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What You Need To Know When Buying Land – When you’re ready to buy land, there are a few things you should know. We will look at the importance of buying land and some of the benefits it brings.
Depending on where you are, finding lots to build on may not be easy. In some areas, land is scarce. Very often, builders and developers are familiar with the best land.
What You Need To Know When Buying Land
You may have to do some searching if you are interested in buying land. Land is important to own for several reasons. First of all, it is an investment. The longer you hold onto your land, the more it will appreciate in value.
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Second, owning land gives you a place to call home. You can build on it or use it for other purposes such as farming or hunting.
Finally, owning your own piece of property allows you to feel connected to the world around you and strengthens your sense of independence.
One of the most common ways to buy land when you are not ready to build is to get a land loan. There are a few things to keep in mind when getting land financing. The first is to make sure you have the correct credit score.
Like buying a house, an excellent score will be rewarded. Buying a home with a low credit score is not only more challenging, it will also result in less desirable terms.
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Another thing you want to keep in mind is the interest rate. Rates range from about 4% to 8%. Finally, keep in mind that loan terms can vary depending on the lender and the type of land you’re buying.
There are specific lenders that specialize in providing land loans. Some great places to start are community banks and credit unions. Be prepared to receive significant participation. Many lenders require at least 25-30 percent down.
If you’re ready to buy land but aren’t sure where or what to look for, there are many resources available online that can educate you.
Some tips for finding land include looking at zoning maps, checking real estate listings, and searching for properties that match your preferences.
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Once you’ve narrowed down your search to the area you want, it’s worth talking to a local estate agent. Hiring a buyer’s agent is worth the effort whether you are looking for land or a house to buy.
A local real estate agent can help you find the perfect lot to build your dream home on. They have access to all local information and can help you compare different properties.
They can also help you get a loan if you need one and can give you advice on how to negotiate the best deal.
Some agents are well connected and know of land opportunities that are not listed on the Multiple Listing Service (MLS). When you find lots of things you are interested in buying, the agent can also provide you with a CMA. An agent’s value analysis will ensure you don’t overpay for the land. As with houses sold, there should be some comparable land sales to determine the appropriate offer.
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When buying land, it is necessary to research public services and confirm that the property can be built. You’ll want to start with zoning to make sure it meets size and setback requirements.
Other important things to check is whether there are any wetlands that require conservation approval. Having wetlands can limit what and where you want to build.
If there is no public sewer and a septic system is required, lot testing will be required. Does the lot have public water or do you need to drill a well?
You will need to make sure the perk and deep hole test is done. Understanding the results that followed will be essential to developing a septic system plan. It will also be most important to ensure that the appropriate utilities are available.
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In other words, does the property have gas? Are there electrical installations? Does the lot have public water or do you need to drill a well?
When you are building a custom home right away, a construction loan could be a better alternative than a land loan.
This way, you can build a home to your specifications without any contingencies. Once the loan is paid off, you will own the house outright and can sell it or use it as collateral for another loan.
A construction loan will allow you to combine the costs of construction and land acquisition into one permanent loan. You will need to provide construction drawings of what you plan to build.
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Before buying land, consider upfront costs such as title insurance and recording fees. These can add up to a significant amount, so factor them into your budget before purchasing.
There are other key considerations to be aware of when using construction finance. See the resource provided for better understanding. Construction loans are very different from traditional financing.
Buying land is an important decision that should not be taken lightly. By understanding the benefits and risks involved, you can make an informed decision that is right for you.
Researching the right type of financing should be at the top of your checklist. You should now have a better understanding of what you need to know when buying land.
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About the Author: The above article on “6 Things You Need to Know About Buying Land” was written by Bill Gassett. Bill has worked in the real estate industry for the past thirty-three years. He works for RE/MAX Executive Realty in Hopkinton, Massachusetts. Bill enjoys providing reliable information to buyers, sellers and fellow real estate agents to help them make the best decisions possible. His writing has appeared on RIS Media, the National Association of Realtors, Inman News, Placester, Today.com, Credit Sesame and others.
About Rochester’s Real Estate Blog: Rochester’s Real Estate Blog is owned and operated by Kyle Hiscock of the Hiscock Sold Team at RE/MAX Realty Group.
Since launching in 2013, Kyle has published over 150 quality, in-depth and unique real estate articles on the Rochester Real Estate Blog covering topics ranging from home selling to mortgages and everything in between! In addition to quality real estate related content, there are also many quality articles related to the Greater Rochester, NY area.
The Rochester Real Estate Blog is recognized by many reputable websites as one of the best real estate blogs to visit and follow! In addition to being recognized as one of the best real estate blogs, Kile has been recognized as one of the best Realtors on social media by several organizations and websites.
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With over 40 years of combined experience, if you’re thinking of selling or buying, we’d love to share our knowledge and expertise.
We serve the following areas of Greater Rochester, NY: Irondequoit, Webster, Penfield, Pittsford, Fairport, Brighton, Greece, Gates, Hilton, Brockport, Mendon, Henrietta, Perinton, Churchville, Scottsville, East Rochester, Rush, Honeoie Falls, Chili and Victor NI. If you buy building land to build your dream home, you need to make sure you choose the right land. When buying building land, there are more things you need to know before buying land than you might expect. If you don’t learn as much as you should about the land, building your home could cost more than expected.
Most people know the basics, for example, how much is an acre, but many other facts besides land size must be researched.
Like buying a home, you’ll want to get your finances in order before looking at land. Do you plan to build immediately or hold onto the land for a while? The answer to this question will dictate the type of financing you choose.
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A construction loan will be best if you build soon after buying. You will be able to finance the purchase of land combined with the cost of building a house in one loan.
A land loan will be a better choice when buying and holding. The landlord will also want to be pre-approved for a mortgage so they know you qualify to buy.
There are many factors to consider, such as school district, proximity to friends, family, and your job, lot size, and of course, price. Prioritize the most important factors and be prepared to compromise on some of the others.
Even if you think you’ve found the right plot, it may not be as suitable as it seems. Soil conditions may mean more money needs to be spent on excavation, or the soil could settle after your home is built, damaging the structure.
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There is a choice between developed and undeveloped land when looking for a building plot. Undeveloped land will not have utilities available and you may need to connect it to a road. A developed plot will already have these things, making it easier to build, although it will cost more.
Regardless of whether the land is developed, you should know what utilities are available. Are water, gas, electricity and cable already available or will you have to pay the cost of connecting them to the plot?
If the land is rural, water may not be available, meaning a well must be drilled and a septic tank installed.
You will need building permits
