If you’re in the market to purchase land, then the whole process might seem overwhelming at first. There are so many different questions that you might have. The good news is that you can lean on other real estate professionals during the acquisition phase to guide you through the process. Even the property seller can assist along the way. In the following sections, we’ve outlined some of the most common questions that you’ll want to consider before making that ultimate purchase decision.
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Questions To Ask Yourself Before Buying Land
Before we start discussing the questions to ask other professionals before buying land, we need to make sure that we ask ourselves the right questions to make sure that the property that we are interested in meets our goals and objectives. Here are some questions to help you get started:
What is the purpose for buying this land? – Are you purchasing the land for recreational use, to build a home or cabin on, or for some other purpose? You need to make sure you know what the end goal is with the parcel that you are intending to buy.
What are the home values in the immediate area? – It always pays to know what the value of your neighbors’ homes are because this can provide you a good estimate for the market value of your home if you intend to build on it.
Are people moving in or out of this area? Population growth and trends are important to look at regardless of whether you plan on flipping the property, holding it as a long-term investment, or building on it for your personal residence.
How many vacant lots are adjacent to my property? If you are looking at an infill lot, then it pays to check how many other lots are currently available for sale within that subdivision. If you find that there are too many vacant lots available, then there may be a low demand for property within that subdivision. And if this is the case you would want to find out why.
Who are your neighbors and what types of activities are they engaged in? If you are purchasing a recreational property, then this may not be of great concern, however if you are purchasing a lot to build on, then you will certainly want to whether your neighbors are other homeowners, or businesses. And if they are businesses, you’ll want to know the type of business that they are engaged in? The worst thing you want to do, for example, is to purchase a piece of land to build your dream house on to only find out later that your next-door neighbor runs a chicken farm.
How are the school districts? If you have small children, and you plan on sending them to the public school system, then you will want to find out what the schools are like in the area, and whether they meet your criteria.
Are there any new developments planned? Maybe there is a new shopping center that is coming to the community within the next one year or so. Or maybe there is a 50 unit apartment building that is in the final planning stages. Paying attention to upcoming developments within the community you plan on purchasing land in will help you gauge the desirability of the location.
If my plans change, will I be able to sell this property quickly? Even the best of plans can go awry from time to time. So before you make that final decision, make sure you have done your proper due diligence and are confident that the property could be sold with relative ease if needed.
Questions To Ask The Seller Or Real Estate Agent Before Buying Land
Now let’s discuss some of the questions to ask the seller when purchasing land. Sometimes you will be dealing with the seller directly so in that case you could inquire about the following items from them. In those instances where the seller has an agent handling the listing, then you would need to inquire on the following questions with the real estate agent involved.
Does the property have an HOA or POA? It’s important to know whether your land parcel has a Homeowners Association or Property Owners Association. These associations are responsible for setting certain rules and regulations within that specific community. You want to make sure that your intended use complies with those rules set by the HOA. Many buyers shy away from properties that have an HOA due to the extra layer of rules and requirements associated with them.
Has the property been timbered? Some land buyers purchase property without having stepped foot on the property. This is quite common for land investors who generally do not visit the property prior to purchasing it. Whatever the case, if you are purchasing a parcel of land and have not seen it, then you want to make sure to ask the seller or real estate agent whether or not the property has ever been timbered. Sometimes pictures that are shown within an online listing may appear to have lots of trees, but these could be older images, and the seller may have timbered the property afterwards.
What is the topography of the land? It’s important to try to do your own due diligence on the topography of the property. There are various tools that you can use to help you in doing this research such as Google Earth and a mapping software called Land ID to name a few. However, it never hurts to ask the seller or realtor if they have details on how sloped the property is and other characteristics of the topography. They may be aware of certain characteristics that are not easily visible using standard software such as the ones mentioned above.
Is there access to the property? Although this is something that your title company or real estate attorney will be able to confirm at some point, it’s better to know this upfront so you save yourself a lot of time and unnecessary expense if it turns out that the property does not have access. You want to make sure that the property has direct access from a road of some kind, or an easement access from a neighboring property.
What utilities are available, and what is the water situation? You’ll want to learn as much information as you can about any utilities leading to the property. In addition you want to know whether the property has access to public water or will need well and septic to be installed.
Has a percolation test been done on the property? Often known as a perc test, this is a soil test that is performed when public sewer is not available to ensure that a traditional septic system would be feasible to install on the property.
Questions To Ask The County Before Buying Land
Now let’s discuss some of the things to ask the county when buying land. In some cases you may need to reach out to both the county and the city depending on which planning and zoning department has jurisdiction. Regardless, the questions will be relatively similar in scope.
What is the zoning and land use for the property? It goes without saying that it’s imperative that you find out what the county will allow you to do with the property. This is not an area where you want to make assumptions because what may seem obvious to you may not be the correct assumption. So, it’s best to pick up the phone and speak with the planner in the county to ensure that your intended use aligns with what they will allow for that specific parcel.
Are there any building restrictions? Most jurisdictions will have certain restrictions as it relates to the type of structure that you can build on the parcel and the minimum distance from the road or the rear and sides that are required for building. For example, some jurisdictions will only allow a minimum square feet home to be built on the lot. So you want to make sure that you understand these requirements to avoid problems down the line.
Are you able to subdivide the parcel? If your plans are to use only a portion of your property and sell off another portion of the property, then you’ll want to pay attention to the rules around doing minor splits and subdivisions within the county. Your county planner should be able to tell you right away whether subdividing the parcel is allowed and what paperwork is necessary to get that process started.
Are mobile homes allowed on the property? Mobile homes are extremely popular in more rural areas around the country. And if you intend to build a mobile home on the property now or in the future, you must confirm this type of residential use is allowed for your specific parcel.
Questions To Ask The Title Company Or Attorney When Buying Land
We always recommend using a title company and escrow agent or licensed attorney whenever buying or selling land. This helps minimize any legal issues that may arise from the transaction. Below we have listed some of the questions that you should ask these professionals prior to purchasing land.
What are the closing costs? The typical costs involved in closing a land purchase include title search, title insurance, escrow costs, documentation and legal fees, and more. The cost of closing a land acquisition can vary greatly from one county or region to another, and even between title companies within the same county. To avoid any surprises, make sure to ask your closing agent to provide you an estimate for all related fees and charges.
How old is the most recent survey on record? Often a land parcel can remain in a family for a long period of time. Even when it has been sold to outside parties in the recent past, there may not have been a survey done. Although it’s not a requirement to survey the property prior to purchase, particularly if there is a recent one on record, your bank or lender may require it. And it’s always a good idea to have one done especially if the property boundary lines may be in question.
Does the sale convey any other rights beyond the surface rights? This is not always the easiest question to answer and can require quite a bit of additional time to research. But, if knowing the status of water, timber, and mineral rights is important to you, then you will want to ask your real estate attorney about these rights.
Are there any deed restrictions? Aside from certain restrictions that a homeowners association or county planning department may impose upon the property, there may be restrictions within the deed itself that need to be carefully reviewed. These restrictions are written into the deed by a previous owner and pass to each successive owner in the chain of title.
Who is responsible for maintaining the roads? If the road leading to your property is not maintained by the county or city, then you will need to be aware of who is responsible for those maintenance costs. Typically, private roads are maintained by neighbors who share the road under a formal or informal road maintenance agreement.
What type of deed will I receive upon purchase? Generally, you will want to ensure that you are receiving a fee simple general warranty deed. This type of deed offers the most rights and protection for the buyer and is considered the gold standard in real estate. If you’re receiving any other type of conveyance deed, then you will need to discuss that with your closing agent or attorney.
Questions To Ask Your Builder Before Buying Land
If you are buying your land and plan on building on it, you will also have a contractor or builder as part of your team. They will be integral to ensuring that your expectations are met and help you in resolving any issues. Some land buyers prefer to act as their own general contractor, wherein they would hire subcontractors directly for their home project. Others prefer to use a general contractor or homebuilder to handle the whole project and take a more hands-off approach. Regardless of which avenue that you choose, here are some common questions to ask your contractor or builder when buying land for a house:
Will the land need to be leveled and if so to what extent? It would be great if you could build on your parcel without any major preparation costs such as clearing and leveling. However, that is not usually the case. So you want to talk to your contractor or builder and understand how easy or difficult it will be to level the land if needed, and the associated costs.
Are there any special building requirements due to flooding? Some properties are located within a FEMA designated flood zone area. While you may be able to build your home within a designated flood zone, there are typically some special requirements set at the county level, if this is the case. The requirements vary from county to county, but your builder should be informed about this and be able to advise you accordingly.
Is the land stable for building on? Sometimes a property may be located within a wetlands area or an environmental hazard area such as in a sinkhole. This is particularly true for parcels that are located near coastal areas, such as the state of Florida. For your own safety and peace of mind, you want to ensure that the land below your structure is stable enough to build on. This goes without saying however, it is often something that is overlooked and taken for granted.
Will you need to build a road to the property? Often times a property may have legal access but not physical access. That is to say that you would need to build your own road to get to your property. There are different types of roads that can be constructed based on your specific needs and budgets. You can choose between a dirt road, gravel road, or paved road. Make sure to discuss this with your construction team, because the costs involved, particularly for a paved road can be quite high.
What is the total estimated construction cost? No doubt this is something that you and your contractor or builder will discuss at some point. But it’s best to get an estimate as early as possible to ensure that the total construction cost of your project fall within your allocated budget. Having said that, most construction projects run above their anticipated budget due to some unforeseen variables. So to stay on the safe side, expect your budget to be at least 10% greater than what you have been quoted.
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Conclusion
Purchasing the ideal land for your circumstances, starts with asking the right questions. If you are buying land for hunting or recreational use, then you will be asking very different questions than someone who is buying a lot within the subdivision to build a home. The point is, that although we have tried to list some of the most common questions related to land acquisitions, your own queries will vary based on your intended use.
Vic Patel is a full time land investor and co-founder of Land Dealmaker. He specializes in flipping rural vacant land across the country and teaches others how to start, grow, and scale their land investing business. Make sure to sign up to the Land Dealmaker Email Newsletter where he shares his exclusive land investing tips, strategies, and insights.
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