Real Estate Tips for First-Time Land Property Buyer
Buying a piece of land can be a very worthy investment. You can cultivate, develop, build a house, or sell it to interested buyers at a price that you want.
For first timers, buying land can be exciting, if not to say, an overwhelming experience. You have to check your emotions, though, because this endeavor involves lots of money. Certainly, you don't want to spend a considerable sum of cash on a no-good property.
For a little help in purchasing your first land, here are some real estate tips that you should keep in mind.
Know What You Want to Do with the Land
Land buyers have different reasons for buying a parcel of land. They either want to use it for recreation, cultivate it as a farm, build a house on it, or develop it as an investment property.
You have to figure out your reason why you need to buy land in the first place. In this way, you’ll have an idea of what type of land you should purchase and how much your budget would be.
In figuring out your purpose of buying land, you'll also discover the pros and cons of being a land property owner. There will be additional expenses, such as insurance and property taxes, that you need to cover. If you purchase land beyond the city limits, likely, you won't find utilities that you're used to in the city.
But, as mentioned earlier, buying land is an excellent investment as you have the opportunity to profit from it when its market value goes up.
Know Your Budget
Aside from the property’s price, there are also extra expenses that you have to consider when buying land. Additional costs like property taxes will surely have a dent on your budget. In some places, the property tax rates are higher than in other areas, which might influence where to purchase a land property.
So, look for land in places that have affordable tax rates. Always include extra expenses in your budget. Also, keep in mind that the bigger the land you buy, the higher it will cost you (that’s a no-brainer, really).
Of course, you can also contact a lender to get a mortgage to finance your land purchase. Make sure to ask your lender for a pre-approval so that you won’t have problems when you talk about price with the seller.
Your lender is also a big help in giving you a mortgage amount that suits your income volume and frequency. So, It’s crucial to get in touch with a lender that specializes in land mortgages. Do your research or ask your realtor where you can find such a type of lender.
Work with a Realtor
Hiring a realtor saves you time and effort when looking for a piece of land to buy. Look for a realtor who has the expertise and experience in dealing with land properties. It’s because there’s a difference between buying land and purchasing a house.
The real estate professional you'll hire must be well-versed in land deals. He/she must know how the land market works and where to find the best land property that suits your needs. Some buyers buy land without representation to avoid paying for a commission, but working with a realtor proves to be an advantageous approach.
Realtors have access to real estate databases, such as multiple listing services, to help you find the best parcel of land that you’re looking for.
Consider Zoning Requirements, Easements, and Environmental Issues
There are various considerations that you should look into when buying land. For example, you should consider zoning requirements to ensure that you can use the land according to its purpose.
Lands are zoned into commercial, industrial, recreational, agricultural, and residential. Obviously, you can't develop a recreational park in a land that's meant for agricultural use. Ask your realtor or research about the property you're interested in so that you won't have any issues with zoning.
Moreover, you need to determine if the land comes with a legal right of access. This consideration is crucial to avoid problems with other landowners in the area. A lack of legal access can have a very negative impact on the value of a land property.
You must also look for any environmental problems. Some land properties have issues with smell or toxicity, which can affect their future use.
Work with a Trusted Title Company to Close the Deal
Upon closing the deal, go to a trusted title company to ensure that the land title is legitimate. When purchasing land, it's also a must to get title insurance to protect you from financial losses caused by a defective land title.
Aside from working with a title company, you can also opt to hire an attorney to handle the paperwork work for you. But it would be best if you worked with an attorney whose focus is on real estate deals.
Make sure to follow the tips in this article if you plan to purchase land for the first time. These tips can be a big help to find the property that's right for you and ensure that your real estate transaction won't have problems.