What are the details of ‘improved’ vs. ‘unimproved’ land from a legal perspective?

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What are the details of ‘improved’ vs. ‘unimproved’ land from a legal perspective?

I want to purchase a 30-acre plot of land that includes two homes that are both in livable condition although both need some work. Currently, one of the homes is on its own 2-acre plot and is mired in a foreclosure as well as a right-of-way issue because the driveway passes through the other portion of the land. The other portion is 28 acres with another house on it. It seems to me that my desire to buy all 30 acres and both houses is a win-win for everyone involved because the bank sells a foreclosed property without having to pay to resolve the right-of-way issue, and the other homeowner gets to sell their property without a 2-acre legal mess stuck in the middle of it for God-knows-how-long. The owner of the larger plot is on board, but the bank is pulling out every excuse in the book to get in the way. Their latest is to tell me that no lenders will be willing to give me a conventional mortgage on the 28-acre plot because the land is worth more than the house, so lenders will view it as

Asked on May 1, 2018 under Real Estate Law, North Carolina

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The real issue is, no lender is *ever* required to lend to you: it is voluntary for lenders to issue mortgages, and a lender can refuse to lend to you if they feel it is a bad deal or poor risk for them. Also, no seller (e.g. the bank) is *ever* required to sell to you if they feel it's not worth doing so for some reason (too low a price, bad risk, too complicated and too much effort, etc.) Therefore, it doesn't matter what some other definition (e.g. a definition of anyone but this bank) of "unimproved" is: all that matters is that the bank with which you are dealing appears unwilling to go through with your proposed transaction: you can keep negotiating with them and see if you can get them to change their mind, but regardless of the definition of "unimproved," you can't force them to move ahead with you.


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