Buying Land? Things to Know

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In the process of finding and buying our land, there were some huge hurdles that we had to cross. Some of them were fairly common issues with all land purchases, and some of them were unique to our piece of property. I’ve listed some of the most important things to look at and investigate before making an offer and during your due diligence period after you’re in contract. It’s SUPER important to find out the answers to these things before you’re committed to the property. It’d be a giant blow to the heart to purchase land you love only to find out afterwards that utility hookups will blow your budget or the road frontage of your property isn’t enough to allow for a building.

RESTRICTIONS

This is a biggy if you’re planning on having animals or putting up outbuildings. Check in with the county or township zoning office for ordinances regarding animals and restrictions about any building you may want to do on the property. The town our land was in only has about 400 people, so I called the zoning guy for the Township (yep, it’s just one guy!). I’ve emailed him at least a dozen times with questions regarding animals and building. If you’re building a house from scratch, make sure to find out what the required road frontage is and make sure it’s possible on your plot of land. Zoning Tom, as he’s known in our house, was also able to give me the size requirements for any house we build. In fact, it’s such a small world that during our email exchanges he purchased a used vehicle and the previous owner just happened to be my mother in law! He even found her lost earring when he was cleaning it out! Crazy right?!

UTILITIES

If you’re looking at raw land, you’ll need to find out what kind of utilities are available to you. Can you get city water or will you need a well? Can you tap into the gas lines or will you need to rely on a different heat source? For us, we have to cross a 20′ wide creek to get to the area of our property we want to build, so public gas and water are a no go. We moved on to obtaining quotes from some local businesses on the cost of drilling a well and installing propane for heat. In order to find out if we could put in a septic system, we had to have a company come out and do a perc test. It basically tests the drainage ability of our soil and tells us what type of system we would need for the size of the house we’d want. If it came back negative and we couldn’t have a septic system, we wouldn’t want this property. It’s something we didn’t do before we were in contract, but we did make the offer contingent upon the test coming back positive for our home. We also had to make an appointment with the electric company to go over our options. We could either put up utility poles running all the way down the property, or we could get in touch with the Cemetery Association that owned the plot next door and see if we could tap off their poles that were already on the other side of the creek. Using the Cemetery’s pole, however, would mean we need to get a legal easement. We’d also be responsible for cutting the trees and maintaining the branches so they don’t interfere with the lines. The electric company would also require an easement from us to house poles on our property in either scenario. It was a lot, honestly. It was very overwhelming, but if we hadn’t done the research in advance of purchasing the property, the cost of putting poles up from the street to our home if the Cemetery denied our easement could have been a complete budget buster.

FLOOD PLAINS

Flood plains are a big deal. Not only do the building requirements for your home change if you’re inside of one, but your insurance rates can raise astronomically. We looked at the flood plain map of our property and discovered that it’s littered with flood plains that are listed as zone A, which means they are just estimates based off topographical data and not classified. There is a large 5 acre area that is outside the flood plain where we want to build the house, and another on the front of the property where we had discussed having my mother build a home when she retires. We asked the realtor about the flood plains and he advised us that the seller was completely shocked when he looked at the map, saying the area hasn’t flooded in the entire time he’s owned it. While I’m sure it’s true, their word means diddly to an insurance agent! I brought several engineers out to the property to get estimates on a bridge across the creek and to see what it would cost to evaluate and determine the flood plain of the land. We had a dollar amount in mind for what we would pay for a bridge, but if it went over we decided we would not purchase the land. I didn’t want to spend half the cost of our house on a bridge. We ended up making that part work, and one engineer had told me that a little ways down the creek the flood plain was zone AE and the 100 year flood plain mark was 7 inches in 24 hours. It was nice to know. We actually ended up getting our 100 year flood the week we purchased the property! It rained roughly 9 inches in 24 hours and 15 inches over the course of 3 days. Of course, right?! The creek filled up to the bottom of a nearby bridge, and there were a few nice big puddles in low spots on the property. Besides that, it wasn’t bad at all, which ended up making us feel more comfortable. It’s definitely important to know beforehand though. Flood plain maps are available on the FEMA website, and in our case, we were able to access them via the county website.

TAXES

Something I hadn’t thought of when we originally started looking at land was taxes. We had found a plot of land that we were just beginning to do the legwork on when my mom asked about the taxes on it. DUH! I was so caught up in the dream of having my land and getting to start my homestead that I completely forgot about one of the hard facts of owning property. In fact, the taxes were one of the major reasons we backed off that piece of land. They were just too high in that area. The website I had found our piece of land actually listed to the tax info on their lists. I believe it was automatically done off the county website in some way, because when I had pulled up the listing it said the taxes were about 3x what I was expecting for the area. Luckily, with some research, I realized it was showing the tax info for a neighboring piece of property. But holy moly, did I have a tiny internal meltdown for a second there! When looking at the taxes on the county auditor website, I saw they were in CAUV status. CAUV stands for Current Agricultural Use Value. Essentially, if a certain percentage of the land is devoted to commercial farm use I can have the value of the land reduced by a large amount, making my property taxes lower. It’s more of an incentive for large property farmers to keep from paying more in taxes than it’d be worth to produce. I called the auditor and got the amount the taxes would be if we took the property out of CAUV, what the process was, and asked a few questions to see if I could get away with getting the CAUV tax break if I sold eggs from chickens on the farm. This is definitely a maker or breaker thing to look at. It’s a little more tricky, in my opinion, if you’re buying land that is being farmed regardless if there is a home already on it. Make sure you find out if taxes are reduced and what your taxes would be for what you want to do on the property.

EASEMENT/RIGHT OF WAY

A title search should come back with any access issues you might have with the property, but it’s always a good idea to double-check and make sure there are no outstanding easements or right of way grants on the property. In our particular case, we have an easement to use the entrance road to the adjacent cemetery to access the back half of our land. It was a sore spot that we argued with the Cemetery about for a while, but sure enough, it was written right into the deed. When the owner’s grandfather in 1920 or so sold off a piece of his property to the Cemetery he made sure to include it. It was just so old and the property had been in the family so long it was never really brought up until we were buying it and needed to know. A common type of easement is a utility easement or a right of way for an adjoining piece of property.

MINERAL RIGHTS

Something I’d never even thought of, or knew was possible, when I started looking at land was the ability to sell just minerals of the property. You’ll want to make sure that your property comes with all the mineral rights. Ours did have an expired gas lease from 1930 with a company that is no longer in existence for the gas rights on the property. You’ll want to make sure you aren’t purchasing a property and in 5 years down the road someone charges in and starts digging up your ground for minerals they were sold 10 years ago. While a title search should also come back with any sold off rights, you can also do this yourself at your county clerks office and digging through the chain of title. You could also pay to have a full abstract done, but they’re expensive.

Each piece of land is going to be unique in what you need and what you should be verifying before you commit to buying it. You may find a piece of property that has already done a perc test and been approved for the house size you want. Or you may be buying property that already has a home/utilities on it, but you’ll still want to check for easements and restrictions. The bottom line is, you can never do too much research. It’s going to be frustrating and overwhelming sometimes. It sucks, if I’m putting it bluntly. But, when you’re annoyed and feel like saying “screw it” and just giving up, remember why you’re doing it in the first place. I had to remember that I’d never get to build my dream house and drink coffee on my porch watching chickens chase bugs if I didn’t power through. Just take it one step at a time. Make a list and focus on each task. You got this!

Until next time!

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