Finding your dream home is not an easy task. Buying land is even more complicated when you need land to build your home or commercial properties. Instead of buying a home, building one on vacant land can be a good idea. However, before creating the foundation, you must do your due diligence and know your land well.
Without proper assessment, what you go through will help you achieve your dream could be a nightmare and a headache. So, whether you are purchasing the land to build a home or thinking of reselling it, there are essential things you should and shouldn’t do. The following are the dos and don’ts of purchasing vacant land.
The Dos of Buying Vacant Land
You must do the following to make the purchasing process seamless and get quality land for building.
Work with an Agent
Buying land is not a simple process, considering all the aspects involved. Therefore, it is a good idea to work with a land real estate company Montgomery County IA to help maneuver the details like doing due diligence, negotiating, and closing the deal. The agent you hire needs to have extensive experience and knowledge of negotiating land deals. Many sellers and estate agents make the mistake of advertising land that is likely to be divided. In such a case, a buyer ends up with a piece of land that may yield less profits than expected. Therefore, ensure the agent you hire has a good track record in carrying out successful transactions.
Keep Your Finances in Order
Another vital thing you must do is to ensure your finances are in order. Know how much money you can afford to spend on buying land before visiting properties. You should remember that land purchases are always made in cash because lenders are unwilling to fund undeveloped land. Therefore, you need to get enough money you can afford to use to buy land. With proof of funds, it is easy for sellers to consider you since they are confident you can buy the land. It will also be a good idea to take out money tied to other investments if you plan to use it on the purchase.
Consider Utilities
When buying land, make sure you check the available utilities. It is easy for people to ignore the importance of having amenities close by. The problem with buying vacant land is that you may not know the available utilities unless you check with the neighborhood. Knowing if it will be costly to run infrastructure and utilities on your land before buying is essential.
Check the Value of Neighboring Homes
The best thing about building your home is that you can customize it to your liking. However, it is crucial to consider other houses in the neighborhood and build something similar. Remember that the places in the area impact the resale value of your home. Therefore, it is crucial to pay close attention.
Consider Inducements
In case of natural disasters, the government often offers incentives like seamless approval to build or tax breaks to allow homeowners to get back on their feet. Disasters like wildfires and hurricanes always do a lot of damage, including removing structures. Therefore, it is advisable to take advantage of such incentives. Speak with your estate company, like LandProz Real Estate LLC, to know the available incentives in the land.
The Don’ts When Buying Vacant Land
As you do the above things, knowing the ones to avoid to prevent incurring issues is critical. Here are things to look out for.
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Don’t Fail to Test the Environment
An important thing you should never do when purchasing vacant land is skipping land tests. Similar to inspecting a house before buying, it is also critical to test the plot of land to know what you are buying and if the land suits your needs.
The soil must be tested to ensure it is not contaminated from previous use and can withstand the way you intend to use it. It is also crucial to check the land’s flooding potential and soil condition to ensure it is safe to build on. The results of the tests must be interpreted by a professional because even the most experienced agents don’t know to explain such technicalities.
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Don’t Forget to Survey
Never forget to survey the land before buying. You need to analyze it to know the boundaries. If the land has been vacant for a long time, there is a high chance the neighbors may have encroached beyond their borders.
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Don’t Speak to Neighbors
Talking to the neighbors when buying an already-built house is an excellent idea to know about the area. However, discussing what you plan to do with the vacant land could bring issues and opposition. Therefore, it is best to hold off on talking to the neighbors about your plans until you build your home and move in.
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Don’t Depend on Getting a Loan
You cannot use the same method of financing a land purchase as you do with a home. As mentioned, land transactions are done in cash since lenders are reluctant to invest in underdeveloped land. Therefore don’t depend on a loan to buy land. However, you may be approved for a construction loan since the house you are building will act as collateral. Therefore, ensure you have enough money to buy the land.
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Don’t Assume Building Codes and Zones
Every local government has codes and zones that dictate the type of property that can be built on the land and specific steps that must be followed to build strong structures. Never forget to check zoning since regulations might limit your options. You need to know what is allowed and not allowed in the area. Look for land that does not restrict you from building what you want.
Key Takeaways
Buying vacant land can be an excellent idea to build a customized home that meets your need. It can also be an excellent investment if you use it commercially or resell it. However, before you give your money, it is advisable to conduct thorough research and know everything you should and shouldn’t do to be safe and ensure you buy land that will meet your needs. With the above information, you can purchase vacant land and make it work.
