Pleasures and Pitfalls

Returning to the land--finding a second home somewhere away from it all--can be a happy or a harrowing experience.

Much depends on the honesty of the developer and on the care with which prospective buyers seek out and purchase their property. Here is an example of each experience:

HAPPY. Jack and Liz Cooper were so tired of constant rain in Corvallis, Ore., that they were ready to buy almost any property that was dry. They finally settled on an arid, dusty stretch in central Oregon that had been dubbed Sunriver by the enterprising developer. But the developer, John Gray, had a reputation in Oregon for making deserts bloom and rain forests shine. "It was a gamble to sink money into a development that hadn't really got started yet," says Jack Cooper. "But the master plan was fantastic."

More than that, the plan was scrupulously followed so that homeowners got what they paid for. The Coopers' $53,000 home is scenically located by the development's 18-hole golf course. Though the original plan called for a community of 12,000 people, the number has been trimmed to 5,000 with the density of 1.5 living units per acre. The open areas will be left in a natural state. "It's a different world out there," says Jack, who enjoys the nearby swimming, rafting, bicycling, tennis and skiing. The development also employs a full-time ecologist who even put a stop to mosquito spraying because of the damage to plants. Says Jack: "This is a town the Sierra Club would be proud of." Cautions Liz: "But don't tell anybody. Sunriver is great just the way it is."

HARROWING. The poignant blue skies, the silver-clear air, the surf splashing on the rocky coast proved irresistible to Bob and Jan Plunkett (not their real names) when they vacationed in Maine four years ago. A year later, Bob quit his city job as a commercial artist, and the couple sank all of their $26,000 savings in a partially completed home 15 feet from the waves on an inlet in Maine.

Practically nothing went right. Though the developer had promised a virtual utopia, he had carefully put nothing in writing. Dazzled by heady dreams of a new life, the Plunketts unwisely paid in full for their house before it was completed to their satisfaction. Once they had done so, the two city suckers could bring no pressure on the builder, who skimped as he pleased. The Plunketts were forced to pay $2,100 for an ecological sewer system and $800 for a septic tank that is still not working properly; they have been reduced to using a campsite toilet. At a cost of $1,200 they had to drill 170 feet to reach water; the flow from their well is a lethargic one gallon per minute. They were stunned to learn that they would have to shell out $875 for 25 telephone poles and lines to their house. They still have no phone. If they want to make a call, they have to go to a neighbor's home a mile and a half away.

Much of the year, the Plunketts face a struggle even to reach their fading dream house. Since their lawyer did not bother to nail down the developer's responsibility for maintaining the ten-mile access road, he did not assume any. It remains unpaved, covered by snow in winter, by mud in spring.

The Plunketts and other disillusioned homeowners expected the town to take over the road, but the local villagers have consistently voted down the proposition.

DOS AND DON'TS. Starting Dec. 1, the Department of Housing and Urban Development will put into effect tough new rules governing developers that may help some buyers escape the fate of the Plunketts. But a buyer's best defense is his own good sense. Some guidelines for potential buyers:

> Never buy land without seeing it.

> Never close a deal on the first visit to a development or while still under the influence of a glowing sales presentation. Go home and think about it.

> Never sign a paper that waives your right to rescind the purchase contract within a specified time--anywhere from two days to six months, depending on state law.

>Do not assume that the value of a lot will increase. Chances are that it is priced much higher than land just outside the development. A salesman may point out that the company's offering prices for similar lots have increased over the years--but those are the company's prices. There may be no resale market for your lot at all. Check the ads in the local paper to see if lots are being offered at distress prices.

> Contact other property owners in the development. If they are selling, find out why, and whether they are letting their lots go at a loss.

> Do not rely on a salesman's description of "planned" tennis courts, golf courses, marinas, etc. Companies can abandon plans at will.

> Demand a copy of the property report that large developers must, by law, show to potential buyers. It contains such important information as whether the soil is suitable for septic tanks and whether there is enough water.

> Find out exactly how far a plot is from the nearest hospital, fire station, shopping area, public transportation and city. And make sure that the distance is actual driving mileage, not as the crow flies.

> Ascertain the "build-out" rate, or the percentage of lots whose owners have built houses on them. A low rate--say, less than 2% of lots occupied for every year that the project has been open--could well mean that owners are dissatisfied or that they bought the lots primarily for speculation. In either case, the "planned community" of the sales brochure may always remain too sparsely settled for the company to bother completing proposed amenities or for local utilities to string telephone and power lines out to isolated houses.

> Avoid buying land on the installment plan. You will not own it--and may not even be permitted to use it--until the final payment is made. Some contracts state that if you miss an installment or two, the company can foreclose and keep all the money you have paid. Avoid a possible hassle by getting a bank mortgage. That way, the buyer receives a deed to the property quickly.

Buying vacation property that is not in a development --whether raw acreage, an old farmhouse or a cottage on a lake--requires the same care. Check with town or county officials to see if the place has been reassessed recently for property tax purposes. If not, then taxes could soar as soon as you buy. Ask state or local health or environmental authorities about water and soil quality. Talk with local bankers, businessmen, town officials and environmentalists to find out about the future of the area. There may be objectionable new highways, subdivisions or even trailer camps coming in.

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