Are you considering buying land online? If so, you should first know about the buying process and make a checklist of the activities. That way, you’ll avoid making a purchasing decision that can turn to into a major issue.
Before you buy land for sale online, think about how you want to use the land and find out the requirements for zoning. Also, have the property surveyed and see how much you’ll be paying in property tax.
Don’t Draw Up an Agreement until Your Check the Title
Some people, in their excitement to buy land, overlook researching the title. The last thing you want to have happen is to buy real estate where you owe money for liens or taxes. Therefore, make sure you conduct a title search before you consider making an offer. Make sure you own the title free and clear.
Don’t Leave Out These Important Details in the Contract
When you finally come to an agreement, you should have the following details in the land contract:
- The property’s legal description
- The names and contact information for the purchaser and seller
- The purchase price and down payment, plus the interest rate
- The term of the loan and the schedule of payments (including an amortization schedule of how much of the payments go to the principal and interest)
- Whether the property has liens or unpaid taxes
- Whether the purchaser will need to make a balloon payment at the end of the term
- Whether or not the loan has a penalty for paying off the loan early – called a prepayment penalty
- The time a purchaser is given for catching up on a late payment
- The party responsible for maintenance, insurance, and repairs
- A requirement for the seller to show proof of title and to record the agreement legally
After the agreement is signed, the purchaser will receive title or a general warranty deed for the land. This transaction protects the buyer, as it allows them to build up equity in the property. It also prevents the seller from taking out a loan against the property or selling the land to someone else. The buyer, by taking this measure, can also make improvements on the real estate.
Don’t Overlook the Warning of “Buyer Beware”
When negotiating a contract, make sure you are well aware of the monthly cost – an expense that includes taxes, interest, insurance, repairs and interest. Make sure the principal and interest are something you can afford after you include the costs.
Again, you’ll need to perform a title search to make sure someone other than the seller has a claim to the land – a claim that could threaten your owning the land.
Using an escrow service will also ensure that the deed is transferred to you, once you make all your payments. Escrow also protects the seller, ensuring the deed is returned if you fail to make your payments.
Author bio- Brandon Mickens has been involved with buying and selling land for the past 15 years and now wants to share his knowledge and experience with others.