How to Buy Land from Land Stewardship
1. Determine Your Budget and Financing
Budget: Factor in the cost of the land, closing costs, taxes, potential development expenses (e.g., clearing, utilities), and future property taxes.
Financing Options: If you are not paying in cash, consult lenders. Land loans often have higher interest rates and stricter requirements than home loans. You might explore options like raw land loans, unimproved land loans, owner financing or home equity lines of credit.
2. Research the Land
Zoning: Check with the local planning department to confirm how the land can legally be used.
Easements: Look for rights granted to others to use the property (e.g., a utility company running power lines).
Location: Evaluate proximity to schools, stores, healthcare, and infrastructure if relevant.
Environmental Considerations: Confirm if the land is in a floodplain or environmentally protected area.
3. Visit the Land
In-Person Inspection: Check for accessibility (e.g., road access), terrain, vegetation, and any visible issues (e.g., erosion).
Neighbors: Talk to nearby property owners to gain insights about the area.
4. Conduct a Land Survey
Why It's Important: The survey establishes exact boundaries, ensuring no disputes with neighbors. It can also identify any encroachments (e.g., a neighbor's fence crossing into the property).
Who to Hire: Use a licensed surveyor with local expertise. Request a detailed survey map.
5. Review the Title and Deed
Title Search: A title company or attorney will verify the seller's ownership and check for encumbrances, liens, or disputes.
Deed Types: A warranty deed provides full protection against title defects, while a quitclaim deed offers less security. Ensure you understand the type provided.
6. Negotiate the Price and Terms
Factors to Consider: Compare the price to other land sales in the area. Consider improvements (e.g., access roads, fencing) when negotiating.
Additional Terms: Include contingencies such as inspections, financing approval, or clearing title issues.
7. Draft a Purchase Agreement
Key Details to Include:
Purchase price and payment terms.
Legal property description (from the survey or deed).
Contingencies (e.g., obtaining permits, satisfactory inspections).
Closing date and conditions for cancellation.
Professionals Involved: Have a lawyer or real estate agent draft or review the agreement.
8. Perform Due Diligence
Inspections: Test soil for building suitability, environmental concerns, or contamination.
Utilities: Confirm availability and cost to connect to water, electricity, gas, or sewage systems.
Permits and Codes: Verify whether the property supports your intended use (e.g., permits for building a home, farming, or other activities).
HOA/Community Rules: If applicable, check for rules or fees set by homeowner or property owners' associations.
9. Secure Financing (If Needed)
Loan Options: Work with lenders specializing in land loans. Provide detailed plans for the land to reassure lenders.
Down Payment: Expect higher down payments for land loans, often 20–50% of the purchase price.
10. Close the Sale
Closing Documents: Prepare to sign the deed, purchase agreement, loan paperwork, and disclosure forms.
Escrow Agent/Title Company: Use these professionals to facilitate the transfer of funds and ensure legal requirements are met.
Payment: Pay the agreed-upon price (or loan funds are disbursed).
11. Take Possession
Deed Recording: The deed must be recorded at the county clerk’s office to finalize the transfer of ownership.
Future Plans: Start planning for development, resale, or other intended uses. Secure the property with fencing or signage if necessary.