As of last Wednesday, September 29th, we officially own the land in Bellevue for our house. This is the first full commitment to the project, but also means that the whole process and timeline is now a go. We will be starting design very shortly (as soon as we recover from various bouts of busy and sickness over this past weekend), and spend the next few months on that.
The land acquisition ended up being a bit quicker than we thought. The lot was owned by the bank, so we would be negotiating with them on the price, and doing the actual purchase from them. We informed Yuval of our decision on the Bellevue 41st project, and he told us he would work on our land purchase in about a week and a half, after he had finished closing a transaction on another lot in that same project. However, less than a week later, I got a call Monday after lunch from Yuval that someone else had put in a bid for that parcel! This would have a couple of potential problems: obviously it would put our project back into limbo; but as this was someone not involved with YS Development, a one-off house along with the other four houses from the Bellevue 41st project could throw off the continuity of the community there. So we had to get an offer submitted ASAP that could beat this other offer.
We met with Yuval that evening, and he had an offer prepared to submit to the bank next morning. It was for an even $200,000, which was $25k-50k above what we hoped to be able to negotiate down to; but we felt this should be enough for the bank to accept a competing offer; and while it was at the same price as the other offer, we had the advantage that our offer was all cash (therefore a quicker process not dependent on getting financing), and did not have any brokers or agents involved (avoiding the extra commission the bank would have to pay out of the proceeds). Unfortunately, this did bump up the overall price to around $730,000. While not great, this project still offered the best timeline; and a 4% increase is not terrible. Since we've been waiting around 9-10 months, we decided that with the extra savings we've accumulated in that time, we could cover the increase, so we decided to go ahead with the offer.
Late the next morning we heard that the bank had accepted our offer; so in under 24 hours we had gone from biding our time, to having a pending purchase in place! The offer was set up to give us about 10 days to cancel if we decided the lot really wasn't feasible for us; and a few more days beyond that as a buffer so that we could maintain a closing date before the end of the month. Since YS Development had already planned on using this parcel, a lot of the work for assessing building, permitting, etc. feasibility had already been done; so it was mostly a matter of verifying that it would work for us in particular.
The first piece of this was an initial meeting with the architect to get an idea of what our house might look like. I'll cover this in more detail soon, but the short of it is that we got a good feeling for how the land would constrain our design, but also showed us the possibilities that it offered.
The next piece was to make sure everything else was in order. For the legal part, we used a benefit from Google which is (essentially) a subscription legal service, where we pay a fixed amount every month, but can use the service at any time to have a lawyer take care of standard things, such as reviewing real estate documents. A few good points were identified, and prompted us to get a title report in enough time to have it reviewed, too. There ended up being quite a few things on the title report; which isn't entirely unexpected, given that this is a recently-subdivided part of a lot in Bellevue proper which has been privately owned but not yet built on since sometime in the 1960s or so. Along with all the expected utility easements, there were also claims for a road (which has since been built and is the main access to the parcel) and similar. But nothing was objectionable, and the review pointed out a few items that weren't relevant anymore and could be cleared.
On Monday the 27th, two days before the scheduled closing, we gave the go-ahead for the purchase. We were going through Chicago Title for the title insurance and escrow/closing, since Yuval had worked with them and knew they were good. We got a closing statement and wire instructions that day, and the next morning we sent a wire transfer from our bank to the escrow account. Then Tuesday afternoon we went in-person to sign the documents for our part of the closing. On Wednesday the 29th, the bank completed their part of the transaction, and the land was officially transferred to us.
This was our first ever real estate transaction, and overall went relatively smoothly. It was fairly quick; luckily most of the hard work was done by others, especially YS Development. I probably learned the most from the lawyer's comments — while in some ways they felt like extra complications, they did help to point out issues we weren't really clear on, and helped to clarify some vague points. We also learned that in a cash transaction, the amount of documents to sign is actually pretty small (apparently that changes completely if you have financing involved); the purchase offer to the bank was a half-dozen pages (one of which we signed and the rest we initialed), the title policy was maybe 10-20 pages total (but none that we had to sign), the closing statement and documents were about 15 pages, of which we signed seven. The only large part was the supporting documentation for the title report, which was over 100 pages; but that was all copies of county and city documents and I certainly didn't read through it all.
Now that we own the land, we do have a bit of recurring expenses for it: taxes and utilities. Since it is bare property, the taxes are not too bad; about $1600 for the whole year (this will obviously go up a lot once we have a house on it). For utilities, the city bills for storm drainage for all land, though the bills should be small since the land is undeveloped (0% impervious coverage).
I will admit that the financial and business transaction parts of this process are not my favorite. I'm glad that this portion has been successfully resolved; and now we can focus on the more enjoyable design process for the next few months.
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