Tuesday, October 21, 2008
Land buying Information and Tips
As owner of Land Incorporated as well as a Realtor and a Registered Forester I have some qualifications to write about buying and selling rural real estate primarily land. I have sold thousands of acres as a Realtor and managed hundreds of thousands as a Forester since 1973.
If you are considering buying rural land this article may help you with some good tips and information. The points below will give you some basic information and insight into what you need to look for as well as look out for in a land purchase.
- Kind of Land. Do you want a farm, timberland, development potential, home site, hunting, agricultural use? One tract of land can rarely be all of these. Think what you plan and seek from there. Of course most tracts will have multiple uses but sometimes there are local use restrictions to consider.
- Access. Hopefully you will have highway frontage for access. Some tracts may have only an easement. If so, look at the deeded easement layout and the width of it. A 20′ wide easement to a property that you later want to develop is a major negative if the county requires for instance a 50′ wide access easement for a street.
- Utilities. Water of course is critical but for drinking and livestock. Is there an accessible waterline? If not what are the costs of a drilled well in the area and is there water quality problems in the ground water? Will there be water in a drought? Is there a creek for livestock and does it flow year around? Does anyone have the water rights? Is electric power available? Internet, cable, cell phone or land phone? Easy to check now, hard or impossible to get later.
- Income from the property. As a forester I know the value of timber. When looking at rural land look closely at the timber and if there is a considerable amount have a local consulting forester appraise it for you. I have seen timber be worth as much as 3/4 of the value of an asking property price even in recent years. Make sure your purchase contract states that existing timber goes with the sale. It may have already been sold! Look at other income potential like hunting leases which can easily pay the property taxes and minor management costs. There are also agricultural leases. Always make sure the tract deed includes all mineral rights.
- Making an Offer. Research what local sales have been on similar and nearby land. If you are not using a buyer representation Realtor you might want to consider one. Usually their fee is paid from the seller’s funds but not always so verify this. Check to see if land values are going up on down in the area. Allow yourself an inspection time and right to go on to the property by yourself or others you may hire to make inspections. Give yourself a way out of the contract if inspections fail. Make sure timber and minerals are included. Don’t make a low ball trying to steal it offer, you will just make the seller mad. Make a fair workable offer and go from there.
- Closing. Use a real estate attorney to check title and close. They will know what to look for in deeds, easements and liens on the property. Ask the seller any questions you may have come up with and if they have any reports, old plats and maps that you can have. Ask about the history of the land before its lost as you may never see the seller again if they are moving away.
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