Buying Land In The US : a 5 -Step Process

by Home Nation  • Published August 25th, 2024

Buying land in the US is a big step toward making your dreams come true. But, it can seem really hard if you don't know where to start. This guide will help you understand the process in five simple steps so you can buy land with confidence.

Key Takeaways

• Start by finding land for sale through websites, real estate agents, and local resources.

• Consider important factors like access to utilities and roads before buying.

• Understand any zoning rules and restrictions that might affect what you can do with the land.

• Explore different financing options to find the best way to pay for your land.

• Make a smart offer and do your homework to make sure the land is right for you.

1. Find Land for Sale

Finding the right piece of land is the first step in your journey to land ownership. Here are some effective ways to locate land for sale:

Real Estate Websites: Begin your search by exploring online real estate platforms. Sites such as Zillow, Trulia, RedFin, and Realtor.com feature listings of land for sale nationwide. For more targeted searches, consider using specialized websites like LandWatch, Land.com, LandSearch, LandHub, and LandAndFarm. These sites offer extensive listings, allowing you to browse millions of acres available for purchase or lease, ranging from small vacant lots and rural properties to large tracts of land and buildable plots.

Real Estate Agents: Real estate agents can be invaluable in your land search. They have access to every listing on the Multiple Listing Service (MLS) and can also find properties not listed on the MLS through their network. It's often recommended to hire a buyer’s agent to represent your interests. Look for agents with experience in land sales or those with the Accredited Land Consultant (ALC) designation.

Local Resources: Don't overlook local resources. Check classified ads in local newspapers or online directories like Craigslist and Facebook Marketplace. You can also contact landowners directly. Use the Geographic Information Systems (GIS) map from the County Assessor’s Office website to find contact information. Additionally, county tax deed auctions can be a great place to find land at a discount.

By using these methods, you can find the perfect piece of land that meets your needs and budget.

2. Consider Factors When Looking for Land

When you're looking for land, there are several important factors to keep in mind. These considerations can help you determine if a piece of land meets your needs and how challenging or costly it might be to develop it.

Utility Access

One of the first things to check is whether the land has access to essential utilities:

• Water: If municipal water is unavailable, you may need to set up a well or an alternative off-grid water system. Another possibility is having water delivered by truck, although this can be costly and less convenient.

• Sewer: Without a municipal sewer connection, you'll need to install a septic tank before any construction can begin.

• Electricity: If there's no existing electric line, the local utility company will need to run one to your building site. Alternatively, you could install a solar-generated system.

• Internet Service: Check if cellular coverage and internet connection are available. You might need to switch providers or run a fiber-optic cable to the site.

Related: What to Know About Double Wide Homes

Road Access

Certain remote properties do not have direct road access. In cases where there is no existing public or private road leading to the land, constructing one might be necessary. This can be expensive and could require the services of an excavation contractor and potentially an arborist or logging company to clear trees. Additionally, if the property is landlocked, you may need to secure a right-of-way easement to traverse neighboring lands.

Zoning and Restrictions

Before buying, check the zoning rules for the land. All land is zoned for specific uses like residential, commercial, or agricultural. These rules will determine what you can and can't build. Contact the local planning or zoning commission to understand these restrictions. Also, look into any environmental restrictions or hazards like flooding or fires that could impact your plans.

Soil Quality and Topography

The quality of the soil and the land's topography can affect your building plans. Poor soil quality might require additional work to make the land suitable for construction. Similarly, steep slopes or uneven terrain can complicate building and increase costs.

Proximity to Amenities

Consider how close the land is to essential amenities like schools, hospitals, and shopping centers. Proximity to these amenities can make the land more desirable and convenient for daily living.

Future Development Plans

Research any future development plans in the area. New roads, schools, or commercial developments can increase the value of the land. However, they can also bring more traffic and noise, which might not be desirable.

By keeping these factors in mind, you can make a more informed decision when buying land. Make sure to explore all your options and do thorough research to ensure the land meets your needs and expectations.

3. Understand Restrictions When Buying Land

Before you buy land, it's crucial to understand any restrictions that may apply. These restrictions can come from various sources, including local zoning laws, environmental regulations, and deed restrictions. Zoning laws determine how the land can be used, whether for residential, commercial, or agricultural purposes. You should check with the local zoning office to see what is allowed on the property.

Deed restrictions are another important factor. These are rules set by previous owners or developers that limit what you can do with the land. For example, a deed restriction might prevent you from building a second home or running a business on the property. If you're buying a rural property, check for deed restrictions to avoid any surprises later.

Environmental regulations can also impact your plans. These rules are designed to protect natural resources and may limit where you can build or what you can do on the land. For instance, there might be restrictions on building near wetlands or other sensitive areas.

Check for Homeowners Association (HOA) Rules

If the land is part of a community with a Homeowners Association (HOA), there will likely be additional rules to follow. HOAs often have covenants, conditions, and restrictions (CC&Rs) that dictate everything from the types of structures you can build to the color you can paint your house. Make sure to review these rules carefully before making a purchase.

Perform a Title Search

A title search is essential to uncover any hidden restrictions or issues with the land. This search will reveal any liens, easements, or other encumbrances that could affect your ownership. It's a good idea to hire a professional to conduct this search to ensure there are no surprises.

Understanding these restrictions will help you make an informed decision and avoid potential problems down the road. Always do your homework and consult with professionals to ensure you're fully aware of any limitations on the land you're considering.

4. Explore Financing Options for Land

When buying land, exploring financing options is crucial. Obtaining financing for vacant land is often trickier than developed properties. Here are some common financing options to consider:

1. Construction-to-Permanent (CP) Loan: This loan allows you to finance both the land purchase and home construction simultaneously. It often requires a smaller down payment and has a lower interest rate. However, you will need to hire a licensed contractor and have building plans ready before applying.

2. Lot Loan: If you don't have immediate plans to build, a lot loan might be suitable. These loans are considered riskier by lenders, so they come with higher interest rates and larger down payments.

3. Owner Financing: In some cases, the seller may offer to finance the purchase directly. This can be beneficial as the down payment might be lower, but the interest rates are usually higher.

4. Personal Loan: When purchasing land, considering a personal loan might be beneficial. It offers certain advantages that other land loan types may not provide.

If you're planning to build a primary residence in a rural area, the U.S. Department of Agriculture (USDA) has two loan options to consider: Section 523 loans and Section 524 loans.

Remember, your financial situation, the land’s size, and location will influence the best financing option for you. Always compare different loans and consult with a financial advisor to make an informed decision.

Related: Cost Breakdown To Put a Mobile Home On Land

5. Submit an Offer and Perform Due Diligence

Once you've found the perfect piece of land, it's time to submit a written offer to the seller. If you're working with a real estate agent, they will handle the paperwork, including the Bid Offer form. If you're not using an agent, consider consulting a real estate attorney to help draft the necessary documents and establish contractual terms.

Due diligence is a crucial step in the land-buying process. This period, typically between 30 and 90 days, allows you to investigate the property's history, ownership, and condition. Here are some key tasks to complete during due diligence:

• Title Search: Ensure the seller can legally transfer the property to you without any issues. This search will reveal any liens, easements, or other potential problems.

• Environmental Search: Check for any environmental concerns that could affect your plans for the land.

• Appraisal: An appraisal may be necessary to confirm the property's value.

• Contingencies: Remove any contingencies from the offer once all checks are satisfactory.

During this period, you might also need to review any existing agreements, such as leases, and confirm the status of any public debt used to finance improvements on the property.

After completing due diligence, you will proceed to finalize the purchase. This involves signing the final closing documents and transferring funds to escrow. Once the deed is notarized and returned, the property is officially yours. If there is a Homeowners Association (HOA), the title company will check the status of any required fees and include them in the settlement.

By following these steps, you can confidently navigate the land-buying process and secure your ideal property.

If you're considering purchasing land in the US, our comprehensive guide can simplify the process for you. Discover everything you need to know about finding the right property, understanding zoning regulations, and securing financing. Explore more resources and get expert advice on your land-buying journey. Take the first step towards owning your dream property today!

Conclusion

Buying land in the US can seem like a big task, but breaking it down into steps makes it easier. From finding the right piece of land to understanding financing options, each step is important. Remember to do your research, ask questions, and seek help from professionals when needed. This way, you can make informed decisions and feel confident in your purchase. Happy land hunting!