By Iain McLean
If you are the adventurous type who wants to buy a piece of wilderness or maybe even looking to speculate with some property development in an urban area you should know the basics of how to buy land, for it's a whole different set of rules from buying a house.
There are many things that you need to take into consideration, for example rights of access, availability of utilities such as water and power, easements and land use restrictions. Remember, that when you buy a house, all of these matters have, you assume and hope, already been taken care of.
Step 1: Plan Ahead
You need to be sure you know what you want and that your future dream property wont suddenly end up next to a freeway or high security prison. The experts who make it their business knowing how to buy land, will tell you that the most important stage is the initial planning one. You should spend a fair bit of time at your local planning and zoning department looking at long term land use plans for your county, checking zoning arrangements and planned school developments, parks, even garbage dumps or malls. If in doubt ask one of the planning officials for some help - you really can't afford to make assumptions or take chances at this stage.
Step 2: Check the Zoning
The next step on your 'how to buy land' checklist is to actually check that your development will be allowed. You don't want to end up with an expensive piece of dirt on which you cant build your dream home.You need to check if the land you want to buy is in an existing sub-division, and if it is check the restrictions. For example there may be utility easements meaning that you cant build on them.
Step 3: Check The Restrictions
Restrictions can place a lot of control over the use of your intended property. These can range from the kinds of pets you can have to whether you can park a boat in the driveway. Beware of additional fees from organisations such as gated communities for example where you will be liable for road maintenance since you actually own the road (along with your neighbours of course). Find out if there is a homeowners association, membership may be mandatory, and if they charge any fees. Of course, if you think this is all sounds like a lot of bother then you should begin to worry even more - no restrictions mean anything is possible - think of your swimming pool next to that new sewage plant!
Step 4: Figure out the financing
Ah, financing. Even those who know how to buy land successfully have trouble with this. Unlike the fiercely competitive home mortgage market, financing land deals is often done on a local level. Most land financing actually comes from the seller themselves. A typical deal might require a 20-percent down payment, with the seller holding a note for the balance. Obviously, depending on the seller, interest rates and payment terms can vary wildly - check the deal before yo commit to it. If your land isn't expensive you may be able to take out a loan against your existing property, or simply approach a local bank who know the area for funding. In any case its vital to ensure that the correct financing is in place not only to buy your land but to develop it to your needs.
So, there you are, some tips on how to buy land. If you are looking to buy land then you should consider land auctions. These can be a very cost effective way of getting the right piece of land in the right location.
