If a person is ready to make their dream of owning a land and house a reality, they can start their journey with this road map. According to a survey conducted by the National Association of Realtors, the sale of a lot in the country increased by six percent before the pandemic, and for a good reason.
Undeveloped lot is still considered one of the country’s most affordable real estate types, making it a financially accessible option for first-time buyers. The bad news is purchasing land can be an overwhelming and intimidating endeavor. This article will take a closer look at some steps people need to take when purchasing property so they can do it with confidence and clarity.
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Finding lands for sale
Some of the best ways to find purchasable land include:
Real estate websites
According to experts, most individuals start their lot search by checking out online real estate sites. Websites like Zillow, Trulia, RedFin, and Realtor have listings for these lands throughout the United States, and some of these sites specialize in vacant and available land listings. These websites mostly include selective listings from MLS or Multiple Listing Services.
This site provides easy access to licensed real estate firms and agents but may also include FSBO or For Sale by Owner listings. For Multiple Listing Service listings, contacts will usually be agents representing sellers. These agents are ethically obligated and financially incentivized to represent their client’s interests. Consequently, buyers usually recommend hiring a reputable agent to represent them.
Real estate (RE) agents
These professionals can be an invaluable resource when it comes to finding properties for sale. These experts have access to MLS listings and properties not listed on the MLS website through their deep network of professionals like contractors and developers. While most RE agents can facilitate purchases, the best professionals in this industry are those whose specialties are raw lands.
Experts recommend working with firms or agents with tons of lot sales history or experience in geology, forestry, and soil science. Experts also suggest hiring an agent with the ALC or Accredited Land Consultant designation through the RLI or Realtors Land Institute if individuals can find one in their area. These professionals are trained to help individuals through the needed due diligence steps and legal procedures when it comes to lot purchases.
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Some For Sale by Owner properties can be found in different classified advertisements in local newspapers, magazines, or online directories such as Facebook Marketplace or Craigslist. According to professionals, they usually mail neighborhoods with buildable and cheap lots and find out that the owners are happy to part with their lots of huge discounts.
Experts suggest finding owners’ contact information on GIS or Geographic Info System map of the area’s County Assessor’s Office online site. They also advise checking any county tax deed auctions where properties are auctioned off at discount prices when owners fail to pay their property taxes.
Factors people need to consider when looking for a “For Sale” land
Certain elements can determine whether the property will satisfy a person’s needs and influence the expense and difficulty of developing it. As individuals look for land, they need to keep these considerations in mind.
Individuals may need to install walls or other water systems if the municipal water supply is not readily available on the property. Trucking in water is another option that can be inconvenient and costly.
If the sewer system is not available, septic tanks will need to be installed before construction is done.
If one is not ready there, utility firms in the area will need to run electric lines to building sites. Another option is to install solar-generated systems.
People need to investigate whether an Internet connection or cellular coverage is available in the area. They may need to switch cellular service providers or use fiber-optic cables going to the building site.
Access to roads
Some remote houses lack access to good roads. If no private or public roads are going to the property, people may need to create one. It is usually pretty costly. It will involve hiring excavation contractors and possibly arborists or logging firms to remove big trees. Professionals suggest that people apply for right-of-way easements to get usage rights to neighboring properties if lots are landlocked by adjoining parcels.
Getting financing for a vacant land for sale is usually trickier compared to develop ones. According to buyers, most lending firms view undeveloped lands as riskier investments and are more likely to offer different financing when individuals have immediate plans to build a house.
When that is the case, people should expect to pay fifteen to twenty-five percent for down payments (DP) or up to fifty percent down payments without building plans. Listed below are some options when it comes to financing land purchases.
Construction-to-permanent or CP loans
It is also called combined construction loans. This loan allows buyers to finance lot purchases and house constructions simultaneously. It is considered the most common financing option since it usually needs a smaller DP and has lower interest rates offered by most lending firms.
This thing will allow individuals to finance lot purchases without immediate plans to build a house on the property. According to reputable professionals, lot loans are not offered by most lending firms, which see these things as riskier compared to construction loans. These things also need larger DP and come with more expensive interest rates.