Buying vacant land can be a stressful process. Usually, you have a lot of land to choose from, and even when you find the piece of property you want, it is extremely overwhelming putting in an offer and getting to closing. To make it easier, we’ve created this list of what you need to know when buying land.
Here Is What You Need To Know When Buying Land
1) How Narrow Down The Search
Usually, when you start your search for a piece of land, you have a wide area to search. We’ve had buyer’s considering the entire state before. This makes the search for the perfect property not only difficult but overwhelming. The way to narrow this down is to ask yourself the 4-6 things you want in the area you’re going to purchase the property. Do you want mountains or flat land? Do you want access to water or is the view more important to you? How long do you want it to take to get the grocery store? These are just a few things to consider when buying a piece of vacant land for building a house, placing a camper, benefiting from HOA amenities & tax benefits, etc.
After you have the answer to those questions, you can narrow down your search area. If you want to be 10 minutes away from a grocery store, you don’t want to be considering property on the top of a curvy mountain road. However, if you want seclusion, that may be exactly what you want. From here on out, compare every property you look at to these criteria. If it meets them, add it to your short list; if it doesn’t, move on, as it isn’t worth your time.
2) What Should You Offer
This is a hard question to answer, as it will be different for every single property. The best thing you can do here is find an agent who has experience selling land and work with them. It is important that they know the area you are purchasing in. If they don’t, they won’t be able to guide you on price. Many vacant pieces of land have been on the market for a long time, but if the seller has been coming down on price regularly, you may not be able to undercut them on the offer.
On the flipside of that, we’ve seen land sell for 50% of its asking price because it has been sitting on the market for years. It truly does just depend on the property and what the local land market in that area is doing. This is why getting an agent in the area to represent you is so vitally important.
Check out of all the land available in the Lakeway Area in East Tennessee by clicking here.
3) See What Utility Services You’ll Have
You’ve got to get power and water somehow, so it is important to know how this will happen before you purchase a piece of property. We also encourage buyer’s to get quotes about the cost of hooking up to power, sewer, public water, etc. In some areas, it can cost up to $10,000 do hook up to the sewer. This is a cost best known up front than after purchase when you are building a home.
It also worth mentioning that if you plan to get water from a well, have the potential well water tested as a contingency in your offer. If you have contaminated water, you will not be able to safely use it without a lot of money, testing, and cleaning. It is an expensive process that can be avoided if you get it tested before closing.
4) Does It Have Restrictions
Many people assume that if a property isn’t in a neighborhood, it is unrestricted. This cannot be further from the truth. Because of that, it is important to have a real estate agent pull the most recent deed as well as any past deeds to confirm that a property has no restrictions, and if it does, what they are. Some restrictions may not cause any issues.
Understanding the restrictions on the property you are buying before you even put in an offer is extremely important to make sure the deal goes smoothly without any issues. It’s also worth noting that if you get a good real estate agent like we mentioned earlier, you shouldn’t have to ask for this. They will get it for you and have it ready when you are looking at the property.
5) Are You In A Flood Zone
Luckily, this is super easy to check for. All you have to do is go over to FEMA’s website and type in the address of the property you are buying. It will then pull up the property, and you will be able to see if the property has flooded for as long as FEMA has been keeping track or could find records.
The main problem this can cause, even if the property hasn’t flooded in 20 years, is that you will need flood insurance if you are in a flood zone. This extra insurance could make hard to resell if you build on the property, not to mention the extra cost it will bring to you. If you do, however, find out the property is in a flood zone, call and get an insurance quote as if the structure you want to build is already there. This way, you will know what to expect.
6) What Is It Zoned For
Now, if the property you are buying is a lot in a neighborhood, this won’t be as big of an issue, but let’s say you’re buying a 20-acre farm that has 300ft of road frontage on a major highway. This is a case where zoning can come into play. For example, you may be able to purchase the farm, sub-divide the road frontage off, and sell the new lots as commercial if they are zone appropriately. This zoning could, however, affect your ability to use the property as a farm depending on the area.
Luckily, zoning is an easy thing to check. Just call the local zoning commission/city planning commission in the area the property is located and ask them what the property you are buying is zoned for. Usually, they will be able to tell you very quickly. You could also have the agent you are working with do this as it is part of the job.
7) Have A Plan In Mind
This may seem obvious, but when you purchase a piece of raw, vacant land, you need to have a plan in mind for its end use. This better helps you determine what kind of property you need to be looking at. If you are going to purchase a property with the hopes of building a grocery store, you don’t need to be looking in neighborhoods.
Meanwhile, if your goal is to build a house, looking at property on a very busy public road probably isn’t a good idea either. Make sure that you know exactly what you are going to do with the land you’re going to buy before you even look at it. Otherwise, you’ll probably just be wasting your time.
8) Does It ‘Perc’
What does that even mean? By ‘perc’, we mean what kind of percolation test does the property rate for. A percolation test is a test that sees how much water, and eventually sewage once a septic is installed, a piece of land can absorb. The land will the get a rating for how many bedrooms a potential home could have before having consistent and overwhelming septic issues.
This is extremely important to test, and many lots are sold having already been ‘perc’d’. Just be sure that if you are buying a lot that will need a septic tank, the lot will allow for the kind of house you want to build. You cannot legally sell a house with 5 bedrooms if the lot only percs for a 3 bedroom septic. You must sell it as a 3 bedroom. We’ve seen this happen to many times. Write this in as a contengency or you may pay the price. Get more information on how a percolation test works here.
9) Should You Get A Survey
This is a question we get very often on land. Should we get a survey, or should we just purchase the property without one? The answer is most definitely to always get a survey. The little bit of money you pay to get it done could save you tons of money in potential legal fees from lot discrepancies in the future.
No matter what you are told and even if you are just purchasing a lot in a neighborhood, please get a survey. We have had an issue where beautiful million dollar views could have been blocked by another house simply because no survey was done. Don’t let this happen to you. Spend the money and get a survey. It’s basically a home inspection for purchasing land.
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