5 Things You Need to Know Before Buying Land

When my husband and I went on the hunt for land, we assumed it would be pretty simple to find something that fit our needs. We did our research and had a general idea of what we wanted. Surely we would be able to find exactly what we wanted and start building the house of our dreams on it within a few months, right? Wrong! It turns out, buying land is not at all like buying a house.

There are a lot of things you need to know and understand in order to find what’s right for you. Don’t let that worry you, though! I promise to share all we learned so that you will go into the hunt armed with as much information as possible.

Our Experience

When we finally decided we wanted out of the suburbs and onto some land, we had a vague idea of a budget and what our “must-haves” were. Something over 10 acres, lots of trees, and a pretty view. We had visions of sitting out on our back porch, cozied up in blankets while drinking our cup of coffee, marveling at the animals in our pasture. We quickly realized that while this was the end goal, there was a lot more knowledge we needed in order to make an informed decision about where we wanted our forever home.

After months of looking at many different properties, and learning the ins and outs of purchasing land, we finally closed on a 30 acre property that fit our needs perfectly. As a bonus, my parents purchased part of it as well to build their own home on!

In order to help you skip over the bumps in the road that we hit, I’ve put together a list of the top 5 things you need to know before buying land!

1. Go in With Your FINAL Budget in Mind

We went in with a vague budget of what we wanted to spend on the land and house combined. What we didn’t realize at the time was how much it was going to cost to develop the land. After the first few properties we saw, we finally sat down and hammered out a true budget. Let me tell you, when we worked out the cost of all we would need, I was shocked! Developing raw land and then being in charge of the upkeep all on your own isn’t cheap BUT it’s completely achievable as long as you go in with a realistic budget.

There are many steps to developing raw land and I plan to make a  more detailed post about that very soon. In the meantime, I’m still going to throw a lot of details at you, because I want you to have all the info before you even start looking! So, here are a few things you should budget out ahead of time in order to come up with your most complete budget.

Utilities and Equipment

I think it’s fairly obvious that you will need electricity and water in order to build a home. However, something a lot of people may not know is that depending on the specific property, you may be responsible for getting those things set up yourself.

Water

First, keep in mind that you will need utilities. The more rural the area is, the greater the chance is that you’ll be responsible for getting water and electricity out to your land. Does the land you’re looking at have access to city water and sewer, or will you need a well and your own septic system? If you don’t have access to these city utilities, then you will need to install your own. We were able to get quotes from 3 local companies who install both wells and septic systems and were quoted around $14,000 in total. It’s a good idea to get quotes in your area because the prices vary widely depending on where you’re located. Your realtor should be able to provide you will a few local companies who do a great job.

Electricity

You also need to account for electricity. If there are no power poles on your land, you will need to pay the electric company to bring the power lines to you so that you can power your well, and eventually your home and barn! In order to get electricity on our land, we needed to bring power from a pole that was six hundred feet away. This cost us around $5,000. Again, the price can vary so call the local power company and ask what their price per foot is. Something to keep in mind is that land with all of these things in place usually sells for a premium. It was worth it to us to organize and pay for these things ourselves and use the savings for future projects.

Farm Equipment

The next thing you may not have thought about is the farm equipment and tools that you will need to keep up with the upkeep of the land. A big one, dependent on the amount of acreage you are looking at, will be a ride-on mower or even a tractor to keep the grass mowed down. When we closed on our land, the weeds and grass were up to our knees, and took a full day of shredding with the tractor to get it in check. We are so thankful that my in-laws allow us to use theirs, so it is one less thing we needed to purchase upfront.

You’ll also need tools for fencing so that you can repair any downed or damaged fence. This is especially important if you plan to have animals in your pastures. A property that is fenced all the way around is a huge plus because fences can be very costly. In fact, depending on the type of fencing you want, it can cost you anywhere between $2-$30 per foot!

Talking about a budget isn’t always enjoyable and can really take the excitement out of the process, but I promise you won’t regret going in with a rock-solid plan!

2. Restricted vs. Unrestricted Land

In short, restrictions can be put on the land you buy that tells you what you can and can’t do with it. There are many pros and cons to each and it’s definitely important to know what it could mean for your property either way.

One of the many reasons we chose to leave the suburbs behind was due to HOA restrictions. After living in neighborhoods that required approval for every little thing from permission to install a basketball hoop, all the way down to being told what our flower beds should look like, we were ready for a change. Because of this, we were set on finding unrestricted land so that we could make it a true homestead in whatever way we wanted.

Pros and cons

The first property we saw checked all the boxes, but it was in a neighborhood that had a TON of restrictions. So many in fact, that one builder politely told us they wouldn’t be able to build our home there. They required lots of fees, extra permits, and even dictated what the pitch of our roof would have to be. The deal-breaker on this one was that we couldn’t even keep chickens! After that, we told our realtor that we didn’t want to see anything with heavy restrictions.

With that being said, there are definitely positives to living in a restricted area. Restrictions can protect your investment by making sure that your neighbors are keeping up with their property and aren’t using it for any kind of business that might lower the value of your own land. Sometimes a listing will say “light restrictions” and what that means can vary. What we found in our area is that they were typically very reasonable. For many, people light restrictions are a plus. As I said, we were able to find land that was completely unrestricted but we were sure to scope out the neighbors to make sure we were comfortable with how the property was being used.

Still, there’s nothing to stop one of them from using the property for a used car lot or something not so appealing, so there’s always some risk in that! You may choose that some light restrictions are more your style, and your realtor should always provide you with a list of what those are before looking at the property.

3. A Real Estate Attorney Might be Worth the Investment

Mineral Rights

When it comes to purchasing land, there are a few major differences, two of which are the subjects of mineral rights and road easements. My husband and I had a vague idea of what each of these things meant, but when it came right down to it we were not at all qualified to understand these multi-page documents. In fact, we hit some major snags in this area and our deal almost fell through because of it.

Starting with mineral rights, I will not pretend to be any kind of expert on this. If you want a very detailed breakdown, you can see a more in-depth breakdown here. What I will say, is that I wish we had hired a real estate attorney to look over the mineral right portion of our contract before we signed. An attorney may have been able to help us negotiate a more favorable agreement in this area.

Road Easements

Road easements are another topic that is important to have an understanding of. An easement is how you are legally allowed to access your property. Our land is located down a privately owned gravel road. We have to pass two other properties in order to get to it and we are all responsible for the upkeep. When we had our land surveyed in preparation to purchase it, we found some legal issues not only with that easement but also found that there was an old easement road granted to the person who owns the property behind us. Not only did this mean he could drive straight through our land whenever he wanted to (not that he would) but it was right smack dab through where we wanted to build our home! You can’t build on an easement road so it was imperative that we get this easement released.

After weeks of trying to navigate it with the seller on our own, we finally decided to bring a real estate attorney on board. It was hands down the best money we spent throughout the whole process. He very quickly was able to decipher the easement documents and untangle a very complicated situation. He then drafted all the legal documents to be signed to release the easement and got us moving again. Without him, we truly would not have been able to salvage the deal. If you are finding out that some of these documents are over your head, the couple hundred bucks its costs to hire an attorney to look them over could really save you thousands in the long run!

4. Flood Zone Status

Seems pretty basic, but this is something that could have big implications down the road. When looking at a property, it’s important to determine for yourself whether or not some or all of it is in a flood zone. You can do that here.

In some counties, if even a tiny corner of your land is in a flood zone, they require you to build up your foundation to a certain height. This can take a big chunk out of your housing budget! After living through Hurricane Harvey here in Texas, we chose not to take any chances with a flood zone!

5. What is Your Ultimate Goal

Last but not least, keep your end goal in mind. It can be so easy to become discouraged when looking at land. It can seem like you’ll never find your dream property and they certainly aren’t making anymore. Don’t give up and don’t settle! If you know you want trees and woods on your property, hold out until you find it. If having a little hill where you can build your forever home is what you’ve always dreamed of, keep up the search until you find a hill that feels like home.

It can take years for some people to find that perfect property. In our case, the start of our search to closing day was six months on the dot. Once you’ve found your perfect match, the most exciting part of all begins- you get to make it your home!

This isn’t an exhaustive list of things to know when looking for your perfect piece of property by any means so it is still important to do your own research. I could honestly write pages and pages about all we learned but this is what I feel will help you the most. My hope is that by arming you with this information, you will go into your search with the confidence to make the best choice for you and your family. I would love to hear if this information was helpful to you, so please feel free to drop a comment below.

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