due diligence Archives - Teton Realty Blog

No, I’m not talking about all of the so-called empty subdivisions better known as “fields”. Today, I am talking about form fields.

When a real estate agent gets a new listing the agent usually enters the listing data into the local MLS which includes all of the property information, uploads photos and documents, then clicks the magical submit button which syndicates the listings to various marketing platforms like Trulia, Zillow, and brokerage websites like TetonValleyRealty.com. When a consumer views a listing on one of these various marketing platforms, they can see the data entered by the real estate agent. The data is usually entered into predefined fields within the agent’s MLS software.

Most local agents spent quite a bit of time and entering these listings to make sure that we are not misrepresenting the data displayed to the public. Almost all of the form fields require some sort of input before the listing can be submitted. If an agent doesn’t know the answer (or in some events think they know the answer), this data is sometimes inadvertently misrepresented. I would like to think I know my way around local real estate, but even I have been guilty of this.

Because of this, there are many circumstances when I find myself arguing with a prospective Buyer about certain amenities that a property does, or does not have. Some of these are obvious, such as the view. If the listing says it has a Teton view when it in fact does not, it’s a pretty easy argument. Some, however, take a bit more time to research. I have seen listings state that water systems are available when they are not, and vice versa. These amenities (or lack of amenities) can have a significant impact on the perceived value of the property.

In the event of an advertisement error or misrepresentation, what recourse would a Buyer or Seller have? The answer (in my opinion, and depending on the situation) is; not much. Not only does the MLS and most of the advertising platforms have a disclaimer with respect to information being “reliable, but not guaranteed”, but the real estate purchase forms also have statements advising a buyer to perform their own home inspections and verify issues related to the home, including the square footage.

Sellers
My advice to Sellers in these situations is simple, closely review the data entered by your real estate agent to verify its accuracy.

Buyers
My advice to Buyers would be to query your agent and perform your own inspections to the best of your ability, and watch out for things that might be too good to be true. Most agents (particularly local agents) will not only normally have a sense as to the overall accuracy, but will also know what resources and contacts to provide for this research. I mentioned water systems above because it’s an easy box to check or not to check with respect to an available public water system or connections. Other common errors include miscalculating square footage, homeowners association dues, whether or not short-term rentals are allowed, if propane tanks are leased or owned, the allowance of horses, and connectivity for hi-speed internet.

It’s also important to remember that some things are negotiable. If a listing says that the furnishings are included, but your agent does not include the furnishings or a bill of sale for the furnishings in the offer, you may be left without them. The same goes for appliances, and other personal property.

***NOTE: This article is intended primarily for Teton County Idaho and Teton COunty Wyoming. If you are purchasing land in surrounding counties, contact me for assistance.

Yes, inspect not expect. Before I dive into this, note that I cannot outline or detail every aspect or potential problem that may come with a particular piece of property. Below is general information which can be applied to any lot, but special inspections or considerations may need to be explored.

Oftentimes I get comments or questions from potential buyers with respect to buying land. It’s usually one extreme or another. For example, some buyers live in areas with soils that are not very permeable or along the coastlines. They have major concern about the viability of septic systems. The other extreme usually comes from buyers to haven’t had a bad experience and question whether they even need an inspection at all.

When buying land it’s important to remember that you probably aren’t going to be working with someone like a home inspector that you might contact when buying a home. Likely, YOU will be the inspector – or more accurately, the investigator.

With that said, where do you begin? The best place to look for recommendations for contact information is your real estate agent. Your agent should have a clear understanding of the Teton Valley Market and the nuances that come with buying land. They may not have run into every potential problem or experience that may come with buying land, but they’ve likely been through more transactions than you have, each one is a different experience. That being said, there are a certain number of key points, and the Idaho Real Estate Association tries to help you by outlining some of the potential areas to investigate. As of this date, the Idaho Purchase and Real Estate agreement states that a buyer can inspect any element of the property including size, boundaries, zoning, utilities, hazardous waste, and taxes. I might add building feasibility or eligibility to this list as well.

Before I dive into this list, it’s important to remember one last item that you may need to be aware of prior to even writing your offer. There is an increasing number of real estate agents who believed that the seller must grant permission to allow certain types of inspections. Primarily, I have run into test holes for septic site analyses. As a courtesy, I usually send a note to a seller’s agent and inform them that we will be performing this inspection. More than half of the time, the seller’s agent is up in arms with concerns about not asking permission and liability. I believe that the Idaho agreement covers this, but you may ask your agent to include language that they will allow these types of inspections.

With that said, let’s get started. As you read through these suggestions, remember what I outlined at the preface of this article, this may or may not be a complete list. There’s going to be special considerations with any property that potentially need to be explored.

***Please see the resources below if you would like to skip the summaries.

Recorded Documents: Usually when I write an offer, I will make sure that the review period expiration for the title report comes first and the actual due diligence (inspection) period expiration comes last. The title report will expose documents that are in the record such as subdivision covenants (CC&Rs) and plat maps.

Site Location, Boundaries and Size: MOST parcels are in a subdivision of sorts which means they will have an accompanying plat map. It’s important to remember plat maps can be amended. If you follow the order of operations, you should have the latest iteration of plat maps and CC&Rs from the title report mentioned above. If the parcel is not in a subdivision, a survey of record is still usually available. If it’s not, and you did not ask for a survey or at least corner flagging as a part of your offer, you can hire an engineer to complete these tasks. Corner flagging is usually under $500, where a survey can cost much more.

Zoning: If you are in Teton County, the County has prepared a one-stop-shop for zoning at tetonvalleycode.org. It’s a bit tough to navigate, but has all of the information you need. See the resources section, below, or visit tetonvalleycode.org.

Utilities (Well & Septic): In Idaho (and similar in Wyoming) you must have at least 1 acre to have both a well and a septic. That said, if you have a half acre, you can usually have a well or a septic. Oftentimes we see some creative thinking with developments that may be one half acre lots with wells, then the septic systems are in the open space of the development, or perhaps there is a community water system but each lot has it’s own septic. Packsaddle Creek Estates in Tetonia and Grove Creek in Victor are examples where the community has a water system, but each home has a septic. Wells vary in depth throughout the area, but the Idaho Department of Water Resources does track well depths and I am proficient with the tools they have available for research – so don’t hesitate. At the time of this writing, well costs are about 55/foot, with a pump. There are a few areas in Teton Valley where depths are extreme, usually at the end of 4000 N or on the North end of Teton Valley. Wyoming doesn’t have a tool that I am aware of, so I’m not up to speed on depths in certain areas. As far as septic systems go, they are relatively inexpensive to install, and reliable. The soils in most areas are of a rock or gravel substrate, so drainage is good. There are a few areas where “enhanced” or “raised mound” systems are required by the health department, those areas are usually in watershed areas next to creeks or rivers. This said, basements are relatively common in the area. The soils can be tested before completing a purchase, and the cost is in the range of $500 to $800. They are coordinated with the local health official and an excavator. The excavator digs a hole, the health official records the data, and they fill it back in. The process is usually referred to as a site analysis.

Utilites (Water & Sewer): Most areas rely on a well and septic with the exception of the Driggs, Victor, Tetonia & Jackson City limits and a few subdivisions which have city services but are outside the city limits such as developments like Teton Springs which have City sewer. Other examples would be communities with private water systems such as Rivermeadows in Victor and Targhee Towne in Alta. Each utility or service usually comes with a maintenance fee, or a monthly bill. Note that a failure in a community system would likely result in an assessment. Many see a benefit in a municipal system to avoid the cost of drilling a well or installing a septic – but beware – hookup fees can also be quite expensive, usually around 2/3 the cost of a well and septic.

Utilities (Phone & Internet): There are two main types of internet service in the area, and that is DSL or Fiber and Satellite. DSL is usually provided by the phone company (Silverstar Communications in almost all areas) and there are a handful of satellite providers. In my experience a hard line such as DSL or Fiber is most reliable, but some of the rural areas have old lines that have been dug up by farmers and road crews a few hundred times. The local phone company can easily to a check on the address and provide pretty accurate information. The counties required phone line installation to each subdivision lot in almost all cases, but it’s always good to check. There are a few developments out there that have conduit, but no line.

Utilities (Electricity): Electricity in Teton Valley and Alta is provided by Fall River Electric, Teton County WY (excluding Alta) is provided by Lower Valley Energy. Fall River Electric is a CoOp, so members get a nice check every 15 or 20 years (hey, can’t complain). The other good news is that electricity is very inexpensive, roughly $0.075 per KW Hr at the time of this writing. Just like telephone lines, electricity is to the boundary of almost all subdivided lots. Those without lines may require transformers to boost depending on the distance to the area where power is needed. In rare events, overhead power poles and lines can, or need to be installed.

Soil & Hazardous Waste: Most land buyers go as far as a site analysis for septic (see well & septic section above) but no further. If the parcel in question is in a wetland, it may be a good idea to contact the county mapping director to get an idea on nearby floodplains. Rarely a customer will do additional soil testing for hazardous waste – a good example might be an old junk yard or an area with buried fuel tanks. Usually these tests are performed by environmental engineers, and there are some great local companies.

Taxes: Usually when purchasing property the title company will pro-rate taxes to the date of closing. It may however be a good idea to have the title company (or you) contact the city or county to make sure there are no outstanding assessments for improvements.

Building Eligibility: I added this section as this has been a point of contention, specifically in Teton Valley, Idaho. Historic “illegal” lot splits, or land splits that were done only for agricultural purposes have been surfaced and recent administrations have denied the ability to obtain a building permit. Though these cases are becoming rare, it’s still possible. Other examples would be subdivisions with fire systems that are out of compliance. For these reasons, it is a good idea to check with the applicable City, County OR Fire Department to insure building permits can be issued.

***Resources: Note, I will do my best to keep this INCOMPLETE list up to date and accurate. If you are a contractor or vendor not on this list, contact me! I would be happy to add you.

Zoning

Teton County, Idaho (includes Driggs, Victor, Tetonia)

If you are purchasing land in one of the cities such as Driggs or Victor, they will have their own site and information which you may be directed to, cityofdriggs.org | victorcityidaho.com | tetoniaidaho.com FOR ALTA, it’s best to visit Teton County WYOMING’s website, tetoncountywy.gov.

Otherwise, the BEST resource for zoning information is Teton Valley’s one-stop zoning resource, tetonvalleycode.org.

Building Eligibility & Permits

Teton County, Idaho (includes Driggs, Victor, Tetonia)

Planning & Zoning

208-354-2593 (phone)
208-354-8410 (fax)
[email protected]

Teton County Building Department

208-354-2593 (phone)
208-354-8410 (fax)
[email protected]

Teton County, Wyoming (includes Alta, Jackson, Wilson)

Planning, Building & Development

307-733-3959 (phone)
307-733-4451 (fax)
https://www.tetoncountywy.gov/518/Planning-Building

Well Research

Water Well Research Idaho Department of Water Resources
http://www.idwr.idaho.gov/Apps/appsWell/WCInfoSearchExternal/
Eastern Regional Office
900 North Skyline Drive, Suite A
Idaho Falls, ID 83402-1718
P: (208) 525-7161
F: (208) 525-7177

Septic Research

Teton County, Idaho (includes Driggs, Victor, Tetonia)

East Idaho Public Health Department
http://www.eiph.idaho.gov/
Teton Valley (Savannah Rice)
208-354-2220
[email protected]

Site Analysis Excavator suggestion:
Action Excavation
208-354-3478

Municipal Water & Sewer

Teton County, Idaho (includes Driggs, Victor, Tetonia)

driggsidaho.org
victorcityidaho.com
tetoniaidaho.com

Wetland Research

Teton County, Idaho (includes Driggs, Victor, Tetonia)

(Contact Teton County for Wetland Overlay first)

Army Corps of Engineers

208-522-1645
http://www.nww.usace.army.mil/Business-With-Us/Regulatory-Division/Contact-Us/