| Selecting and Purchasing a Site for Your New Church|
|If your church is planning to build a new facility at a new location, you need to know how to acquire a good piece of real estate. In this article, we will look at how to select and purchase your new site.|
Selecting the Site
There are a good number of criteria to analyze when looking at a piece of land for your church site. What appears to be a "great deal" may actually not be a good value when development costs and site limitations are fully considered. Don't simply rely on the opinion of the selling agent, or on rules of thumb such as one acre per 100 seats, when evaluating the land. Land development professionals such as architects, appraisers, surveyors, civil engineers, building contractors, building inspectors, and others, can give valuable information to the church to help it determine the true value of the property. Factors affecting the value include zoning, amount of usable land, utilities, topography, soil conditions, shape of the land, location, access, environmental factors, permitting costs, and more.
When we speak of usable land, we are referring to the land that you can actually build on. This is determined by subtracting all the building setbacks, easements, and restrictions from the site and by evaluating the shape and topography of the land. The costs of bringing utilities to the site, or leveling the site for buildings and parking areas, can be a "budget-buster" for some churches. The land purchase should include a contingency clause allowing you a period of time to investigate these factors before closing.
Keep in mind that the cost of the land may seem "cheap" but the cost per acre could soar when the church accounts for the limited amount of usable land and the high development costs for the property.
Purchasing the Site
Now that we have discussed some factors to consider when selecting your church site, we should consider a contingency clause within the purchase agreement to allow the church a period of time to investigate these factors before closing. There are several ways to accomplish this "due diligence":
Option to Purchase: The church and seller can agree that in exchange for cash the church will have the sole right to buy the property for a specific time according to agreed terms. The option price is negotiable. The parties can agree whether the cost of the option will be applied toward the purchase.
Purchase Agreement with Contingencies: The church and seller may want to enter into a purchase agreement subject to certain contingencies. Those contingencies would be spelled out in addenda to the purchase agreement making the purchase contingent upon the church determining to its satisfaction that it can get financing, rezoning, utilities, feasibility and market studies, and any other information the church may deem in its interest before agreeing to close the sale. The church could even make the purchase contingent on a church vote or the results of a fund raising drive. Everything is negotiable in a real estate transaction, but everything must also be in writing. Normally, the church gives an earnest deposit to the seller that is held in an escrow account by a realtor, attorney or title company.
The church should obviously seek legal assistance or the help of a realtor expert in commercial property before negotiating any purchase.