If you have never bought land before, may look like a scary undertaking.  It is not.  The process is simple and straight-forward, with lots of protection for you to assure that you spend your money wisely.  The following pages describe all the steps in the process for the novice.

1.  Define your requirements.

Your requirements follow from the picture in your mind of what you will be doing on and with the lot, once you own it.  You need to make a complete list of these requirements:

• Your intended use(s) of the lot --  Residential building site? Gentleman's farm?  Recreational?  Business site for repair of lawnmowers?  Vacation hide-away?
• "Zoning".  These are the officially approved uses for the area. Your intended use of the land has to match with the local approved plans for the area (or, be close enough to the approved uses that you can get a "zoning variance" from the local  government.)
• What neighborhood would you like for your site?  Downtown with lots of passerby traffic?  Good schooling for your family?  "Away from everything – but within 20 minutes from banking and shopping".  "Within a rural community where my kids can bike to school, and live near kids their age."
• Accessibility:  Close to shopping?  Close to major traffic roads?
• Land physical characteristics (wooded, water frontage, hillside views, farming field…)
• Public services available:  water, sewer, natural gas, electric, phone, cable TV, Internet fiber-optic access.  A private well and private septic field will, up front, add to your building cost and will in the long run reduce annual operating costs.
• What price range do you want to spend?  How many acres?

 

Separate these requirements in two groups:  Absolutely necessary" and "Nice-to-have".

If you plan to build a house from where your kids will go to school, you are well advised to first pick a schooling district where your kids will get the kind of educational setting and opportunities that you like.  You do this by talking to parents, visiting the schools and talk to teachers and administrators, sit in on some classes, visit the cafeteria when the kids are there, visit the sporting events, etc.  Your selected school district(s) will then become an "absolute necessary" requirement for the location of your plot of land. 

2.  First-round search for your right plot of land:

Find promising plots of land…..

Your sources for this are:

• Our web site, and other web-based listings that you find via web search engines.
• Local real estate agents.  Realtors in many communities "multiple list" their properties, meaning that one realtor can provide you with information about the other "multiple-listed" properties as well.  But this covers only part of the properties sold via realtors: you would be best to call more realtors and ask them also about the properties that are not on the multiple listing.
• Signs along the road for "for-sale-by-owner" properties.
• Cold calls to owners of undeveloped land that you see and like.  (Your local tax assessment office can give you the name and address of the owner of record.)

 

Try to keep this first-round search quite wide and open: the features that are important to you may be there, even though they are not listed.  A seller may look at his/her property different than you would.  A farmer may look at his wooded hillside as a useless plot of land where the deer hide after stealing his corn. To you it may be just the right peaceful plot of wooded seclusion for say your Internet consulting business.

….and collect all the necessary information on these lots:

For all these properties you will need to collect information.  The requirements that you listed at the beginning now forms a list of questions you need to ask for these properties.  is the forms the basis for a list of information that you need to collect with all the   :  the categories of information listed on our individual lot pages is a good first list of the information you would want to ask for.

For your eLand table of selected properties, the required information is most likely listed on the information table and the lot pages.  You may have to complement this with calls to the zoning officer.  The officer has can answer questions such as: "Is my intended use of the land permitted under its current zoning?"  "If not, how hard is it to get a zoning variance for what I'm planning to do?"  "Are there plans to extend public water and sewer to this area?"  "Is this road snow-plowed during wintertime?". 

For your other potential sites you also need to contact the local tax assessment office and the County Clerk's office, and ask lots of questions to the owner or real estate agent. 

Resist the temptation to take tours of some of the lots:  you should first make a list of all the properties that meet your objective requirements, from behind your desk.  You should reserve the "falling in love" portion of your land search for later, once you focus on only those properties that meet your the objective criteria.

3.  Select your top choices: your "Choice Lots".

These are the ones that meet and exceed all your "must have" requirements, and give you a fuzzy feeling as to their "nice to have" features as well.  For your eLand properties, this process of comparing and selecting can be done right on the screen.  For the other properties, you can ease the process by making a similar table on a sheet of paper.

4.  Visit your Choice Lots; collect more information on these.

These are the properties that you need to spend more time on.  You need to visit these and walk around on them; talk to neighbors, see in person how it meets all the requirements that you have set.

5.  Zero in on your top choice, list the conditions that would make this lot a good buy for you.

Now you have reached the point where you can say:  "If everything falls in place like I hope it will, then I would like to buy this plot of land."  There is room for a lot of "if's" at this point:  you are still defining what you want, but now with the extra knowledge of what's available to meet your needs.  These requirements will enter into your purchase offer as "contingencies".  A contingency is a  necessary condition that would make thi you have Negotiating a price

6.  Draw up a Purchase Offer (P.O.)

The PO is a legal document that spells out exactly what it would take to sway you to buy the property.  A good PO is very safe document:  it protects you from having to buy a property that  you do not want.  It is also a very effective way to move the purchase process along:  the PO focuses on closing the deal efficiently if it is right for both parties. 

 At this point is becomes important to get a real estate lawyer involved.  In the end you want to own your property free and clear, and be able utilize it exactly in the way envisioned.  Your lawyer will help you to avoid surprises, such as an old Indian land claim against the property that may still come and haunt you, or a right-of-way to cross your property exactly where you plan to build your house.  (The right-of-way may well give the holder the right to drive his bulldozer through your living room.)

 If you do not already have a lawyer, you could ask friends for a recommendation or use the local yellow pages under "Lawyers".  In you contact a larger firm, you should ask for a lawyer who specializes in real estate closings.  It is common practice to ask for a quotation. Your lawyer will use a boiler-plate form for the initial PO, and many firms will charge less than $100 for just the writing of the PO.  If the deal materializes into a full closing, lawyers' fees for a simple closing will often stay well below $1,000. You should also ask whether this firm can represent you without conflict of interest:  the selling party will also have a lawyer, and it is better if they are independent of each other.

If the property is listed with a realtor, the realtor will offer to draw a purchase offer for you, at no cost to you.  If it is a well known, reputable realtor, this is low risk as well:  Realtors can get into serious trouble if they try to cheat you into the wrong deal.  Nevertheless, it is good to keep in mind that the realtor represents not your interests but those of the seller.  You may well tell your lawyer that you would like to save some up-front money by using the realtor's PO and ask whether their PO is adequate.

Key to writing a good PO is, to describe all your purchase contingencies properly.  They need to be worded such that you don't have to buy the property if it does not meet all your requirements. These contingencies will include a deadline.  For instance, if the owner agrees to get subdivision approval from the local authorities, allowing him to split your parcel off a larger tax property, it will state that he will get this permission by a certain date or the purchase offer will become null and void.  As another example, if you want to assure that the property will supply you with good drinking water from a well that is not yet drilled, you may want your PO to give you the right to enter the property for the purpose of drilling a well at your expense.  This contingency would for instance spell out the following.  If your first drilling locates potable water at a rate over 15 gallons/min at a depth not to exceed 200 feet this contingency will be satisfied and your PO will remain in force.  If your first drilling does not locate water meeting these requirements, you have the right to cancel the PO.  If you get lax and do not do your test drilling before a certain deadline, then the contingency will be automatically removed from the PO and you may not cancel the deal because of questions of the water.

If for any reason you feel (before the deadline of the contingency) that the deal will stretch your financial resources too much.  Many PO's will include some form of financial contingency.  It may be owner financing at a certain rate, personal financing from others entering the deal, bank financing for the construction you plan to erect on the property.  You need to decide up front what will make this deal acceptable and successful for you.

7.  Negotiating the Deal.

If the seller uses a realtor,  this person will shuttle back and forth between you and the seller to negotiate agreement on the transaction.  If the property is "for sale by owner", you will deal directly with the owner.

The negotiations will focus, both on the price and on the terms and contingencies.  If the seller has many other options to sell the property before the proposed deadline of the contingencies, you may have to sweeten the deal by making part of your down payment non-refundable in case any of your contingencies make you pull out of the deal.  After all, the seller is taking the property off the market for you during the contingency period.  But, real estate generally sells slow, and more often than not you will be given reasonable time to work on meeting your contingencies without a financial penalty on you, should the deal fall through. 

The PO will become a legally binding contract once both parties have signed it. Both the seller and the buyer will receive a copy of the contract with original signatures.

8.  "Removing" the Contingencies.

Next, buyer (or buyer's agent) and seller will get busy to meet all the conditions of the contingencies.  No new legal document is required to document that a certain contingency is met, and removed as an obstacle for closing the deal.  It is common practice to write the word "removed" in the margin of the original PO, next to a contingency.

9.  The closing

Once all contingencies are removed, both parties will instruct their lawyers to prepare for "closing", that is, the transfer of title to the property to the new owner.  Along with the price for the property (or the papers for a loan for the money). A number of other bills will need to be paid during closing:  taxes, commissions to agents, lawyers' fees, fees to update the "title search"  (a document describing the history of ownership of the property, all right-of-ways granted over the property, and all its past financial obligations of record).  It is a 2-hour process, after which you will be the new owner!