in property.
If you’re planning to buy land and start building right away, a construction loan might be a great option. These loans can help you purchase the land and cover construction costs, then transition into a conventional mortgage once the build is complete, often without needing a second closing. If you’re looking for local land lenders, give us a call for some recommendations. Many local lenders in the Dothan area offer programs tailored for land buying and building.
When it comes to financing land, it’s good to remember that it’s a bit riskier for lenders, so the terms aren’t usually as favorable as those for a home mortgage. You can expect slightly higher interest rates, often about a point higher than for a house mortgage. Loan terms are typically shorter, around 10-15 years, and the down payment requirements are usually higher, often at least 20%. For example, while a $2000/month mortgage might buy you a $400,000 house, it might only cover a $300,000 lot. However, most people don’t hold onto their land loans for long. These loans are usually just a temporary solution until construction begins in a few years or less.
What does it cost to build a Home in dothan?
This is the question everyone wants to know: “What’s the typical price per square foot to build in Dothan?” Honestly, there’s no simple answer. There are just too many factors that go into building a new home. For instance, building on hilly wooded lots costs more than building on flat and cleared lots. The type of home you plan to build, and the quality and finishes you choose, also play a big role in the cost. We suggest talking to a general contractor or an architect about your building plans. This can be done during the contract due diligence period if you don’t already have a builder in mind just yet but we recommend finding a builder before putting a piece of property under contract. We’ve worked with several builders in town, so we’ve got you covered if you need suggestions on who you can trust.
What does land cost Per Acre In dothan
What does land cost per acre in dothan?
This is another tough one to answer without getting specific. We need to compare apples to apples. So, a better question might be:
“What does a reasonably flat one-acre lot cost in Rehobeth School District that’s unrestricted?” Or “How much is a lot within walking distance of Downtown Dothan?” Or “What can I buy a lot for in a quiet neighborhood with public water and sewer and no maintenance in the city limits of Dothan?”
Even within a specific neighborhood, prices can vary wildly. Many lots offer great locations and even some of the lower-priced lots have great potential. However, some lots might be more challenging to build on due to their terrain, making them more expensive to develop. The higher-priced lots typically offer both convenience and a relatively easy building site.
Summary: Is Buying Land In Dothan A Good Idea?
Absolutely! But it’s important to know why you’re buying. We’ve helped many clients over the years who purchased land with the intention of building a home in the future, maybe several years down the road. This could be for their dream home or a retirement home. While these buyers will have carrying costs for a few years, they anticipate that land prices will be higher when they’re ready to build. So, the idea is to buy the land at today’s prices and spend the next few years wrapping up their plans, selling their current home, and planning the construction of their new house.
Other buyers purchase land to start building immediately, especially if they need a new home for their family. Or, they might have already retired, sold their previous home, and are renting in the Dothan area while they find the perfect lot to build their dream home.
We’ve even sold many parcels of land to speculative buyers and builders. It’s important to know that owning land is not usually an income-producing investment. Vacant lots and raw land rarely generate cash flow, but they do incur property taxes (and sometimes HOA dues). So buying land for speculation is a buy-and-hold strategy, and the owner should be prepared to hold the lot for potentially several years before realizing a profit.
Let us help you with your dothan land purchase
Our team of real estate agents is highly experienced in all aspects of land in the Dothan area. Our connections with builders, surveyors, and land developers are invaluable for our clients. We look forward to serving you and showing you some of the finest lots in the Dothan area! Contact us using the form below, and let’s get started!
