Quick re-cap of our timeline:
Jun 2021: Journey begins.
Jul 2021: Research. Research. Research.
Sep 2021: Listed house for sale.
Nov 2021: Moved to rental house.
Dec 2021: Viewing properties.
March 2022: Lost 1st offer.
May 2022: Lost more offers. Viewed more junk lots for sale.
Jun 2022: Under contract on North Jefferson lot.
Jul 2022: Bailed and went under contract on Ridgeway lot.
Oct 2022: Still waiting for Ridgeway partition to be completed.
Nov 2022: Uncovered major issue with Ridgeway lot and terminated.
After we terminated the Ridgeway lot, we were pretty sad. But it was clear that we would have been settling for a property we didn’t love at a very high price. (Note: 4 months later and the property still isn’t sold, I think we dodged a bullet)
Later in November, we offered $425K for a 3 acre lot with well and septic approval. It was a lot more than we wanted to spend, but the site looked very promising and we were starting to feel desperate. Unfortunately, the property owner is a custom home builder who wanted to build a home for whoever bought the land. He said that he would be willing to sell just the land by itself for $500K which we thought was totally ridiculous. Apparently, the comps for this lot were very high when first developed, and this home builder was building $1.5M to $2M homes on the adjacent properties. Next...
I happen to stumble across a several week old listing on Zillow for a 1970s house on 6 acres. The ad said “potentially dividable” which had my attention. Asking price was a lot to stomach at $750K, but they had already dropped it from $850K, so we thought maybe the sellers were motivated. I called the county to double check zoning and make sure it was able to be divided into another buildable lot, and it was confirmed possible as long as the site passed a hydrogeology review.
What is a Hydrogeology Review? Some of the areas in Oregon are within a “sensitive groundwater overlay zone” which means it is a potentially limited groundwater area. In these areas, certain developments require evidence of long-term sustainability of groundwater resources. A Hydrogeology Review is done by a registered Geologist and includes information such as: the amount of groundwater resource presently consumed, additional resource available for future development, areas where groundwater was being depleted, areas where groundwater could be depleted by approved build out, and limitations necessary to protect the resource for current residents.
A google search pointed me to an Oregon Geologist and I made a quick call. My main question was: what does something like this cost, $5,000 or $50,000? Luckily, they gave me an approximate range of $5,000 to $7,000 and that made me feel much more comfortable. I was also somewhat familiar with this report, because the previous property that we were under contract on had to go through this same Hydrogeology review process as a requirement of the land partition.
This new opportunity seemed to become more and more promising with each conversation. We made the appointment to do a viewing as quickly as possible. As we were walking through the house, it was hard to see the popcorn ceilings and poorly kept exterior – we were so focused on the potential of finally being able to build our dream house! I knew that if we split the 6 acres in half it would be instant value added, at least $300K. Interestingly, this property is only a few houses down from the overpriced 3 acre lot we tried to buy prior to this.
I should mention that this opportunity was not without some risk; we had to accept the fact that if a well driller could not find water, our dream of building would be crushed and we would be stuck in a 1975 home which needed renovation.
As usual, there was another competing bid (at least that is what we were told, I’m not sure how much I trust realtors anymore). So we wrote an offer at $750K (asking price) with an escalation clause that said we would go up to a maximum of $780K to be the highest bidder. Fortunately, the “other bid” was non-existent or lower than $750K, so our offer was accepted at asking price.
In December 2022, we went through the standard home-buying-inspection process and got the sellers to lower the price by $15,000 due to some needed repairs. On December 30th, we closed on this home and 6 acres for $735,000 with a 5/1 adjustable-rate mortgage at 5.875% interest rate. This type of mortgage made total sense for us since we would be selling/refinancing in a year or two once we start or finish our build.
Its been a long 18 months, but definitely worth the wait. It is crazy to think about how close we were to settling, multiple times! I'm not an "everything-happens-for-a-reason" kind of person, but maybe there is something to that. Be patient and go with your gut. We would not be here if we hadn't taken the leap and made some uncomfortable decisions. Set a goal and make it happen!
This will be the site of our future home build:
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