A House in the Country

It’s a beautiful life, living in the country –  distant neighbors, little traffic, less noise. You’ve got your lovely little farmhouse, maybe a garage, maybe a chicken coop or a horse barn. You’re surrounded by prairie wildlife — or corn fields — and the livin’ is easy.

Well, maybe not that easy.  Or at least getting there may be a little more complicated than you think.

As a Realtor working in Marion County, I get lots of queries about country homes, so I thought I’d lay out some of the basics of buying an existing country home or building a new one.  My sources for this topic were Missy Poffenbarger, Marion County Zoning Administrator, the 2013 Marion County Comprehensive Land Use Plan (which can be found on the Marion County web site and which is a treasure trove of cool maps, if you like to geek out on maps, like I do), Jason from MidAmerican Energy, Randy Branson from Marion County Rural Water Association, and Robin Redding from Two Rivers Coop in Pella.

Rural IowaFirst you need the location.

Aside from what kind of terrain and view you desire for your country home, zoning issues do come into play in buying and selling property in Marion County.

Land use ordinances vary significantly from county to county in Iowa; for example, some counties set no requirements on rural land use, others don’t allow any homes to be built in agricultural zones at all.  Marion County uses zoning to help implement a long range land use plan.  Most of the county is zoned A1, which is the designation for an agricultural district. Towns are a mix of residential, commercial and industrial zoning designations, and there are pockets of residential zones scattered throughout the county, as well as a few undesignated areas. Check out the Beacon map site for your county to learn more about zoning in your area. Go to the Marion County Beacon site for more information on individual parcels in our county.)

So what does this mean for those of you who want to sell or buy a rural building lot or home?

  • If you own land that is zoned A1, and you wish to divide a small parcel either for sale, or perhaps to give to your child, the division must be at least 3 acres, and the parcel must have access to a county road (i.e., it may not be a ‘land locked’ island without egress to a road).
  • If the land was divided sometime between 1985 and 2010, the parcel may be no less than 1.5 acres. (Why? In 1985, the County decided to allow 1.5 acre building lots, but after 25 years, it became apparent that too many septic systems had been built too closely together; moreover, larger and larger homes and garages were being built, and setbacks were becoming an increasing problem. So, the County reverted to the earlier 3-acre requirement.)
  • No more than 4 three-acre parcels, with no more than one dwelling on each parcel, is allowed in any given 40 acre tract, in an A1-zoned area. Rezoning is required if you want to go above this limit.
  • A building permit is required for any permanent structure built in Marion County — one benefit of the building permit, is that a 911 marker is generated for the structure, allowing emergency services to find the correct location, should they ever be needed. For more information on obtaining a permit, go to the Marion County Zoning page.
  • Each dwelling must have its own septic system, which must be built according to county regulations and maintained in a non-polluting state. If you are buying an existing home with a septic system, you should know that many lenders require an inspection of the system before approving the sale. If you are selling a property with a septic system, wouldn’t you rather have the issue addressed BEFORE it holds up the entire sale process?

Next, you’ll need Utilities

Electricity
If you are buying an existing home in the country that already has electricity, natural gas, and rural water hookups, you will need to call to have the utilities put in your name, just as you would in the city.  But if you are building a new home on a lot that does not already have utilities run to it, the cost can be significant.  Depending on how far your lot is located from the main lines, you some sources suggest that you may want to look into setting up your own systems such as drilling a well or installing geothermal, solar or wind energy systems.

I spoke with Jason at MidAmerican about the costs involved in running electric lines to a rural property. He laid out some ball-park guidelines to consider. Basically there is a per-foot charge to run power to your property, so the farther you are from existing power lines, the more costly it will be. There are two classes of lines, for the purpose of this explanation:

  • Primary lines that run from the main power line to the transformer which converts the high voltage power to ‘usable’ voltage. Most customer prefer to have these lines run underground. Cost: about $15/foot.
  • Secondary lines that run from the transformer to the house, geothermal system, barn, etc. The transformer should be no more than 200 feet from the house. Cost: about $6 per foot.

Gas
propane tankMany rural homes use propane gas to heat water and run furnaces.  You will need to buy a large propane tank, have it hooked up to the house, and make arrangements to keep it filled.  Many folks decide to go with a budget billing, and many also have their tanks filled in the summer when prices are lower. I spoke with Robin Redding at Two Rivers Coop in Pella for some idea of the costs involved.

Propane tanks come in 2 sizes, 500 and 1000 gallons. Most residential customers use the 500 gal. size. These tanks are available three ways: New, used, and reconditioned (which means the valves of a used tank are replaced). The tanks may be bought outright, or paid for on an installment plan over several years.  For example, a used 500 gallon tank is $650 plus tax. If you wish to pay for it over time, you will pay the tax up front ($175.50) and 4 annual payments of $130 each. This cost includes 2 pads and installation of the tank and digging up to 50 feet of line to the house. If you need more than 50 feet, you will pay and hourly labor charge (about $60 per hour) plus 50 cents per foot (over the initial 50 feet).  Additionally, you will need 2 regulators — one for the house, one for the tank — and some tubing, this is about $200.

Then  you will need to fill the tank and keep filling it as gas is used.  This is not an automatic process!  As of today, propane gas costs $1.12 per gallon, but this fluctuates considerably, peaking in the winter months.  Your tank can be filled up to 80% of its capacity, so figure about $425 to fill it today.  Most customers do a summer fill, and then need additional fills 2-4 times each winter. A very ballpark figure for average home annual propane cost is $1000. There are programs that allow customers to lock in the summer price — call your gas provider for more information.

Water Tower

Photo courtesy of IowaBackRoads.com

Water
Most country homes make use of the Rural Water system, and in our county it is the Marion County Rural Water Association that provides water outside of the towns.  Some areas access Mahaska Rural Water instead.  I spoke with Randy Branson at MCRW for details.

Once again, cost to get the water to  your new country home depend a lot on how remote the home will be.  Generally, to connect your home to the water system costs a hookup fee of $1200, plus $375 if the location is along a gravel road, and $425 if it is along a paved road.  If it is necessary to bore under a highway, there is a $10 per foot charge, with an $800 minimum.

If you are extending an existing water line, you’ll pay a bit less, at $2 per foot, with another $250 for a new cleanout.

So, there you have it, the basics on location and utilities. There are also other considerations such as alternative power sources, fences, driveways, livestock enclosures, etc., that may need to be considered, depending on your particular situation, so I’ll address those topics in my next post!

About Non-Conforming Lots

Knoxville Zoning Map You may have heard that our community is dealing with a bit of a crisis surrounding the regulations around what are termed ‘non-conforming lots’. Just what is a non-conforming lot? And what’s the big deal?

A non-conforming lot, in any municipality, is a lot that does not meet the minimum size standards set forth in that municipalities’ ordinances.  In Knoxville, specifically, a lot must be 60 feet wide and at least 7200 square feet to be considered a conforming lot. There has been a bit of discussion about whether or not that 60 feet of width must be at the street, and according to City Manager, Harold Stewart, it does not. So, for example, in the case of a pie-shaped cul-de-sac lot that is not 60 feet wide at the street, but does meet that width farther back in the lot, the lot is considered to be conforming.

This standard was set by the City Council in 1983, and at that time those lots throughout the city which were non-conforming (over 400 of them based on a recent count) were ‘grandfathered’ in; and any structures on those lots were allowed to stand, with the stipulation that any future structures on the lot are prohibited. Additionally any building lots platted after 1983, must conform to the minimum size standard.

The problem with non-conforming lots in general is that if the home which stands on one should be more than 50% destroyed by fire or other disaster, the owner will not be allowed to rebuild their structure.  In the past, the city has been known to issue a re-build letter, granting a exception to the code, when a home built on a non-conforming lot is destroyed.  This has been an infrequent occurrence, simply because the need for it has been rare.

So why is it suddenly an issue in Knoxville?  The answer is a bit complex: On the one hand, there is a newer city administration that was given a clear directive by the City Council to enforce those laws and ordinances that are already on the books.  They are taking this directive seriously, and have stated that they will adhere to the letter of the law, and do not foresee issuing any re-build letters on non-conforming lots.

But the biggest change has taken place in the banking industry. As banks and mortgage companies are faced with tightening regulations in the wake of the recent economic crisis, among many other changes, they have been paying more careful attention to local ordinances related to conforming lots. Some mortgage companies or government loan institutions will not finance a home on a non-conforming lot at all, or may require a bigger down payment for this type of property.  Further, owners of non-conforming lots must often have an additional insurance rider on the property to cover rebuilding in a new location, should their home be destroyed and not allowed to be rebuilt in the same location.

What does this mean, practically?  It means that if you own a home on a non-conforming lot, it may be more difficult for you to sell it. The issues that come with such a lot are a deterrent, in the first place; plus the pool of potential buyers is smaller when options like FHA or VA loans, or low down payment loans are ruled out. Further, loans on non-conforming lots are more difficult for banks to sell on the secondary mortgage market, which naturally makes the banks hesitant to loan on these types of properties.

2015-04-24 10.29.18If you have a non-conforming lot, it also means that you should make sure that you have insurance coverage for your home that will protect you even though your lot is non-conforming.

What can be done? The Realtors, bankers, insurance companies and the County Assessor recently brought this issue to the attention of the Planning and Zoning Board, the City Manager and Assistant Manager, and also alerted the local media. Our intent was to let people know that many of them had one of these lots, and that they need to take steps to be sure they are protected. We also felt that there are steps that can be taken by the city to amend the ordinance, to offer relief to owners of these lots, who are in many cases lower income or elderly residents living in small homes in older neighborhoods.

The City Manager and the Planning and Zoning Commission are now addressing the issue, and hope to be able to come to a quick resolution.  As of earlier this week, Stewart told me that he has taken the research presented by the concerned Realtors and the County Assessor, including identification of non-conforming lots and the ordinances of several similar communities which address this issue, and has done his own research on the topic and has come up with a suggested plan that will be taken to a professional City Planner in Des Moines early next week.

Possible solutions include some combination of decreasing the minimum size of a conforming lot, allowing for rebuilds on those lots platted before 1983, within certain parameters, and adjustments to the ordinance.

We look forward to the City Planner’s recommendations, and to the city’s implementation of changes to the ordinance.  In the meantime, you can check your lot’s dimensions on the Marion County Assessor’s Beacon website, and if your lot is smaller than 60 feet wide with a total of 7200 square feet, you may want to have a conversation with your insurance company!

What to do when you find the right home?

One of the best things about my job is showing homes. I have the pleasure of escorting clients as we tour homes in search for the one that meets their criteria. I’m always amazed at how the interior of a home is another world, hidden from view, and full of surprises. Some are in better shape than others, but everyone is looking for something different, so even a fixer-upper in dire straights can be the One for the right buyer.

I recently showed a new listing in a neighboring town to a couple I’ve been working with for a couple of months. They have specific criteria, and are serious buyers, and this home hit all the right notes for them. I was so happy to have finally found the One for them!  They loved it.  Then, on the drive back home, I got a call from the listing Agent, asking how my showing went, and letting me know that if they were interested, he also had another offer coming in, in case we wanted to also make an offer to be considered by the seller at the same time.  I relayed this information to my Clients, but when it came down to it they weren’t really ready to jump on the opportunity, and lost out to the other buyer.

The Moral of the Story?

I was disappointed in myself for not helping my Client be more prepared. We had discussed things like pre-approval letters, but I hadn’t followed up to be sure they really were ready to rock and roll when the right opportunity presented itself. In the current market of low inventory, when you spot the property you want to buy, you need to be in a position to move quickly!  This means that you need to do some prep work before hand to prepare.

One of the most important first steps is to have that conversation with your banker. Find out what your do-able price range will be, get pre-approved, and get a letter from the bank that certifies that pre-approval status and can be included with any offers you may wish to make. Without that letter, your offer may not be seriously considered. Some banks prefer to issue the letters for specific properties, but a general letter is nice to have on hand, especially if you are house hunting on a weekend and need to be nimble with your offers.  If you will be paying cash for a purchase, you will need a letter certifying that you have the funds to do so.

Before you head out to look, consider the possibility that you may find that great property that day, and decide what you are willing to do about it. Are you prepared to sign your name on an offer?  Have you had those serious talks with your spouse? Have you discussed which locations you would be willing to live in, or what features are deal-breakers or deal-makers? Are you ready, in your own heart, to sign that check or that mortgage?

In other words, are you mentally and emotionally prepared to jump into the real estate game of offers and counter offers? You won’t be alone, your Realtor will be there to interpret, to guide the negotiations, to stay on top of things — but you need to be ready, willing, and able to make a viable offer, or you may lose out on the property you want to call home.

Take your time and prepare yourself before you venture out into the heady world of house-hunting, get that letter from the bank, know how much you are able to spend, and be sure about what you want to do if and when you find the house you want to commit to.  If you are faced with a quick decision, and need to be able to pull together a fast offer, you will not be working in a panic, you won’t be making any spur of the moment choices, you’ll just be taking the next step in a well-planned process that will culminate with you living in that wonderful new place you’ll call home.

What your Realtor can do for you

This is Part 3 of a series about selling your home.

Once you have made the decision to sell your home, and have gotten your financial ‘ducks in a row’, you may be ready to hire a Realtor.

Selling a property is a complex business that extends far beyond listing the home, showing it to prospective buyers, and collecting the money when it’s sold. A good Realtor will shepherd you through the process of pricing the property, readying it for sale, listing it, marketing, processing offers, inspections, and finally all the intricate aspects of closing.

Your Realtor will work to get you the best price for your home, they will know about the new regulations on lending, about local zoning issues, and they will know when to accept an offer and when to turn it down.  More than ever, in these days of changing regulations and for-sale-by-owner homes, you need a professional on your side.

So, how do you find a good Realtor? In our small town environment, word of mouth is a great way to find someone who is leaving happy customers behind. Be sure your agent is licensed and working for a reputable broker, and take the time to interview a couple of folks before you choose the person who will be helping you through such an important process. Marion county has many fine agents, and finding just the right fit for you may come down to whom you feel comfortable with, who has a great reputation, and who has the marketing power to get the word out about your listing.  After all, your agent will guide the way through a labyrinth of emotions, paperwork, personal questions, and stressful wait-times — be sure you trust them and like them.

Below are some links to articles with more good advice on selecting the right Realtor for your needs:

How to Find a Realtor from Realtor.com
184 Tasks Agents Do for You
How to Find and Keep a Real Estate Agent you Love

It’s a Seller’s Market

You’ve probably heard by now that it’s a seller’s market.  But really, it is!  All over Iowa and beyond, the inventory of homes for sale is at historic low levels.

What does that mean for you?

It means that if you have been thinking about selling your home, you should think seriously about getting it on the market, because your chances of selling quickly are quite good.  Winter is often a slower time for home buying and selling, but this winter has been an exception, we’ve been busy!  Interest rates are still great, and home prices are rising, so consumers are flocking to take advantage of the good conditions while they last. Many homes in our market have been selling within the first few weeks, or even days, of being listed.  Your chances of getting a strong price for your home are also good, so if you have been ‘underwater’ you might be pleasantly surprised at how shifts in the market have changed that.

When you decide to sell, you’ll need to formulate a plan to prepare the home for selling and for where you will live after the home sells. A good place to start is with your local Realtor and your banker. They can help guide you through the process of selling your home and buying a new one, from start to finish.  You should also be aware that new laws have changed the home buying process considerably in the last few years, so if you consider yourself an old hand, you may have a few new tricks to learn.

Selling your home is a serious endeavor, but some planning, elbow grease and great advice can make the process go smoothly. So this is the first of a series of posts to help you get those ducks in a row!

Coming Home

Those of us who are in on the secret know that small town and rural life is worth the commute, the lack of some amenities, the mice in the house, the dust on the shelf.  It’s quiet, except for the birds. Traffic is easy, except during planting and harvest season, when getting behind a combine on the highway is an exercise in patience. If you forget to lock your doors, it’s really no big deal.  When you go to the store, you usually run into several folks you know. If your kids are up to something, you hear about it — good or bad.  You are on a first name basis with the police, the superintendent of schools, the banker, the city council, the grocer, and the road grader. Because they’re your neighbors, your kids go to school together, and you see them in church on Sunday.

 

It’s a good life. It’s a different kind of life from the one you’ll find in the city.  And home ownership in a small town is a different endeavor too.  You may not find all the brand new amenities you desire, options in your price range may e a bit limited, you may need some imagination to find the potential in the best deal. When you decide to buy or sell, you’ll be working with people you know, which can be nice, but can also be a little bit of being up in each other’s private business.  Your realtors, bankers, and inspectors should be masters of discretion.  I know, because I’m a Realtor working for Iowa Realty in Knoxville, Iowa, and this blog is all about helping you find, finance, maintain, and sell your home in this wonderful small town environment.