Top 6 Mistakes to Avoid When Buying Land

Mistakes to Avoid When Buying Land

When we talk about buying land and what goes into it, we usually talk about what you should do when purchasing land.

There is a lot of thought and steps when it comes to purchasing land. The process can be overwhelming, but it is also exciting. If you are getting serious about buying land, then we are here to help you learn what NOT to do.

Most of the time, we talk about what you should look out for or certain steps to take when you are in the process of buying land. Now it is time to discuss some mistakes you should avoid. Mistakes are not just made by beginners, many people experienced in buying land make mistakes too!

Let’s go over some of the things you should avoid if you are in the process of buying land.

Mistake #1: Not Researching and Learning about the Right Type of Funding

One of the first things people think of when they are in the market to buy land is money.

– Do I have enough for a down payment?

– Can I afford this piece of property in the long run?

– Do I need a loan?

These are all common questions we ask ourselves before we make a big purchase. If you have great credit, you might have the opportunity to receive a loan from a bank or credit union.

This is not your only option though; you should talk with experienced land buyers about how they came to purchase their property as well. You may be able to partner with someone you trust to make it less of a down payment.

Another great thing that many sellers offer is financing. There may be a program that allows you to pay installments over a period until you have paid off the land entirely and then it is yours. At Discount Lots, you have the option to purchase the land either outright or take advantage of our innovative rent-to-own program.

Our program allows you to own the property at the end of your payment plan agreement.

Receiving a loan, going in with a partner, and seller financing are all great options for you to think about when you are purchasing land. Keep in mind that you do not always have to rely on a bank and a loan. There may be a better option for you!

Mistake #2: Accepting High Interest Rates

If you do decide that a loan is the best option for you, then make sure you do not overpay when it comes to interest rates. Sometimes, a lender can give you a high interest rate and that just adds to the overall price of your land.

Find a low interest loan should be a priority when you are receiving a loan. You do not want to make the mistake of paying a bunch on interest when you could have saved some money. If you settle for paying extreme interest, then it will be harder for you to repay the loan and it could also hurt your chances of earning more of a profit from the land in the future.

A great way to learn more about this is to ask someone who has done this before. Learning from an experienced land buyer will give you more tips than you would imagine.

Mistake #3: Ignoring the Inspection of the Property Before You Buy It

Think about it, you purchased what you thought was your dream property before you went to look at it or sent a professional to inspect it. Now you are on the way to see your beautiful land for the first time, and it is NOTHING like you expected. You cannot do anything you planned on doing with the land because it is not at all what you thought it would be.

This is something that is completely avoidable. Before you purchase the land, you are interested in, it is important to think about what you want to do with it. You will need a soil test if you plan to farm, a perc test if you plan to build and there are not county sewer services available, and do not forget about zoning codes.

 It is crucial to learn about the zoning for the property you are interested in before you purchase it. The zoning code determines what you can and cannot do on your land. There are certain rules and regulations you may not know about and learning the ins and outs is very important.

Mistake #4: Forgetting About Natural Hazards

Is this as important as it sounds? Yes, it is. Natural hazards on your land are much more common than you think, and they can determine insurance options and other things.

The most common natural hazards found with land are being in a flood zone, having unstable soil, being close to a fault zone, and being at risk for wildfires. If your land as any of these potential hazards, then you should speak with a land consultant and discuss your options for insurance to prevent any hurdles in the future.

Some of these hazards will prevent you from being able to build on the land or participate in other activities. It is a good idea to learn if your potential land has any of these issues.

Mistake #5: Saving Insurance for Later

Most big purchases will need some sort of insurance. It is important to not skip this step when you are in the market to buy land. Getting insurance policies for your land will protect your investment. Some common types of insurance that you may need when you purchase land are General Liability Insurance, and Property Insurance.

General Liability Insurance is helpful to have in case anyone gets hurt on your land. General liability will pay for your legal protection in the case that someone sues you for any damages that they face after being injured on your property.

Property Insurance will cover things like buildings and equipment that you have on your land. These things can get damaged, and it is important to get ahead of any accidents.

Mistake #6: Not Working with the Right Agent

Just like most things, there are people who specialize in helping with the process of purchasing land. You probably would not take your dog to your primary care physician because usually there is a vet for that.

Land transactions are much different than purchasing a home. It would be beneficial to work a company that specializes in land sales, who is experienced in buying and selling lots and acreage. A company with a large inventory is great because you have more options to choose from and you can compare properties.

 In addition, the company will be able to help you find the best land for you and will be on the hunt when anything new hits the market. For example, here at Discount Lots we specialize in land transactions and can help you find the best land for your needs. Another perk to working with a group that specializes in land sales is the opportunity for more payment options.

Investing in land is an incredible opportunity and we know it can be overwhelming. If you are in the market to buy land, remember these mistakes to avoid because it could cause a big headache in the future. Think about why you want to buy land and then make a list of what you need to have to do that.

We want you to find the land that you love and avoiding these mistakes can help you do that.

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