How to Buy Land
Use the tips on this page to help in your land buying decisions.
The following is intended as a general guide to purchasing and enjoying land. It is not a comprehensive list of all relevant information and steps. There is no substitue for professional advice, doing your own due diligence and getting expert assistance from your tax, financial and legal counselors. For a list of items to consider, go to our Land Buyers Checklist.
Purchasing land is a fairly simple process but there are a number of important steps to insure that your purchase is all that you expect.
Here are the basic steps to purchasing land:
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Search. Locate the land you wish to own. You can find land for sale everywhere - you'll see signs, ads in the newspapers, on the internet and through REALTORS. With all the choices, making sure the land you're interested in will fit your needs is important. Use the resources right here at LandRadar.com or through other REALTORS. Once you've found the right property, it's time to secure the property for yourself. |
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Inspection and due diligence. Physically inspect the property you intend to purchase. Understand where the property corners are, the utilities that serve the property and what your access is to the property. Investigate that the soil is suitable for your use and understand any easements that affect the property. Consider whether you should have a survey of the property to get answers you need for your decision. |
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Secure. Purchasing land involves some paperwork. By law, purchasing land requires written contracts, called Purchase Agreements in Minnesota. Additionally, there are disclosures you'll want to see before signing the Purchase Agreement, including:
Financing your purchase may be through your own bank, savings and loan, credit union, land financing firm or, sometimes, the seller. Assure yourself that you have your initial down payment investment available and financing secured. |
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Closing. Closing the real estate transaction involves the final signing of documents, payment and disbursement of funds and recording of the documents at the county courthouse to effect your ownership. All transactions by LandRadar/Close~Converse are coordinated by Complete Title Services, Baxter MN, a First American Title company (the largest title company in the United States). At closing you'll receive, among others, these documents:
Your deed or the Contract for Deed/Purchase Money Mortgage or other loan mortgage will be recorded by Complete Title Services in the county where the land is located. Once the recording is complete, you'll receive the recorded documents from the courthouse with the recording information written on them. |
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Enjoy. Possession of your new property is usually granted at the time of closing. Now that the property is yours, enjoy the land, make it better, make memories with family or friends - have fun. If you're planning to build structures, get your building permits, secure a contractor and move forward with your plans. |
For additional tips:
1. Understand your expectations.
1. Understand your expectations.
People buy land for many reasons. By understanding your expectations for current use and future disposition, you'll make your search for the perfect property much easier.
What's your intended use? Homesite, hunting land, recreational use such as ATV or cross-country skiing, investment, development or some combination?
How much of a financial commitment will you make? Is this a cash purchase or do you plan to finance? Will you build on the property? If so, when?
If you plan to develop and sell smaller tracts, do you have experience developing? Do you have a team of land planners, surveyors, engineers, REALTOR, attorney, accountant and other professionals in place? Do you have the capacity - financial and personal to conduct the pursuit?
What's important to you and your family? Make a list of the important attributes the land should have and differentiate between the, "must haves" and the, "want to haves."
- Most people consider the following:
- Location: Should the property be in a city, suburban or remote? Close to health care or schools? Distance to work, shopping and recreation are all items to be considered.
- Condition: Some items to consider -
- Access. Public road, private road, maintenance agreements, easement for access
- Waterfront.
- Soil conditions.
- Water sources.
- Sewer or septic system.
- Topography.
- Trees and timber.
- Upland vs. wetlands.
- Easements.
- CCR's. Covenants, Conditions and Restrictions that regulate the use of the property or your neighbors' property.
- Neighboring uses.
- Environmental issues.
- Fire & law enforcement protection.
Prioritize your list of important attributes and realize that every tract of land is unique; it's unlikely you'll get everything you want and need in a tract of land at a bargain basement price.
There's an infinite number of ways to search for land but the process can be made simpler by sticking with your list of priorities.
Determine if your search will be, "active" or, "passive." If you're in active search mode, your tools may include:
- Drive through the areas of interest. Look for, "For Sale" signs, auction signs and indications (such as road building) that property may be available.
- Search the classified ads in local newspapers. Read local real estate magazines.
- If yours is a more regional or national search, check major publications like regional newspapers, the Wall Street Journal, USA Today, Farm & Ranch or other pubications.
- Search the internet. A Google search for, "Land for sale, Minnesota" will yield many results to consider. Tighter search terms will help narrow the focus of the results (i.e. Land for sale, Brainerd MN). Other sites, such as LandWatch.com are also beneficial.
- Review local REALTOR sites that have MLS search capacity. You can set criteria and review results.
- Plat books & county resources. If you're looking for large tracts, you may have success by buying a plat book of the county, look through it to identify parcels of the right size and location.
- Be sure to contact a real estate professional, describe your needs, capacities and timeline. You'll get accurate and timely information about land that suits your needs.
If you'd prefer a somewhat more passive search, consider these alternatives:
- Go to an internet site such as LandRadar.com, set your search parameters and get set up for automatic notifications. When any property comes on the market that meets your criteria, you'll be sent an email message.
- Get a guide. Contact a real estate professional who's deals in land, is familiar with the area and can keep an eye open for the property that best suits your needs and desires.
The level of investigation (due diligence) that's necessary will vary based on the location, proposed use of the property, condition of the property, zoning and restrictions. Use the Land Buyers Checklist as a start to due diligence.
Most importantly, consult your REALTOR, financial, tax and legal counselors for details on what due diligence will be prudent. Contact the local units of government regarding your intended use of the property and building code information.
Determine what level of due diligence is prudent prior to signing a Purchase Agreement and what should be done after a sale is agreed to by the Seller and Buyer. If there's due diligence after the Purchase Agreement, you Agreement should be contingent upon getting satisfactory answers to the due diligence items. Seek professional advice where needed.
Most states have standardized Purchase Agreements intended to protect the consumer and structure the transaction. These are designed to cover all aspects of the typical transaction. See Land Purchase Tools for more details.
In Minnesota, we use the standard Vacant Land Purchase Agreement that was created by the Minnesota Association of REALTORS and is updated regularly. If your purchase is straight-forward, this document will suffice for most transactions. Seek counsel from your attorney if you have any questions about the impact of any of the terms in the agreement.
Associated documents with the Purchase Agreement may include the following:
- Agency Relationships in Real Estate Transactions
- Vacant Land Disclosure
- Well Disclosure Statement
- Private Sewer System Disclosure
- Arbitration Disclosure and Agreement
- Meth Production Disclosure Statement
Your REALTOR can help structure your transaction, including any contingencies, complete the proper documents and present your offer to the Seller.
Before you purchase property, you may wish to consult with your financial, tax and legal counsel to determine how you should take title to the property. There are several choices, including:
- Individual or joint tenancy (typically you and your spouse) with rights of survivorship.
- Tenants in Common. Each party owns an undivided interest in the property.
- Trust.
- Other legal entity, such as Limited Liability Company or Partnership (LLC, LLP) or corporation.
Generally, it's a good idea to have your financing secured before submitting a Purchase Agreement. The right property for you just may be the right property for another prospective buyer, too. If a seller has to choose between offers, the cleanest (i.e. no contingencies, financing pre-arranged) offer may beat out an offer for a higher price with contingencies.
Closings are typically handled by a title company with vast experience in closing real estate transactions. You'll want to have a title opinion prepared by your attorney or the title insurance commitment reviewed by your attorney.
At your closing:
- You'll receive -
- A deed or Contract for Deed to transfer ownership to you,
- Closing Statement detailing the financial aspects of your transaction.
- Copies of all documents that you've signed.
- You'll provide -
- Cash for payment or Down Payment and closing costs.
- Financing for the balance of the purchase price
- The title company will handle recording of the deed and mortgage at the county courthouse.
It's yours! Possession is normally given at the time of closing. Check our our Land Enjoyment Tools to maximize your investment.
