Whether you're building a residence, need extra storage, or are purchasing as
an investment or farm property, the time to buy land has never been better.
It's still a buyer's market in many areas, yet many sources claim the housing
market is turning a corner. In fact, due to the election year and historically low interest
rates, many areas are experiencing bidding wars that have not been seen since before the economic recession. Combined
with an aging existing home inventory, this new flurry of activity has prompted
many homebuyers to consider land for their next purchase.
While the decision to buy land may be easy, the process is certainly not.
Here are five tips for buyers interested in purchasing land:
1. Walk the property line. Request a plot
plan of the property and walk the entire border line. Make sure your agent and
the seller are clear with you about where the property begins and ends and where
the site setbacks are. Many first-time land buyers are not familiar with judging
acreage and may not always immediately know what land is included in the
listing. Alleviate any confusion from the beginning by having the seller or
agent walk the property line with you.
2. Research the neighborhood. Get to know
the surrounding neighborhood. What does the property line border? Another lot, a
farm, a subdivision? What is the nearby land being used for? If you're planning
to build a home on the property, be sure to check the surrounding properties for
potential noise or construction. If you plan to purchase farm or horse land,
you'll want to be sure you don't have any ground contamination or runoff issues
from surrounding properties that could impact your future crop or livestock.
3. Check for utilities. Does the property
have any utilities set up? Was there any soil or percolation testing done for
sewer or any cost estimates for installation of utilities? Is the property zoned
for horses, and do you need any permits? In most instances, your real estate
agent will be familiar with these issues and will ask the seller on your behalf.
However, the buyer should be aware of them and any possible costs that may arise
after the sale so he or she can work them into the offer price.
4. Ask about taxes, HOAs and assessments.
Do you know how much the property taxes are? Are there any existing
assessments on the land? Does the lot or land reside in a common interest
community with a homeowners association? All of these factors should be
considered when buying property and should determine your price when making an
offer.
5. Get the right help. Use an experienced
real estate agent and lender. Land sales are different than home sales, and
agents who primarily sell land are more difficult to come by. An experienced
agent will know the right questions to ask and can help narrow your search
significantly. You may also find that your loan options are more limited than if
you were buying an existing home. If you're planning to build, you may want to
consider a lender who specializes in construction loans and can finance the
entire project. Be advised, though, that many lenders shy away from offering
full financing for undeveloped land or unfinished construction. In these cases,
because there is no collateral and greater risk to the lender, you may find you
need a larger down payment or have to settle for a higher interest rate on your
loan.
With the right amount of research, preparation and support, buyers should
have no difficulty finding the property of their dreams at a reasonable
price.
Information provided by Market Leader.
