Owning land has been the American dream since the country began. If you are in the process of deciding this is the way you want to go, then you probably want to know how the process works. Here are the steps to take when you want to become a landowner.
1. Find a Plot of Land
In today’s market, this is a lot easier for you to do on your own with so many tools nowadays at your disposal. You can view land all over the country with online listing services. To help the process run smoothly from start to finish, you can hire a real estate agent who specializes in land purchases.
2. Do your Research & Check Recent Surveys
When you have found a plot of land that you like, you need to do your due diligence. A great first step is to research and find the most recent land survey. A land survey will give you information such as the legal boundaries and easements. Environmental tests can also be important to make sure there is no contamination in the land. Make sure to consider access to things such as potable water, electricity and other utility access. Along with this, you also want to research the zoning restrictions if you want to build a home on the land.
3. Secure Financing
Once you have found a piece of land, now it’s time to make an offer. If you do not have the cash, you will need to secure financing. Finding a lender that will offer a loan for land is a bit more complicated. Most lenders do not want to take the risks and stick to conventional mortgages. If you are planning to build on your land, then it is easier to secure financing. You will still need to pay a down payment from 20% to 50 % of the purchase price. There are several options of financing construction to permanent, lot loan, and owner financing.
4. Make an Offer
Now that you have your financing in place, it is time to make a written offer to the seller. It is in your best interest to make an offer with contingencies that must be met in order for the sale to go through. Be prepared that the seller will probably counteroffer so you will want to have in mind that you might need to negotiate to come to a mutual agreement.
5. Have the Land Inspected
Even though there is not a structure, inspection should still be part of the process. Professionals in the industry will tell you how important it is to have the land inspected before you close. These included running a title search, soil test and checking the zoning regulations plus restrictions. Do not try and take on these tasks yourself, hire a professional.
If you are in the market for land, choose a Realtor who can help you with the process from start to finish. Remember there are specific agents out there that deal with land purchases in your area.