A Beginner's Guide to Property Easements in Land Real Estate
Learn the basics of what easements are, how they work, and what you need to know when buying or selling land.
From finances to closing, learn how to buy land in 9 steps so you know what to expect as you start your search.
Aspiring to be a landowner but not sure where to start?
You’re not alone. Buying land is more difficult than buying a house, and there are extra details you should be aware of to ensure your new property doesn’t come with unwanted surprises. For example, the last thing you want is to buy land that sits under flood waters most of the year or isn’t zoned correctly for your intended use.
In this guide, we’ll break down the basic steps involved in buying land so you know what to expect as you start your search.
Keep in mind that laws regarding land real estate vary between states, so we do recommend consulting appropriate professionals throughout the process. In most cases, it makes sense to work with an experienced land broker, who has helped numerous individuals and families find the right property at the right price.
To jump to specific topics on how to buy land, use the contents section below.
Step 1: Evaluate Your Finances
Step 2: Explore Financing Options and Pre-Approval
Step 4: Start Searching for Land
Step 6: Make an Offer and Go Under Contract
Step 7: Schedule a Land Survey
Step 8: Complete a Title Search
Step 9: Close and Transfer the Deed
Are you dreaming of a homestead or do you want a pristine hunting retreat? Are you looking to make passive income with a timber tract or start a family farm? Do you want to earn income from your land?
Land ownership comes in many different forms, and your answers may dip into a few different categories. Regardless, get clear on why you want land to begin with because intended land use will shape your search for the perfect acreage.
Take the time to write down all your must-haves. These can vary considerably based on intended use. Wild game and habitat considerations will matter more if you’re looking for a hunting property. Soil, water, and access roads are top of mind for farming endeavors.
Thinking through deal breakers ahead of time will keep your search more focused. It’s also helpful to bring this information to potential brokers so they can match the right property to your goals.
Before you start your search, create a realistic budget by asking yourself these questions:
Obtaining financing for land is more difficult than securing a loan for residential real estate because land represents a bigger risk for lenders. This is especially true for raw land, which doesn’t have any form of collateral on it (like a house).
As a result, lenders look for a higher credit score than for typical mortgages. Most land financing also requires a 20-50% down payment, with the lower end applying to more developed property and the higher end applying to raw land.
When thinking about what you can afford month-to-month or even annually, remember there are also costs associated with land ownership outside of monthly loan payments. Leave room in your budget for utilities, property taxes, and potential improvements to make the most of your new property.
Don’t wait to learn about land loan options. Some of the common ways to finance land include:
When looking into financing options, consider what will work best for you in terms of down payments, repayment periods, and interest rates.
Ask potential lenders if they offer pre-approval. If so, the lender will pre-qualify you for a certain amount of financing with an estimated interest rate. If you receive a pre-approval offer, you may be able to negotiate a better price because the seller knows they can close faster.
Pre-approval also narrows your search further by giving you a set budget ahead of time.
Because land is more difficult to purchase than a house, having the support of an experienced broker will make both your search and the transaction smoother.
However, you shouldn’t settle on just any real estate broker. Seek out a land expert who understands the regional market and how certain details, such as drainage ditches or easements, might impact your goals.
A broker can help with most of the following steps, like:
When working with a broker, you’ll likely sign a buyer broker agreement. This legal contract will detail both the broker’s and your duties, compensation, and the type of property and price range you’re looking for.
If you choose to work with a land broker, they will help you find land for sale based on your needs and budget. Regardless, there are numerous ways to find potential property.
Chances are you’ve already browsed online listings and dreamed of land ownership. Acres offers easy access to thousands of land listings across the U.S. Once you’ve done some online research, consider expanding your search.
Check local newspapers, go for a drive in the countryside, look for auctions, and ask around. Acres also includes parcel ownership and other info that may help you discover leads. It’s often possible to find off-market opportunities that have far less competition than the listings you find on major websites.
Once you find a potential property, make sure you gather as many details as possible before making an offer. If you’re working with a broker, they’ll conduct due diligence for you to identify any deal breaking details.
Below is a quick breakdown of what to consider when looking at a property. If you’re conducting your own research, a lot of this information can be found through public records and land data tools, like Acres.
While research is important, remember that not all details will be reflected on paper. Take the time to walk the land and look for potential trouble areas.
If you aren’t already working with a broker or lawyer, it’s advisable to do so for this step. Your offer will be a written contract that includes your contact information, property details, the price you’re willing to pay, and terms of the deal, like inspection periods and contingencies.
A real estate lawyer can prepare an offer that protects you. That way, if the land survey or title search turn up deal breaking surprises (e.g. a large portion of the property lies in a flood plain), you have the option to back out.
Once you’re under contract, the seller will be responsible for providing disclosures about the property, such as flood damage disclosures. Keep in mind that required disclosures vary by state.
Your lender or title insurance company may require a land survey, which is conducted by a licensed surveyor. Even if this is not the case, you may want to consider hiring a surveyor for peace of mind.
There are different types of surveys. Lenders are usually looking for a mortgage inspection survey, which verifies deed accuracy based on public records.
A more comprehensive survey not only looks at all public records but requires a site inspection. This identifies what’s included in the deed, if there are encroachments from neighboring properties, easements and rights of way that impact the property, zoning information, and more.
Another important step that comes shortly after putting in an offer is the title search.
If you do not have a broker, you can either work with a real estate lawyer or a title company to ensure the seller has a clean title. This means the seller has the legal right to sell the property and the title is free of defects, such as liens or unresolved ownership claims.
As part of the title search, you should also receive forms for the purchase as well as assistance with making sure the deed is documented correctly.
On the date of closing, all documents will be signed and the deed will be transferred. Come prepared with a state issued ID and be ready to make your payment. If you’re working with a lender, ensure your financing is squared away before closing day.
Once you close, you will need to file the deed. Who files the deed varies by state. In some states, you will have to do it yourself. In others, a broker can do it for you.
While buying land can be a lengthy process, taking extra time to evaluate a property or working with experienced professionals will increase your chances of finding high-quality land at the right price. In general how to buy land:
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