Tips Before Buying Land Guide

For many of us, we dream of building our own home on our own piece of land. Building a dream home signifies for many - The American Dream. A home that we can design, build, create, and bond with. When the moment comes that you are ready to start building your dream home - you need to know what are the things that you should look for before you purchase raw land. You need to know tips that may prevent a headache and save you money when purchasing raw land. You need to know what all terms can mean and how they will affect the purchase of raw land.

Before we go into what all terms really mean and how they will affect your purchase, let's first get our basics straight by affirming what exactly is raw land. Raw land is the surface of the earth before you begin to build your home. It's the untouched surface, without any improvements such as clearing trees, leveling out the land, making a driveway, or putting down concrete. It's also not uncommon for the property lines to be exact. Meaning your property line ends exactly where your neighbors begin.

1. County Maintained Road and Easements

Many raw land deals are done in rural areas and this property may or may not have road access. But if it does have road access the road may be a private road or maybe a county maintained. It doesn’t matter if it is paved or graveled, however, the key is to have this road county maintained and you have access to it. The problem entails if the road access is private because many times you won’t be able to get permits for building, e.g. septic tanks. If you don't have access to your land your property is landlocked. Then you would have to pay your neighbors to put an easement on their land to get access to yours. This can be very costly. You will have to get a survey, a partition of your neighbor's land and your neighbors would have to agree to all of this. From my experience, most neighbors are not willing to divide a piece of their property to give it to a complete stranger.

Also, if it is a private road, knowing if you have an easement is essential! Knowing the cost of maintenance, what rights your neighbors can have and who can cross your property. An easement is either a right of use or a right of access. These rights give the owner the permission to use and build upon the other's land, either by way of building rights or open space easement provision. Also, makes

sure to ask if you have a scenic easement over your property if that will affect the building process. If your property has no access to a road then I wouldn't recommend buying the property.


2. Terrain and Elevation

The terrain is a huge factor when purchasing raw land. Many land buyers think they can buy raw land before they even see it. Some buy raw land thinking they had a good deal. Then realizing they can’t do anything with it. In my opinion, I would make sure that the grade of the land does not exceed 20 percent.

Another factor you need to consider is the possibility of land stability. Is the area known for mudslides, earthquakes, volcanic, or floods (I’ll talk about floods in a moment)? Knowing these conditions is important before you make a purchase. There have been many instances where people purchase land and only later find out it is known for mudslides or floods. This can be a huge problem because the land could lose its value or even worse the cost to rebuild could be more than the land itself.

The final thing to consider is knowing how your surrounding area will affect your property. Looking at your property in relation to other surrounding properties is important.


3. Treed Vs. Cleared

Another factor when considering purchasing land is whether the land is cleared or if it has an abundance of trees and vegetation. If you want to develop a house, you need to take into consideration the local regulations that either permit you or not to cut down your trees. If you do have permission to cut down trees, you may have to replenish the trees elsewhere on the property depending on what state you buy the land in. Also depending on area, it might cost a fortune to remove trees. So you have to take the price of vegetation and tree removal into consideration with the purchase price. Also, check local and state regulations before removing trees.


4. Surveys and Legal Description

Every purchase of raw land should have a survey and legal description. These documents will show you the boundaries of the property that you are buying. After all, is said and done, these documents can prove to be helpful if there is a dispute down the road. The surveyor will use these boundaries to create an accurate map of your land.

The purpose of the survey is to establish where your property starts and ends.


5. Wetlands

Depending on your state. The Department of Environmental Protection may define wetlands is inundated or saturated by surface water or groundwater under normal circumstances and the vegetation is being protected. This does not necessarily mean that the land is actually wet. It may mean that there are some types of vegetation that the government is trying to protect. Understanding this, it becomes significant to know before you consider purchasing land. For one, it makes the value of the land much lower. Also, if you do want to develop the land you will need to purchase Wetland mitigation credits to basically appease the government and these credits can be very expensive. There is a tool called Wetlands Mapper that you can use before you consider purchasing land. You may think that you landed a great deal but when you find out that the lot may be on a Wetlands, you know why now.


6. Floodplain

A floodplain is an area that threatens frequent flooding over a long period. It could be a river, a creek, an area in front of a waterfall, or artificial lakes that can overflow due to the rainwater during heavy rains in the rainy season or intense flooding. Floodplains are areas where the land underwater floods for more than 24 hours during the wet season or overnight during the dry season. Flood zones are different from Wetlands. Flood zones are determined by FEMA and you can also check through the FEMA Flood Map Tool.

However, for the most part, it can be difficult to sell in a flood zone. Flood zones are more common than you think. If you are building in a flood zone you need to make sure that insurance companies will cover the property. Because if a resident can’t get flood insurance this may make or break a deal. If an insurance company does cover an area with a flood zone. The insurance premium is going to be higher.


7. Utilities

Obviously having access to utilities is important. Not having access to utilities can be a deal-breaker. You need to make sure if the property is accessible to sewage, water, or electricity. If the property does not have access to water lines. A well is going to be needed, so it can give you access to water. First, depending on where you live it might very costly to get a well. Second, you have to make sure you own the water rights before buying the land or digging a well. We will discuss mineral, water rights later on.

A new potential landowner has to think about their access to electricity. Your electricity may be costly if you live in an area with no power lines nearby. The power company can charge an arm and a leg and sometimes, 10, 20, 50, even 100 thousand dollars to run wires for electricity. It would be beneficial for you if you knew that there where previous electricity ran. Knowing if the land has access to utilities can raise or lower the value of the property.

If the property you want to buy does not have sewage lines that run up to it you might need a septic tank. The first thing you must get is a perk test to determine if your property can have a septic tank in the first place. A perc test is a test to determine the water absorption rate of soil in the preparation for building a septic drain field. In some states, you can pay the county a fee to give you a test and in others, you might have to call a private company. If the piece of land doesn't have sewer lines nearby and does not perc you basically can't build a dwelling on it.


8. Cell Service and Communication

We are living in a day and age in which being connected to a community network is extremely important. For most rural areas having access to high-speed internet is extremely limited and if they do have access (satellite internet) it usually comes with costly plans that limit your data. How or when this problem will be fixed is unknown. The land may not have access to cable or a fiber line for internet use. Though, having an alternative like cell service can make or break a deal.


9. Neighbors, Smells, and Sounds

Neighbors can make all the difference in the world. And at first, it may be difficult to get to know them. But if you are planning on building by neighbors as your residence you may want to study them and get to know them a bit before even considering purchasing land. Perhaps the neighbor may have a big shooting range, pig farm, horses, geese, ducks, barking dogs, loud engines running, or some type of illegal activity. Just make sure you are comfortable with your potential neighbors. And the only way is to get to know them a bit. Go talk to them. For the most part, this isn’t a problem but, sometimes, neighbors can make or break a deal.


10. Zoning Ordinances

Understanding where the vacant land is zoned is critical. There have been situations in which you may think you are getting a bargain deal, paying pennies on the dollar for some raw land, and finding out that the land is zoned as conservation land, in which, you can’t do just about anything with it. And getting zones change can be very lengthy and even costly, sometimes taking several years to get them changed. Therefore, be sure to check with local authorities on what zoning ordinances and what you can build on the property before buying the land. Check local and state regulations.


11. Natural Hazards

A natural hazard disclosure will tell you if the land has known hazards. Perhaps the land has fire hazards. You may want to know if the local fire department has volunteer firefighters or supported firefighters and where they are located. How far from your property are the firefighters located? Perhaps you may consider maintaining a private pond for fire emergencies.


12. Mineral, Timber, and Water rights

Mineral rights are property rights to exploit an area for the minerals it harbors. Mineral rights can be separate from property ownership. Mineral rights can refer to sedentary minerals that do not move below the Earth's surface or fluid minerals such as oil or natural gas. When buying a property you have to make sure that you buy it with the mineral rights.

For example, let us say you own a piece of property and it has oil beneath its ground, but do not own the mineral rights. Whoever owns the mineral rights can sell the oil beneath your land to a company and you can not do anything about it.

Water rights are probably the most important of the three I am mentioning. If you live in a state that has a lot of deserts like Arizona, Colorado, California, New Mexico, Nevada, Utah, etc. You have to make sure you own the water rights. This is going to determine if you can put a well on the property.

For example, if a local farmer or rancher owns the water rights for your property. They literally own the water that is under your ground and can use it as they please. So if you are thinking of buying land in a desert environment with no water utilities you need to own the water rights!

Timber rights are similar concept as the previous two. Timber rights allow an individual to own all or part of the trees on a property without actually owning the ground where they grow. So a timber company can own the trees on your own property. You should be able to call a title company to determine who owns the mineral rights.

Also, all the different ways Mineral, Timber, and Water rights can be own is dependent on the state. So check local and state regulations.


13. Liens

First and foremost, you have to check if the property has any liens. Did the previous owner use a bank loan to buy the property and still owes the bank? They might have been used it as collateral. The first thing you have to know is if the property has any debt tied to it.


14. Did they pay their taxes?

This is very important! Did the previous owner pay the property taxes on the property? If they didn't two things might happen depending on the state. First, the property might go to a tax deed auction while you are trying to buy it. Second, you might have to pay the back taxes which can add hundreds to thousands of dollars to the initial purchase price.

15. Clean Title

This portion is very state-specific but very important. Does the property have a clean chain of title? This means the chain of title does not have any gaps in the chain in ownership or other issues that raise doubts regarding ownership. It is vital to get a good title company to vet the property before you buy it. I do not recommend buying a property without at least first checking the chain of title with a title company. This service varies depending on where you buy the property, but usually costs $100-$200 to do a title search. I would also highly recommend getting title insurance to protect yourself in case the title company does make a mistake. The title insurance protects you in the situation that the title

company makes a mistake in their title search and the costs vary depending on the location and purchase price of the property.

How do you check all this?

75 percent of everything I just listed can be check by either the county or a title company. But I'll list how can you do your initial search.

1. Utilities - local county office or local utility company

2. Flood zone- or local county office

3. County Maintained Road and Easements - local county office

4. Terrain and Elevation - survey company

5. Surveys - Survey company

6.County Maintained Road and Easements - local county office

7. Zoning Ordinances - local county office

8. Mineral, Timber and Water rights- local county office, but preferably a title company

9. Liens- local county office, but preferably a Title company

10. Taxes- local county office and preferably a Title company

11. Clean Chain of title - Title company