Buying land is a fantastic idea if you are looking for the opportunity to build your dream home. There are so many amazing properties to consider and it doesn’t take much to be able to secure the land you want. If you’re thinking about buying land in Texas, California or anywhere in the country, take a look at some of these tips to ensure you get the perfect property for you and your family's needs.
There are a few things you will need to consider and it’s important to know as much as you can about the property and surrounding areas before you make a quick decision. It’s a great idea to surround yourself with a team of local experts and people that are familiar with land purchasing. While it’s similar to purchasing a home, there are a few key differences that might require the help of an expert in the field so look for a local agent to help you find the best piece of property that is within your budget.
1. Get Your Finances In Order
Most people will need to have a good look at their financing options before they start to look at what properties are available in their price range. If you are paying in cash or you have already secured your finances then you can skip to the next step. If you are unsure about where you sit financially then now is the best time to talk to a broker at your bank.
A broker will be able to point you in the right direction when it comes to lenders. If you are choosing to purchase a large piece of land that’s over 10 acres with no improvements made then look for a lender that is a member of the farm credit system. These lenders specialize in farmland purchases and they will be able to give you the best rate.
For smaller purchases, your local bank’s lenders or a local (local to the property you’re considering) credit union might be the best choice for you. They can offer you the best advice based on your previous credit and lending history with the bank. A bank that is close to your property will likely have some experience in lending for similar-sized pieces of land and they might even be able to recommend a good appraiser or surveyor to help you out.
2. Pick your land
Once you have everything in order with your money you will be able to see what your overall budget looks like and you can finally start to look for the best land for your needs. There are plenty of different ways you can go about buying the property but if you don’t have much experience in buying land then the best way would be to use a buyer’s agent.
Your buyer’s agent is legally bound to try and find the best property that is within your budget. You want to find yourself a local buyer's agent that is familiar with the area and experienced in selling properties. A local agent will also know the market very well and they will be able to help you find a fairly priced property in great condition instead of an overpriced jungle.
3. Check off all the boxes before you make an offer
When purchasing land it is important to do research on the state laws and regulations. Purchasing land in Texas, for example, is slightly different than in other states and there are a few things you need to consider before you make an offer. Your purchase will likely require a TREC (Texas Real Estate Commission) contract and there are a few points about the contract that you need to be aware of.
In Texas, you have mineral rights to any minerals that are located under the ground of your property, and by default, these rights will be turned over to you when you purchase. Some sellers may specify otherwise in the contract and in Texas, the buyer may be able to retain the mineral rights separately from the surface estate meaning they can sell you the property and land but still be able to access it through your home. If the seller is aware of any minerals on your property, you should consider looking for an agent that has experience with mineral rights.
Depending on the way the sale is going, you might need to consider an option period if you are wary of the purchase. An option period allows you to put up some of the money for the sale and back out while only losing the “option money” that you fronted in the first place. If you are really considering the purchase and you just want some time to do some inspections, choose a short option period or front a higher amount of money so the buyer knows you’re serious.
4. Check it out in person
If you are in the option period, you should take this time to survey and inspect that land to make sure there are no major issues. Choosing people to check out that land that has experience with land purchases is the best way to go. Home purchases require an inspection from a licensed home inspector but land purchases are a little different. There are no registered land inspectors and you will have to rely on hiring someone based on your needs to check out the land for you.
A property surveyor is your best bet if you want to make sure everything about your property is up to date and ready for usage. They will likely research the plot of land and figure out the exact boundaries you have rights to. This is a great idea for plots of land that have been on the market for a long time or plots that might need major construction for driveways or sanitation.
Some banks will require you to get your property surveyed for many different reasons. If you choose not to, you might end up building half of your dream home on your neighbor’s property without knowing it. You need to make sure your land boundaries are correct to avoid any legal issues in the future.
5. Walk around the neighborhood.
This is optional but it’s a great way for you to figure out a few things you might not learn from your agent, your seller, or even your bank. If you are choosing to buy a property to build your own home then check out what the neighbors in the area are like. You don’t have to go knocking on doors but try visiting some local shops and businesses and making friends with the locals.
Anyone who has lived in the area for a long time will be able to tell you about things like the amount of rainfall or flooding potential, what the neighborhood is like and what the history of the area is. You can gain so much valuable knowledge from the residents in the area so go the extra mile and reach out if you want to know everything you can about your potential property purchase.
6. Make it final
Closing costs and closing dates will likely be finalized after you’ve done your inspection and decided that the property is the right fit for you. The closing costs will also include the cost of the title policy that you will need to transfer the property’s title over. The costs can vary but it is usually between 3%-5% of the property’s costs and it can be negotiated between the seller and the buyer.
The closing date will likely happen after everything has been decided, signed and the title has been handed over. There is never a guarantee when the closing date will occur and if there are any major issues with the sale, the closing date will likely be pushed back until things have been ironed out. They can generally range from 30-60 days from the date of the contract but it can vary quite a bit.
The number of steps you’ll need to take to complete the sale might be different, depending on the type of sale, the financing, and the relationship with the seller. Property purchases are a little trickier simply because there are so many different ways to put a value on a property while it’s fairly easy to figure out the value of a home.
7. Consider every aspect before you start your search
One of the best ways to ensure that you are getting the best deal and the best piece of property is by using people that have experience with the area and experience with land purchases. A land purchase sale is much different than a home sale and buying land in Texas is different than purchasing in Massachusetts.
There are also some things to consider when it comes to buying land over buying a home. The financing options will be different and you might even get credit for being a first-time property buyer. You will also need to consider what you are using the land for and make sure you properly declare the use to your finances so they can provide you with the proper documentation.
Another thing to consider is the condition of your land when you buy it and what will need to be done to get it into a livable shape. Before you buy it, make sure you have factored in all the costs you will eventually need to fix it up. Adding things like an electrical connection, a sewage line, gas lines and driveways are something that should be factored into your overall budget.
If you are thinking about buying land, just make sure you do as much research as possible into your land choice and your financing options. Knowledge is power and knowing as much as you can before your potential purchase might save you some headaches in the future.
Robert J Fischer Team team is comprised of specialists, who all focus on what they do best and work together to make the home selling and buying processes as smooth as possible. Each member of our team fights every day to help our clients meet their real estate goals and do what is best for their families. Whether you’re looking to sell a house, an office building, or hundreds of acres, we would love the opportunity to talk with you about putting our best-in-class marketing solutions and services to work for you.
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