The Definitive Guide to Lot Selection for Your Custom Home: A Due Diligence Report - part 6

Subsurface Investigation: Uncovering Ground-Level Risks

While topography and legal constraints are visible or discoverable through public records, some of the most significant risks and cost drivers in a custom home project lie hidden beneath the ground. The composition and stability of the soil, the land's ability to handle water, and its potential contamination from past uses are critical factors that must be investigated before a purchase is finalized. Ignoring this subsurface due diligence is a gamble that can lead to catastrophic budget overruns and long-term structural problems.

Geotechnical Soil Testing

A geotechnical investigation, or soil test, is a scientific analysis of the earth upon which the home's foundation will rest. Its purpose is to determine the soil's physical and chemical properties to ensure it can safely support the structure.Who Performs It: This critical analysis must be conducted by a licensed geotechnical engineer or a specialized soil engineering firm.

• Process: The engineer will typically drill several borings on the proposed building site, extracting soil samples from various depths. These samples are then taken to a laboratory for a series of tests.
• Key Tests and What They Reveal:
  • Soil Composition and Classification: This analysis identifies the mixture of gravel, sand, silt, and clay in the soil. This is crucial because different soil types behave differently under load. Of particular concern are
    expansive soils, such as heavy clays, which are common in many regions. These soils swell significantly when wet and shrink when dry, exerting immense pressure on a foundation that can cause it to crack and fail. Building on expansive soil is possible but requires a specially engineered—and significantly more expensive—foundation, such as a post-tensioned slab or a pier-and-beam system.
  • Bearing Capacity: This test measures how much weight the soil can safely support per unit area. The result of this test is a critical input for the structural engineer who designs the home's foundation, determining the required size and thickness of the footings.
  • Shear Strength: This test measures the soil's internal resistance to forces that would cause it to slide or erode. It is particularly important for lots located on a slope, as it informs the design of retaining walls and other stabilization measures.
  • Moisture Content and Compaction: Tests like the Proctor compaction test determine the optimum moisture content at which the soil can be compacted to its maximum density. This information is vital for the excavation contractor to properly prepare the building pad, ensuring a stable and unyielding base for the foundation.
• Importance: In many jurisdictions, a geotechnical report is a mandatory requirement for obtaining a building permit. Even where it is not required, commissioning a soil test is a prudent and necessary investment. The cost of the test, typically a few thousand dollars, is insignificant when compared to the potential tens or hundreds of thousands of dollars required to repair a failed foundation or remediate issues caused by unsuitable soil.

Percolation ("Perc") Testing for Septic Systems

For any lot that is not served by a public sewer system, a percolation test is a mandatory and critical pass/fail hurdle.

• Purpose: A "perc" test measures the rate at which the soil absorbs water. This is done to determine if the soil is suitable for a conventional septic drain field, which relies on the soil to naturally treat and disperse wastewater.
• The Pass/Fail Hurdle: The test results must fall within a specific range. If the soil absorbs water too slowly (as is common with heavy clay), the wastewater will surface, creating a health hazard. If it absorbs water too quickly (as with coarse sand or gravel), the wastewater can travel into the groundwater before it is adequately treated. A failed perc test can render a lot unbuildable, as a conventional septic system cannot be permitted. In some cases, a failed test for a conventional system may be overcome by installing a much more complex and expensive engineered septic system, but this is not always an option and depends on local health department regulations.
• Process: The test is typically conducted by a licensed septic designer or engineer. It involves digging a series of holes in the proposed drain field area, pre-soaking them with water, and then measuring the rate at which the water level drops over time. The local health department specifies the exact procedures and standards for the test.

Flood Zone and Drainage Analysis

Water is one of the most destructive forces to a home, and understanding its potential impact on a lot is a key part of due diligence.

• Identifying Flood Risk: The first step is to consult the official Flood Insurance Rate Maps (FIRMs) provided by the Federal Emergency Management Agency (FEMA) through its online Flood Map Service Center. If any portion of the property falls within a designated Special Flood Hazard Area (SFHA), the lender will require the purchase of a separate flood insurance policy, which can be a significant annual expense. Furthermore, building in a flood zone often triggers stricter building code requirements, such as elevating the home's lowest floor above the base flood elevation, which adds considerable cost to construction.
• Topographical Drainage: Even if a lot is not in an official FEMA flood zone, its specific topography dictates how it handles water during a heavy rain event. A comprehensive topographic survey is essential to identify natural drainage patterns, low-lying areas that are prone to pooling water, and to determine if adjacent properties are sloped in a way that will shed their runoff onto the lot in question.
• Mitigation: If drainage issues are identified, a civil engineer can design an effective stormwater management plan. This might include grading the site to create positive drainage away from the home, or installing systems like French drains, swales, or even retention ponds to capture and manage runoff, protecting the foundation and preventing erosion.

Environmental Site Assessment (ESA)

An ESA is an investigation into the lot's past to identify potential contamination from prior land uses. This is particularly important for infill lots or land that was previously used for agriculture or industry.

• Phase I ESA: This is a non-invasive, research-based investigation. A qualified environmental professional will review historical records, aerial photographs, and government databases to determine if the property or any nearby properties were ever used for activities that could have resulted in contamination (e.g., gas stations, dry cleaners, auto repair shops, farms that used pesticides).
• Phase II ESA: If the Phase I assessment identifies recognized environmental conditions, a Phase II ESA may be recommended. This is an invasive investigation that involves taking physical soil, soil vapor, and groundwater samples and testing them in a laboratory for specific contaminants (e.g., petroleum hydrocarbons, solvents, heavy metals). If significant contamination is discovered, the property owner could be held liable for costly cleanup and remediation under environmental laws like CERCLA (Superfund).

These subsurface investigations should not be viewed merely as a process for identifying deal-killing problems. Instead, they are a crucial mechanism for quantifying risk and transforming it into calculable costs. The results from these tests provide the hard data needed to move potential expenses from the abstract "contingency" column of a budget into the concrete "line-item" column. For example, a "bad" soil test showing expansive clay does not necessarily mean the project is a "no-go." It means the project is a "go, but with an engineered foundation." A prudent buyer will use the due diligence period to take the geotechnical report to foundation contractors to get actual bids for the required specialized foundation. This process transforms the vague risk of "bad soil" into a quantifiable number (e.g., "an additional $50,000 for a post-tensioned slab"). This quantification allows for a rational, data-driven financial decision: is the lot still a good value after adding these newly identified and priced costs to the budget?