Land is a great investment. It is inexpensive to own, it does not require a lot of upkeep, it can’t be stolen or destroyed, it can be sold for a profit, and it can be used in a variety of applications.
However, it’s important to purchase the right land and make smart decisions in doing so.
If you are thinking of buying land, here are some things to consider before taking the leap.
Think About the Location
Just like any type of property, location is key. You can work with the land in any way you see fit, but you won’t be able to move it out of its neighborhood.
There are several things to think about in terms of location. It’s a good idea to find land in a low crime neighborhood with local businesses nearby. If you are planning to build a business on the land, you may also want to think about where your competitors are located and nearby resources that will make handling your affairs more convenient.
Land may be relatively inexpensive, but it will still require a sizable down payment. Plan ahead by saving in advance. Cleaning up your credit will help you secure a lower interest loan so it’s best to review your credit report to eliminate any errors and minimize debt.
It’s advisable to work with a lender who specializes in property planning. He or she will help you work out a plan that’s right for you. They will also give you a good idea of what size of land you will be able to afford.
Additionally, a lender will get you pre-approved so sellers will know you’re serious when you make an offer.
Work with a Realtor
Some people may attempt to buy property without the help of a realtor thinking they will save on costs. However, a realtor can offer expertise that can save you time and money in the long run.
A realtor has leads on the best properties available. They will offer their expertise to ensure everything is done by the book. They will negotiate deals to get the best price possible. They will offer an unbiased opinion that prevents you from working on your emotions.
And if you’re considering land in multiple states, it can be beneficial to get an agent who is licensed in more than one. With real estate license reciprocity, agents can get their license in multiple places without a lot of extra legwork.
Know What Comes with the Land
There are several details to be aware of during the purchasing process that can greatly affect your buying decision. These include the following:
- Restrictions for Zoning: Zoning regulations will apply to the land you buy. There may be restrictions on the businesses and buildings allowed on the property as well as the size and height of the buildings and the location of utility lines. It’s important to be aware of these if you are planning to build.
- Permits: You’ll also want to consider what permits come with the land. You may need permits for:
- Sewer: if you are planning to build on the land, you’ll need to know if there’s enough sewer capacity to make a connection. If the property is far from the nearest sewer line, you may be better off going with a private septic system.
- Utilities: A permit will be necessary if you need access to an electrical grid or a public water hookup.
- Road Access: If there is limited road access, you may want to pave a road on the land. This may or may not be allowed. You will also need to consider if the land needs to be cleared of trees, if it’s a conservation area or an endangered animal area. If that is the case, you may not be able to pave or build on it.
Steps to Take in Sealing the Deal
Finding the land that’s right for you is a big step, but once you find your match, there’s still a long road ahead of you. Here are some of the tasks you’ll be facing.
Make a Written Offer
It’s advisable to create a written bid for the land. It will work as a contract in the case anything unexpected comes up.
The offer will include the price of the land, it’s location and contingencies. Contingencies refer to anything unsatisfactory that may turn up that may cause you to back out of the deal. Here are some examples of possible contingencies:
- That the land can pass an environmental test
- That the land can get a septic system permit
- That there is an up-to-date survey that shows boundaries, parcel size and easements or encroachments
- That the zoning regulations are suitable for the buyer.
Once the offer is accepted, both parties may sign a Sales and Purchase Agreement.
Deliver the Earnest Money
Earnest money is basically a deposit on the sale. It goes into escrow to show you’re a serious buyer. If contingencies come up, you may be able to walk away with your earnest money but if you pull out for another reason, you may not get your money back.
Get Environmental Tests Done
Environmental tests will tell you whether the soil is contaminated and whether there’s sinkhole damage or sinkhole potential. It will also let you know if the ground is stable enough to build on.
Consider Getting a Land Survey
A land survey will tell you where the boundaries of the land are. This will help you know exactly how many acres of land you are buying and how much of that land is usable.
Check the Title
A title search costs $75 to $100 but it’s worth the investment. It will let you know if there are liens on the land and whether there are any special assessments, easements or restrictions on the property.
Do a Final Walkthrough
Doing a walkthrough on a plot of land is nothing like doing a walkthrough on a house, but the intention is similar.
During the walkthrough, you will become familiar with the shape of the land, and you will be able to confirm any findings of a land survey or title check.
Once you have completed these steps, you are ready to make a payment.
Land is a terrific investment but it’s important to do some research before you make a decision to buy. The tips in this article will get you headed in the right direction, so you are prepared for the road ahead. Good luck finding the property that’s right for you.