Complete Guide to Buying Land: The Safe and Easy Way

Introduction

Buying land can be both exciting and challenging. Unlike purchasing a home, land acquisition involves unique considerations that require careful attention. This guide aims to provide you with a comprehensive roadmap to make your land buying experience safe, straightforward, and successful.

Whether you’re looking to build your dream home, start a farm, invest, or simply own a piece of nature, this guide will help you navigate the complexities of land purchases and avoid costly mistakes.

Setting Your Goals and Budget

Clarify Your Purpose

Before beginning your search, clearly define why you want to buy land:

  • Are you planning to build a home immediately or in the future?
  • Is this an investment property?
  • Do you want to use it for agriculture, recreation, conservation, or commercial development?
  • How long do you plan to hold onto the property?

Your purpose will dictate the type of land you need, where it should be located, and what features are essential.

Establish a Realistic Budget

Your budget should account for:

  1. Purchase price: The actual cost of the land
  2. Due diligence costs: Surveys, soil tests, environmental assessments
  3. Closing costs: Title insurance, legal fees, recording fees (typically 2-5% of the purchase price)
  4. Development costs: If you plan to build or develop the land
    • Utility connections (water, sewer, electricity, internet)
    • Road construction or improvement
    • Clearing and grading
    • Well drilling and septic system installation if needed
  5. Ongoing expenses:
    • Property taxes
    • Insurance
    • Maintenance
    • Association fees (if applicable)

Pro tip: Add a 10-15% contingency to your budget for unexpected expenses.

Researching Locations

Consider These Key Factors

  1. Accessibility:
    • Is the property accessible by public roads?
    • Will access be available year-round or limited by seasonal conditions?
    • Is the land landlocked (requiring easements through other properties)?
  2. Proximity to services and amenities:
    • Distance to schools, shopping, healthcare, and employment
    • Emergency services response time
    • Public transportation options
  3. Market trends:
    • Growth patterns in the area
    • Historical and projected land value appreciation
    • Local economic conditions
  4. Climate and natural hazards:
    • Flooding risks
    • Wildfire zones
    • Hurricane or tornado prone areas
    • Drought conditions
  5. Community and neighborhood:
    • Demographics
    • Crime rates
    • Neighboring properties and their uses

Research Tools

  • Online mapping services (Google Maps, county GIS systems)
  • Local real estate websites
  • Municipal planning departments
  • Economic development offices
  • Local climate data
  • FEMA flood maps
  • US Geological Survey resources

Understanding Land Types

Raw/Vacant Land

Undeveloped land with no improvements. Usually the most affordable but requires the most work to develop.

Considerations:

  • May lack utilities and infrastructure
  • No guarantee of buildability
  • Potential for lower property taxes
  • Maximum flexibility for development

Agricultural Land

Land zoned or used for farming, ranching, or other agricultural purposes.

Considerations:

  • Soil quality and composition
  • Water rights and availability
  • Existing agricultural infrastructure
  • Special tax considerations or agricultural exemptions
  • Restrictions on non-agricultural development

Recreational Land

Properties suitable for hunting, fishing, camping, or other recreational activities.

Considerations:

  • Access to water features (lakes, rivers, streams)
  • Wildlife populations
  • Terrain and natural features
  • Seasonal accessibility
  • Hunting or recreational regulations

Residential Lots

Land in developed or partially developed areas, typically ready for home construction.

Considerations:

  • Often comes with utilities already available
  • May have building restrictions or HOA rules
  • Usually has established legal access
  • Higher cost per acre than raw land
  • May have impact fees or development charges

Commercial/Industrial Land

Properties zoned for business or manufacturing use.

Considerations:

  • Location relative to transportation routes
  • Market demand for commercial space
  • Environmental regulations
  • Economic development incentives
  • Higher investment potential but also higher risk

Due Diligence

This is the most critical phase of land buying. Proper due diligence will protect you from costly mistakes.

Legal Considerations

  1. Title search and insurance:
    • Verifies the seller has clear ownership
    • Identifies any liens, encumbrances, or claims against the property
    • Protects you from title defects
  2. Boundary survey:
    • Confirms exact property boundaries
    • Identifies encroachments
    • Verifies the acreage you’re purchasing
  3. Easements and rights-of-way:
    • Identify any third-party rights to access or use portions of the property
    • Understand utility easements that may limit building locations
    • Check for conservation easements that restrict development
  4. Deed restrictions and covenants:
    • Review any restrictions on how the land can be used
    • Understand minimum building requirements
    • Check for architectural guidelines

Physical Characteristics

  1. Topography and drainage:
    • Elevation changes that affect buildability
    • Natural drainage patterns
    • Erosion concerns
  2. Soil testing:
    • Determines soil composition and stability
    • Identifies potential issues for foundations
    • Assesses suitability for septic systems
    • Checks for contamination
  3. Environmental assessments:
    • Phase I Environmental Site Assessment for contamination history
    • Wetland delineation
    • Endangered species habitat
    • Flood zone determination
  4. Water considerations:
    • Availability of municipal water or well potential
    • Water quality testing
    • Water rights (especially important in western states)
    • Surface water features and their impact

Regulatory Review

  1. Zoning and land use:
    • Current zoning classification
    • Permitted and prohibited uses
    • Future land use plans
    • Rezoning potential if needed
  2. Building codes and permits:
    • Local building requirements
    • Permit costs and processes
    • Inspection schedules
  3. Development requirements:
    • Infrastructure improvements required before building
    • Impact fees
    • Environmental mitigation requirements
  4. Taxes and assessments:
    • Current property tax amounts
    • Tax exemptions or special assessments
    • Future tax projections

Professional Help for Due Diligence

Consider hiring these professionals:

  • Real estate attorney
  • Land surveyor
  • Environmental consultant
  • Soil engineer
  • Local builder or contractor
  • Real estate agent specializing in land

Financing Options

Land purchases typically have different financing structures than home purchases.

Cash Purchase

Advantages:

  • Stronger negotiating position
  • No interest costs
  • Faster closing
  • No lender requirements

Disadvantages:

  • Ties up significant capital
  • Opportunity cost of not investing those funds elsewhere

Traditional Land Loans

Characteristics:

  • Higher down payments (typically 20-50%)
  • Shorter terms (10-20 years vs. 30 for homes)
  • Higher interest rates than home mortgages
  • Stricter qualification requirements

Sources:

  • Local and community banks (often better than national banks for land loans)
  • Credit unions
  • Farm credit associations

Seller Financing

Characteristics:

  • The seller acts as the lender
  • Often more flexible terms and qualification requirements
  • May require little or no down payment
  • Interest rates negotiable but typically higher than bank rates

Advantages:

  • Faster and simpler closing process
  • Lower closing costs
  • More flexible for buyers with credit challenges

Considerations:

  • Ensure proper legal documentation
  • Record the transaction officially
  • Consider balloon payment requirements

Government Programs

  1. USDA Rural Development Loans:
    • For properties in eligible rural areas
    • Can include funds for land purchase and construction
    • Low or no down payment options
    • Income limitations apply
  2. Farm Service Agency (FSA) Loans:
    • For agricultural properties
    • Programs for beginning farmers and ranchers
    • Favorable terms for qualified buyers
  3. VA Land Loans:
    • For eligible veterans and service members
    • Must include plans to build a home within a reasonable time
  4. State and local programs:
    • Many states and municipalities offer land purchase assistance
    • Often tied to economic development or conservation goals

Construction Loans

If you plan to build immediately:

  • Construction-to-permanent loans
  • Single-close loans that convert to a mortgage
  • Usually include the land purchase in the loan

The Buying Process

Finding Land

Sources for land listings:

  • Real estate websites (Zillow, Realtor.com, LandWatch, etc.)
  • Local real estate agents specializing in land
  • Land auctions
  • County tax records for potential off-market opportunities
  • Driving target areas and looking for “For Sale” signs
  • Working with a land broker
  • Direct mail campaigns to landowners in areas of interest

Evaluating the Property

  1. Visit the property multiple times:
    • During different weather conditions
    • At different times of day
    • In different seasons if possible
  2. Walk the entire property boundary:
    • Note natural features
    • Identify potential building sites
    • Check for issues not visible from main access points
  3. Talk to neighbors:
    • Learn about the area
    • Understand any historical issues
    • Get feedback on your plans
  4. Document everything:
    • Take photos and videos
    • Make notes about concerns and questions
    • Record GPS coordinates of important features

Making an Offer

  1. Determine your offering price:
    • Research comparable sales
    • Consider any issues discovered during evaluation
    • Factor in development costs
  2. Write a strong offer:
    • Include contingencies for due diligence
    • Specify a reasonable timeframe
    • Determine earnest money amount
    • Include financing contingency if applicable
  3. Negotiate effectively:
    • Be prepared to justify your offer
    • Know your absolute maximum price
    • Consider contingencies and terms, not just price
    • Be patient but decisive

The Closing Process

  1. Title company or attorney selection:
    • Choose a provider with land experience
    • Compare fees and services
    • Ask for recommendations
  2. Final walk-through:
    • Verify no changes since initial viewing
    • Confirm boundary markers if placed
    • Check for any new issues
  3. Closing documentation:
    • Deed transfer
    • Bill of sale for any included items
    • Loan documents if applicable
    • Title insurance policy
    • Settlement statement
  4. Recording and transfer:
    • Ensure deed is properly recorded with county
    • Update tax records
    • Obtain copies of all documents

After the Purchase

Immediate Steps

  1. Mark boundaries:
    • Install corner markers if not present
    • Consider fencing if appropriate
    • Post “No Trespassing” signs if desired
  2. Security measures:
    • Install gates on access roads if needed
    • Remove attractive nuisances
    • Consider trail cameras for remote properties
  3. Insurance:
    • Obtain appropriate liability coverage
    • Consider specific coverage for any unique features
    • Review coverage annually

Planning for Development

  1. Create a master plan:
    • Identify ideal building locations
    • Plan for utilities and infrastructure
    • Consider phased development if appropriate
  2. Obtain necessary permits:
    • Building permits
    • Septic or well permits
    • Driveway or access permits
    • Land disturbance permits
  3. Infrastructure development:
    • Establish access roads
    • Arrange for utility connections
    • Prepare building sites

Land Management

  1. Maintenance requirements:
    • Brush clearing and mowing
    • Erosion control
    • Tree management
    • Invasive species control
  2. Conservation practices:
    • Soil conservation
    • Water quality protection
    • Wildlife habitat improvement
    • Sustainable land use
  3. Income potential:
    • Timber harvesting
    • Agricultural leases
    • Hunting leases
    • Solar or wind leases
    • Mineral rights

Common Pitfalls to Avoid

  1. Insufficient access rights:
    • Ensure legal, deeded access to the property
    • Verify easements are properly recorded
    • Understand maintenance responsibilities for shared roads
  2. Overlooking utility challenges:
    • Distance to existing utilities
    • Cost of extending service lines
    • Alternatives for off-grid properties
  3. Underestimating development costs:
    • Get multiple quotes for major work
    • Factor in time and complexity
    • Include permitting and impact fees
  4. Ignoring future plans for the area:
    • Check local comprehensive plans
    • Research planned infrastructure projects
    • Understand growth patterns and zoning changes
  5. Neglecting water issues:
    • Seasonal flooding or drainage problems
    • Drought concerns
    • Water rights conflicts
    • Well or municipal water availability
  6. Rushing the process:
    • Land will still be made tomorrow
    • Take time for proper due diligence
    • Visit multiple times before committing
  7. Failing to work with local experts:
    • Every area has unique characteristics
    • Local knowledge is invaluable
    • Build relationships with community experts

Resources and Tools

Online Resources

  • USDA Web Soil Survey: Detailed soil information
  • FEMA Flood Map Service Center: Flood risk assessment
  • Local GIS (Geographic Information Systems): Property and zoning information
  • County Assessor websites: Ownership and tax information
  • State DNR/DEQ websites: Environmental regulations
  • Extension offices: Agricultural and land management information

Professional Contacts

  • Real estate attorney specializing in land transactions
  • Land surveyor familiar with the region
  • Local builders with land development experience
  • Environmental consultants
  • Soil and septic system evaluators
  • Foresters or agricultural advisors
  • Water well drillers

Mobile Apps and Tools

  • GPS mapping applications
  • Property line apps
  • Soil identification tools
  • Sun tracking apps (for solar orientation)
  • Topographic map viewers
  • Distance and area measurement tools

Books and Publications

  • Land buying guides specific to your state
  • Agricultural extension publications
  • Sustainable land management resources
  • Legal guides to property rights

Final Checklist Before Buying

  • [ ] Property boundaries clearly established and marked
  • [ ] Title search completed and clear title confirmed
  • [ ] All easements identified and acceptable
  • [ ] Access rights secured and documented
  • [ ] Zoning allows intended use
  • [ ] Soil tests completed and satisfactory
  • [ ] Water availability confirmed
  • [ ] Environmental assessments completed
  • [ ] Utility availability and costs understood
  • [ ] Building permits obtainable
  • [ ] Future development plans for area researched
  • [ ] Tax obligations confirmed
  • [ ] Financing secured
  • [ ] Budget for improvements established
  • [ ] Long-term ownership costs calculated
  • [ ] Insurance options researched

Remember that land ownership is a long-term commitment. Take your time, do thorough research, work with qualified professionals, and make decisions based on facts rather than emotion. By following this guide, you’ll be well-equipped to find and purchase land safely, efficiently, and with confidence.

img

Benny

Join The Discussion

Compare listings

Compare