I recently represented a Buyer making an off er on a 6.6 acre, unsubdivided land parcel in Marana Arizona at the base of the Tortolita mountains. It was a flat, fully usable and beautifully vegetated property with “all utilities” in an area of extremely high priced neighboring custom homes and lots and spectacular views of the entire Tucson Basin.  Tucson’s most exclusive and expensive subdivision before a developer bankruptcy and a rash of foreclosures, Saguaro Ranch , with lots starting at over 1 miliion dollars is one of those neighbors. With the SR (Suburban Ranch) zoning in place allowing for a lot split into two, 3.3 acre  homesites, comparable parcels were selling in the $800,000 range in 2005/2006. This Bank Owned property came on the market for $289,000 and my client immediately put it in escrow at $280,000. From all appearances, we just found an absolute steal, or Ganga, as we say in Tucson.

Upon our first visit to Marana’s Planning Department  we were in for a rude awakening. We discovered that our parcel, along with a neighboring 3.3 acre parcel, had previously been split from  a 10 acre parcel and because this split had not been properly submitted to the Town, before the issuance of any building permits  they would require this “illegal lot split” to be corrected by a re-submission. Further, because the access road shared by both parcels was a busy one, the Town would  allow only one driveway entrance to serve all three potential homesites.  This would force the creation of cross easements,  road maintenance agreements, and extremely long, expensive and desert scaring driveways. In checking futher, despite having an 8″ Tucson water line on 3 sides of our property, because of an on-going jurisdictional dispute between Tucson and Marana, neither would provide water to the site and my Buyer would have to drill a well until the dispute was resolved. And if he decided to do that, he would have to share the well with the adjacent 3.3 acres as Marana wouldn’t allow 2 wells so close to each other.

So if my Buyer wanted to proceed he would have to work in conjunction with the adjacent owner, whom he has never met,  to survey the properties, agree on easement and well locations to satisfy 3 homes,  file for Minor Land Division Application fees, hire a Civil Engineer for the driveway design and access plan, hire an Attorney for easements,  road and well share agreements, and hire a well driller and paving contractor to do the work. After coming up with an $80,000+ estimate and wondering how many untold hours and how much stress would be required, he decided to walk away.

I took away several lessons from this experience. In most cases, lenders know very little about property they have taken back and unless the listing agent has done extensive  research, a Buyer is offered very little other than a “great price”. These transactions are usually not “black and white” . Expect the unexpected and lots of twists and turns. Not every Buyer has the desire or personality to tackle this type of transaction. Finally, a Buyer must be prepared to spend extra time and money during the due diligence phase to solve the problems that are uncovered.

Don’t get me wrong, I still believe there are some incredible land buying opportunities for the individual buyer or investor in Tucson. Just go in with your “eyes wide open”, assemble an expert team and know, the price isn’t always the price.

This entry was posted on Monday, September 28th, 2009 at 7:12 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.