Kody Hanner
Disclaimer: I was previously a licensed realtor in the state of Idaho. I no longer carry a license, and many states can vary on laws and financing. Please use this as informational only and confirm questions specific to your situation to your realtor, financial institution, or title company. My hope is that I can help you know which questions to ask and how to make informed decisions.
Ready to move to vacant land!
So many people are reevaluating the life they want for themselves and their families in today’s world. With the increased ability to work remotely or have one parent home with the kids, more families are optioning to live in rural areas. This also gives them the opportunity to embrace self-sufficiency. The war cry of the modern homestead movement.
The problem lies in deciding where to go, what type of property to buy, and how much work or money you have to put into your new home(stead).
Where to buy vacant land?
This is the pressing question on so many people’s minds. Many of the states and communities that we have lived our whole lives no longer align with the vision we have for ourselves and our families. However, before you decide where your dream location is, there are questions that you have to ask yourself.
Personal Questions
- Can I legally move? Many families are blended, and for custody reasons, some moves (especially out of state) are not an option.
- Do I have/need a support system? I am the first to say you can do it on your own, I have done it myself. I know it can be hard sometimes, but every time I have made that choice for myself, it has been worth it. But it is ok to make your choice to move on whether you have family, friends, a church, or child care in the new location. Those are very important factors!
Financial Questions
- Will you have a job?
- Are you planning to rent or buy?
- If you are buying, are you financing or paying cash?
Desires and Abilities
- Is your goal to start from scratch? Do you have the financial and physical resources to build your homestead? Do you have a place to live while you are starting from scratch?
- Are you interested in a fixer-upper? These are a lot of fun sometimes, and you can often live in them while you are remodeling. So that can save you money.
- Do you want a ready-to-move-in home (turn key)? There is no shame in wanting this, either. You can buy your chickens right away and be ready to hit the ground running. In fact, when financing a property through a bank, there are often rules about the condition of the home. But I will cover that later.
Lifestyle questions
- Does the location meet your political ideologies?
- Are the schools good, or are there friendly homeschool laws?
- Will you be able to have a homestead or homestead business?
- Is there a church that you align with locally?
Ready to shop!
Realtor or No Realtor
So many people fret over the decision to use a realtor. Honestly, I think for a buyer, it is a no-brainer. As a buyer, there is no cost to you, and if you are moving to a new area or state, you have someone on the ground working for you. They often have personal face-to-face relationships with the title company and possibly even your lender. Everything goes more smoothly when everyone is working together.
For selling your own home, the choice to use a realtor can have more layers. You would have to pay the realtor out of the sale of your home, affecting your bottom line. It is usually about 6% of the sale of your property, with half going to your agent and half going to the buyer’s agent. That being said, if you don’t use a realtor, you may still have a buyer that uses a realtor. In that case, you have to decide if you are willing to pay their realtor’s commission. That could mean losing a sale, and sometimes an agent will charge a little more to work with a For Sale By Owner because they end up essentially being a realtor for you as well when it comes to paperwork.
Financing Vacant Land
Many people are familiar with the options for buying a new home, such as conventional loans, USDA loans, FHA, loans, VA loans, etc. but buying raw land can be a whole other ball game.
Raw land is a little trickier to get loans. For the purchase of raw or vacant land, it is usually the easiest to pay cash. Many banks will not loan on vacant land because it is too risky, especially in the inflated market that we are currently in. The property is not comfortably liveable, so even those with the best of intentions may choose to walk away if finances get too tight. This makes the loan very risky for the bank if the market crashes; the land will not hold the same value that a home with all the amenities would.
What to look for when shopping for a new home or vacant land
When shopping for property, this list could go on forever. And honestly, much falls under the category of personal preference and personal finances. I want to cover some of the things that are often overlooked or taken for granted when moving to a new location. And more specifically, when moving from an urban or suburban area to a rural area, there are things that many never even consider because they are commonplace in more populated areas and not in the rest of the country.
Power
Yes, there are properties that do not have power. That will probably be disclosed long before you even look at the property. I am talking more about power options. Not all locations have city or county utilities. Power is provided by a privately owned company or a cooperative. These companies can have higher prices than the city would. Also, because they are privately owned, they may require deposits, credit checks, or other verifications to provide service.
If you are buying raw land, keep in mind that there isn’t just a place to plug in at the end of the driveway to add power. Sometimes power has to be brought in from the closest main road or even just from the next property down the road. But how far away is that? There is a price tag that comes with these things, and it is not small. Then you still have to get the power to your new home during construction, which is not included in that first price.
Water
Just like power, there may not be a water line nearby. This means that a well will need to be dug (even if the property has a spring, creek, or river, there may be the consideration of water rights). This usually requires a professional, well-digger service. Most locations do not allow wells to be less than 30 feet deep because that is considered “surface water” that could be contaminated. Depending on the area and type of material underground (clay, sand, rock), wells can be upwards of $100 per foot to dig. That adds up fast!
I hope this information doesn’t deter you from your adventure! It is so that you don’t excitedly buy something only to find out that you need to put another $50k into the property before you can even start building.
PERC Test
Before you can have a septic tank put on your property (this is for locations that do not have municipal sewer), a PERC test must be completed. This test is completed by a septic company and the county health department to confirm that the land can handle proper waste disbursement and that the septic will not contaminate any other water source. The cost to order this service can be a negotiable item on an offer to buy the land, however, your realtor can best advise on negotiating based on the current local market.
Ready to Buy!
The buying process can feel really complicated and overwhelming. There is a lot of hurry up and wait when buying a property. Everybody wants something from you immediately, and then you wait six weeks to even confirm that everything is going to go through. It is stressful!
Make sure that you have a clear understanding of the process so that you know what to expect each step of the way and hopefully be ahead of the game to save yourself a lot of stress.
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