Northwest Indiana Business Journal
Publication date: 06/1994
By: David Lasser, CCIM

In 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 transaction.

Most 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.

The 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.

Planning and Zoning
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  If the master plan becomes outdated or the intended use does not coincide with the permitted use, one can petition the municipality for change.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 contamination.

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.

Sellers 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.

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