By: David Lasser, CCIM
today’s real estate market it is important for all parties
involved to know the ins and outs of what it takes to close the
transactions now require not only two parties agreeing on a price, but
also the cooperative efforts of support professionals such as realtors,
attorneys, accountants and engineers all working together.
key issues affecting the sale or development of real estate cover a broad
range of concerns that include planning and zoning, environmental,
wetlands, access and naturally, financing.
Master plans outline long range visions for the development and growth of
a community. Zoning dictates the permitted uses allowed on a given
property. If the master plan becomes outdated or the intended use
does not coincide with the permitted use, one can petition the
municipality for change. Re-zoning, variances, subdivisions, planned
unit development and tax abatement requests are examples of planning
processes that can take one to four months or more to complete.
While buyers have always had the expectation of receiving “clear
title” at closing, they are increasingly learning of the importance of
receiving property with “clear environmental.” Environmental
companies abound in Northwest Indiana and their services are provided in
phases, as needed. Phase One Assessments are written reports that
describe why there may or may not be any likely contamination present on
the subject property. Level Two Testing involves obtaining soil
samples for laboratory analysis to confirm or deny the presence of
contamination. Level Three Remediation is the actual cleanup of the
Developing property containing wetlands can range from preparing routine
drainage plans to highly sensationalized battles with environmental groups
such as Ducks Unlimited, Sierra Club, Save the Dunes and others.
Most developments require drainage plans with some sort of retention pond
and often wetland areas can be used for that purpose. Some wetland
areas are so unique that no development will be allowed to impact them.
In 1993, Midwest Steel had to set aside 50 acres in Portage because it
contained rare Lupine plants, which is the primary food source for the
Karner blue butterfly. A permit from the United States Corps of
Engineers is needed to work in a federally designated wetland.
The seemingly simple concept of placing a driveway from the street to
access a property can sometimes get complicated. Consultation with
municipal street and state highway departments can be enlightening. Among
the things to check for are if any right-of-way takings are planned for
new roads, widening, bridges, repairs, etc. A limited access road
such as U.S. 30 often requires the developer to construct frontage roads,
as well as possibly acceleration and deceleration lanes.
Financial lending institutions nationwide are all still reeling from the
magnitude of the savings and loan crisis. The Resolution Trust
Corp., founded to dispose of the thousands of foreclosure properties, has
sent a clear message for the future. Lenders will require very
thorough research of the property. Appraisers, for example, are now
required to have more experience and continuing education to perform the
new FIRREA reports. These new appraisal report formats are longer,
more detailed and naturally, more expensive.
must acknowledge how these issues effect the value of their property and
the time frame needed to close. Buyers need to research property
thoroughly, obtain professional assistance and plan accordingly.