What Are Common Mistakes to Avoid When Buying Land?
Here are ten critical mistakes to avoid when buying land:
1. Land locked property:
When evaluating land for purchase, one of the most critical factors to consider is road access. Ensuring you can get to the property is essential and not ensuring you can access the land is a crucial mistake to avoid when buying land.
Here’s a detailed look at what to consider regarding road access:
Can You Access It?
Is it surrounded by forest service or BLM land with no ability to drive there? Or is the access only seasonal?Even if there is a road, is there legal access? Do you need to trespass to get there? You want to ensure you have a legal right-of-way to reach the property. Lack of legal access can make the land less functional and significantly reduce its value.
Are The Access Roads Public or Private?
When you are buying land, determine whether access to the property is via a public road or through private land. If the access is through private land, you may need to secure an easement. An easement provides you the right to cross another person's land to reach your property. Without such an easement, you might find yourself legally barred from accessing your own land, which is a critical mistake to avoid.
How Much Road Frontage Is There?
Road frontage refers to the length of the property that borders the road and is an important factor in both access and value in buying land. Properties with significant road frontage usually offer better access and more flexibility in terms of development, and they tend to be more valuable.
Assessing the road frontage helps ensure that the property has not just access but also convenience and enhances its usability for parking and optionality for building.
2. Not Inspecting The Land Prior
Physically inspecting the land you want to purchase is an indispensable step and a critical aspect of avoiding common mistakes when you are buying land. Walking the property allows you to observe firsthand various factors that could significantly impact its usability and value before buying land. Many sellers will let you reserve the property before your trip so it doesn't get purchased while you are there.
When you walk the land, pay close attention to the terrain. Irregular features such as steep slopes, rocky patches, or uneven surfaces can complicate construction projects and inflate development costs. Identifying these challenges early can help you make a more informed decision about the property's suitability for your needs and budget.
It's also crucial to verify the property boundaries. Discrepancies in boundary lines can lead to disputes with neighbors and might result in legal issues or require adjustments in property valuation. Often, a recent survey provided by the seller or one that you commission can help clarify these boundaries.
Walking the property lines with a copy of the survey in hand (if you have one available) ensures that the physical boundaries match the documented ones. This is also one of the important things to consider when buying land.
3. It’s In a Flood Zone
This is also one of the questions you might ask: What should I know when buying land? When considering to buy land, it's crucial to determine if the property is located in a flood zone, as this can significantly impact insurance costs and building regulations.
Utilizing FEMA's Flood Map Service Center is an essential step in this process. By entering the property's address or geographical coordinates on FEMA's website, you can access detailed flood maps that indicate whether the land falls within a flood-prone area.
Understanding the implications of being in a flood zone is essential, not only because it affects flood insurance premiums—often resulting in higher costs—but also because it can dictate stricter building requirements. For instance, local building codes may require that structures be elevated or constructed with flood-resistant materials.
4. You Can't Dig
Conducting a soil percolation test is a fundamental step to take when buying land, especially if you plan to install a septic system. This test assesses whether the soil has adequate absorption properties to support a septic system effectively.
A satisfactory percolation rate indicates that the soil can absorb water at a rate conducive to a septic system's proper function, making installation both feasible and cost-effective. If the percolation test reveals poor absorption, it could lead to significant additional expenses for developing alternative sewage disposal solutions or enhancing the soil's percolation capabilities.
It is advisable to have this test performed early in the land evaluation process to ensure that your plans for the property are viable and to avoid unexpected challenges that could impact your use and enjoyment of the land.
Soil type can impact what you can grow or build. Some soils may require extensive and costly treatment or preparation. Soil surveys can be obtained from the Natural Resources Conservation Service (NRCS), part of the U.S. Department of Agriculture, which provides detailed soil valuable information for land use planning.
Topography: The land's slope and drainage can significantly affect construction costs and design possibilities. Topographical maps and land surveys can help assess these features and are often available through local government offices or can be commissioned through private survey companies.
Understanding the physical characteristics of the land is crucial before buying land.
5. No Ability to Get Water to Area
Investigating water accessibility is a crucial aspect of purchasing land, as it directly affects the feasibility and cost of developing the property. Understanding how water is accessed in the area is essential, with common options including connection to municipal water systems, drilling a well, or setting up a cistern system for water delivery. Each method has its own set of implications:
Municipal Water Connection
If available, this is often the most straightforward option, offering reliable water access. However, the costs can vary depending on the distance from the main water line to your property and the local municipality's fees for connection and usage.
Drilling a Well
In areas without municipal water services, drilling a well can be a viable option. The feasibility and cost of well drilling depend on the depth at which water is found, which can vary greatly by location. Consulting with local well-drilling companies can provide estimates and insight into the water table depths in your area.
Cistern Systems or Rain Cachement?
For properties where neither municipal water nor wells are viable options, cistern systems can be used to store rainwater or water hauled in from external sources. While cisterns offer independence from local water sources, they require careful planning regarding volume needs and involve setup costs for the storage system.
6. Hazardous Waste Contamination
When buying land, it is crucial to check for any environmental pollution issues or ecological restrictions that might affect how you can use the property. This includes determining if the land is near a Superfund site, which is a location designated by the Environmental Protection Agency (EPA) due to contamination by hazardous waste and requiring a long-term response to clean up.
Environmental contamination can pose serious health risks and affect land value, potentially leading to costly remediation obligations. Sometimes gas stations will dump hazardous waste on vacant land.
Consulting with local environmental agencies or hiring environmental consultants to conduct a thorough assessment can help you understand any environmental risks or limitations associated with the property.
7. No Ownership Verification of Seller
The most important step in purchasing land is verifying the ownership of the seller. Do not assume that the seller has the legal right to sell the property. Conduct a thorough title search to confirm that the seller is the rightful owner and that there are no disputes over the title.
How to Verify Ownership?
Start with a Title Search
A title search involves examining public records to verify the legal ownership of the property and to ensure that there are no liens or other encumbrances on the title. This step is vital because it helps to prevent legal complications that could arise from buying a land from someone who does not legally own it.
Check the County Assessor's Property Records
For an accurate check, you can start by visiting the county assessor's website. Here, you can often search by parcel number or owner name. If it changed owners recently, it may take weeks to update.
You can contact the County Assessor's office by phone or email to request information on the property based on its parcel number or legal description.
Obtain and Verify the Seller’s Deed
After identifying the property owner via the county records, directly contact the seller and request a copy of their recorded deed. This document is essential as it proves the seller's ownership of the property.
Carefully review the deed to ensure that it matches the details found in the county’s records.
8. Not Checking for Liens and Back Taxes
Before you finalize buying land, it is crucial to check for any outstanding taxes or liens on the property. These financial encumbrances can transfer to the new owner after the sale, leading to unexpected debts and potential legal issues. Always buy on a Warranty Deed to ensure it's clear of liens or back taxes.
Here’s how to conduct a thorough check to ensure you’re not caught off guard by these financial liabilities.
How do you Check for Back Taxes and Liens?
Start with the Basics
Access the National Association of Counties (NACo) website to locate your county. Here, you can find the contact details for the county treasurer’s office, which is a good starting point for your inquiries.
Obtain the Assessor’s Parcel Number (APN)
For many counties, tax information is tied to the Assessor’s Parcel Number (APN), which is unique to each property and essential for retrieving tax records. If you don’t have the APN, contact the seller to provide it or reach out to the County Assessor.
You can simply provide the legal description of the land to the assessor, and they will supply you with the APN.
Clarify Responsibility for Outstanding Taxes
If back taxes are owed, discuss them with the seller responsible for clearing them. It is common practice for the seller to clear any such debts before the sale is completed.
Still, if the responsibility falls on you, the buyer, you will need to factor this into your negotiations and overall budget.
Understand All Of The Purchasing Costs
You also want to make sure you are crystal clear on the total closing and financing costs for the land you are purchasing. You may be able to send a lot of money by working directly with the owner and doing an owner-financing deal, which also allows you to avoid credit checks and sometimes doesn’t even have interest expenses. Realtors, on the other hand will have a lot of unexpected fees.
9. Too Far From Local Amenities
Understand the proximity and accessibility to essential amenities like gas stations, grocery stores, hospitals, and schools. This is especially important in more remote areas where such facilities may be several miles away.
10. Build Plan Doesn't Work for Zoning Restrictions
Understanding the zoning restrictions and future planning of the area is vital. Contacting local planning and zoning departments will provide you with information on what the land can be used for and any restrictions that apply.
This step is crucial to avoid buying land you cannot use for your intended purpose, such as finding out you cannot build a commercial property on a residentially zoned piece of land.
Final Considerations: Important Things to Know When Buying Land
When venturing into the purchase of land, there are several key factors to consider to avoid common pitfalls and ensure that the land suits your needs. Each aspect requires careful evaluation to make a sound investment:
Location, Location, Location
The location of the land impacts not only the current price but also the future value:
Economic Factors: Investigate local economic conditions, including employment rates, major development projects, and economic growth forecasts. Local government or economic development websites often provide this information.
Future Area Development Plans: Understanding future development plans for the area is crucial. These plans can be found on local government planning websites. This information will help you assess potential increases in land value and suitability for your intended uses.
Proximity to Amenities: Proximity to amenities like schools, hospitals, shopping centers, and public transportation can also impact land value. Local real estate websites and municipal planning offices can provide insights into these factors.
Access to Utilities: It is vital to know whether the land has access to essential utilities like water, electricity, gas, and internet. Check with local utility companies or municipal planning offices to understand the availability and cost of connecting these services if they still need to be present.
Know The Costs & Financing
Securing financing for land purchases is different from obtaining a mortgage for a home:
Land Loans: Before buying land you have to also consider this, loans typically have higher interest rates and require a larger down payment. It’s essential to shop around and compare terms from different lenders. You can start with your bank or credit union and also explore options from specialized lenders who focus on land loans.
Other Financial Considerations: Understanding the full financial implications, including property taxes and potential land development costs, is essential. Local tax assessors' offices can provide property tax rates and assessments.
By taking these steps, you ensure that the land purchase is suitable for your immediate needs and a sound investment for the future.
What to Know Before Buying Land
Before making any commitments in the land-buying process, it is essential to equip yourself with comprehensive knowledge to make an informed decision.
Here are some detailed considerations:
Understand the Market Conditions
Knowing whether the market conditions are favorable is crucial when buying land—research recent sales of similar properties in the area to get a sense of fair pricing. This is especially important if you are looking into how to buying land for cheap or determining the best time to buy land to build a house.
Utilize resources like local real estate listings, county property appraiser websites, and real estate market analysis reports to compare land prices and understand trends.
You might also consider consulting with oa real estate agent who specializes in land purchases in the area to provide expert insights and advice. This can be particularly beneficial if you're exploring options to buying land without an agent or buy land without a realtor, as professional guidance can help you navigate the complexities of land transactions, such as how to buy land in Colorado or finding land for sale in Colorado by owner.
Additionally, if you're considering whether to buy land or a house, understanding the current market conditions can provide clarity and help you make an informed decision that aligns with your investment goals.
Environmental Restrictions and Conditions
Be aware of any environmental protections or conditions that could affect how you use the land. This includes understanding flood zones, which can be checked through FEMA's Flood Map Service Center, and environmental contamination, which may necessitate a review of EPA records or a professional ecological audit.
This is particularly crucial if you're considering how to buy land and build a house, as environmental issues can complicate construction plans.
Additionally, protected wildlife areas may impose restrictions on land use, and information on these can typically be found through state wildlife conservation agencies. Ensuring compliance with environmental regulations is crucial to avoid legal issues and potential fines.
This step is essential in buying land for homesteading or if you plan to buy land and mobile home setups. It’s also essential if you are looking to explore the property for sale in Colorado Springs, where environmental factors might significantly influence how you can use your land.
By ensuring you are informed about these environmental aspects, you can better plan whether to buy land and build tiny house, buying land and live in an RV, or pursue any other specific land use plans.
Understanding these factors will help you navigate potential challenges and ensure that your land purchase is compliant with all necessary regulations, aligning with your reasons for why to buy land as an investment or for personal use.
Long-term Considerations
Consider the long-term implications of your land purchase, including tax obligations, resale value, and the potential for development. Property taxes can vary significantly by location and the intended use of the land, so consulting with the local tax assessor’s office can provide you with an estimate of annual tax responsibilities.
Understanding the area’s growth trends is crucial to determining resale value; areas poised for growth may increase in value, making it a strategic time to buying land now or to buy land for cheap in emerging markets.
Furthermore, consult local planning departments or city development plans to understand the zoning laws and future development plans, which can impact your ability to build a house or alter the property.
These insights are especially important if you're considering how to buying land and build a house or if you want to know when to buying land to build a house. Additionally, for those exploring how to buy land with no money down, understanding zoning and growth potential can influence financing options like owner financing, which could make it feasible to buy land without downpayment.
By being diligent and informed about these aspects, you can sidestep the common pitfalls of buying land and ensure a more secure and beneficial investment. Remember, purchasing land is a significant decision that necessitates careful planning and consideration of both immediate needs and future goals.
This strategic approach answers why buying land as an investment and underscores the importance of knowing what to know before buying land. Whether you're looking to buy land near a lake, buy land and live in an RV, or even buy land in Colorado, each scenario requires tailored considerations to ensure that your land purchase aligns with your personal or investment goals.
