When it comes to buying land, many people I help are often first-time land buyers, and I hear the same thing from most of these buyers: “We have bought a house before, but don’t know where to start when it comes to buying raw land.” 

If you are considering buying land now or in the future, I hope this is helpful to you!

Step 1: Partnering With a Land Broker

The first step of buying land is to partner with a local land broker. This land broker will help you throughout the buying process and look out for your best interests when it comes to picking the right property, getting you in contact with the right professionals, and helping you negotiate the purchase to get you the best price and terms possible.

In most cases, your agent will be paid by the listing broker or seller, making it free for you to have this representation.

Step 2: Making a Budget/Getting Pre-approved

When it comes to buying land, there are two common routes to purchasing: paying cash if you have the ability, or getting financing through a land lender. Regardless of which route you plan to use, setting a budget and understanding what you can comfortably afford is very important to establish early. 

This will help you avoid wasting time looking at properties that are out of your budget and give you an advantage when you are able to show sellers that you are pre-approved. One thing to keep in mind is that land lenders generally require a higher down payment than lenders for homes; land loans typically require a 15–20% down payment.

Step 3: Finding the Right Property

Once you have established a budget, your land agent will take into consideration your property needs and find several properties that may work for you. These needs will vary depending on your intended use for the property. For example, a property for building a home will differ from a property you wish to use for hunting or recreational purposes. A land broker will be able to schedule showings for you, help you tour these properties, and identify any benefits and drawbacks of each property.

Step 4: Making an Offer

Once you find the property that is perfect for you and your family, your agent can help you determine what that property is worth by finding comparable sales and assessing the current market. Your agent will help you negotiate a price that you and the seller agree on and ensure all the proper contracts and documents are signed.

Step 5: Due Diligence

In many cases, a buyer will have a due diligence period before purchasing property. This period of time allows the buyer to do a deep dive on the property and make sure there are no hidden red flags. What you’ll want to investigate during due diligence will depend on your future plans for the property. 

For example, if you are looking to build a house, you may want to have a perc test completed, ensure the ability to get electricity and water, and confirm that the land is suitable for building. Your agent can help you through this process and ensure there are no unknowns by the end of your due diligence period.

Step 6: Closing

Once you have completed your due diligence and feel confident that the land will fit all your specific needs, it will be time to prepare for closing. Closings will either take place with a closing attorney or a title company, depending on your state or area. The closing attorney/title company will perform a title search to ensure the seller is the sole owner and has a clear title to the property. 

They will also prorate the taxes so that you only pay property taxes for the portion of the year you will own the property. Once they calculate the closing fees, they will provide you with the amount to pay at closing. After these funds are paid and you sign all closing documents, the closing attorney/title company will work with the county to transfer ownership to you.

Step 7: Enjoy the Freedom of Landownership

Owning land is one of the most fulfilling things you can buy. Your piece of land is a place where you can build your family’s legacy, gather with friends, plant a garden, hunt, or just enjoy nature on your very own piece of dirt. Buying land may be more feasible than you think, and although it may seem like a daunting process, land brokers help buyers just like you achieve the dream of land ownership every day. If you are thinking of buying land, give me or your local Land Professional a call today. 

As they say, “They aren’t making any more of it.”