If you are not lucky enough to inherit land or find it for cheap where you want to live you can still buy it and have a farm without breaking the bank. I can’t afford to buy a house on land and the other manufactured homes on land are also too expensive to start off with.
There are different ways to “package” land and a home together. I am doing it the way that I can which is to purchase land on contract and then build the house out of pocket. The land will then be eligible for financing after a house is built on the land. Land alone is not easy to finance because it’s too high risk for banks. Without a house on the property you could walk away.
This is the way that I am going about things and not the way that everyone does it nor is there any right way. This is also my opinion or take on this process and I might not be correct.
First, figure out where you want to live. Where do you want to spend forever or a good portion of your life? Where can you get a job if you need one?
Find a piece of property without HOA’s or CC&R’s. You don’t want to buy land that’s part of a subdivision or land that has a homeowner’s association. To me these mean no fun, no farm and too many rules.
Find a piece of land that has the right zoning as in rural or residential not commercial. Make sure what you want to do is allowed within the zone of the land.
If the land is in timber designation which offers tax deferral you need to make sure that there is still 5 acres for the timber to keep the designation in place and also that the owner of the land who is doing the contract will remove it from the timber status designation. In Washington State it takes 38-40 years for timber to be harvestable. If you buy land that is in timber tax deferral and remove it you have to pay 7 years of back taxes. If the land will be your’s by the time of the harvest then you get the profits. If it is still in a land contract you will not get the profits and will have that much less land at your disposal. If the land is not designated as timber what kind of trees if any are on the land? Can you use or make any money after you remove any of them?
Check the taxes to see what their history is. Make sure you know how much money in taxes will be figured in to your monthly payments.
Check the drainage and the sunlight as well as what parts of the land are level. If you have the opportunity to be pickier look at what is growing on the land currently. What weeds or native plants are there? The land I found has stinging nettle which means the soil is high in nitrogen. What is the soil like? If you are going to have animals make sure there isn’t a large creek running through your property that you will have to fence off and keep animals away from. The animal manure getting in to the water is not good. Wetland designation is also another thing that makes me uncomfortable. I want to maintain native habitat but at the same time don’t want to deal with a lot of standing water and lost space.
What are the future plans for the area? Make sure you aren’t on the edge of a new housing subdivision. How are the roads and your future driveway? Is there an easement?
Talk to the neighbors and be nosey. What are their homes like? Are they all retired or do they commute? Do they farm or homestead or live a simple life? Ask them about the water and how far they had to drill for a well. I got the approximate depth I will have to go to get water and a great explanation of how to tell where the water is on the property from the next door neighbor as well as all of the neighbors occupations.
Get maps to show the exact property lines and check that the owners are actually the owners. How long have they owned the property? Why are they selling?
Save money up and figure out where you are going to get the money to pay for the land. In my case there is equity in the house so when it sells I can use that money to pay 20 percent down on the land. A majority of land contracts are 15 percent down so that the owner of the property gets funds to close on the loan and so you are seen as a safe and secure buyer who won’t take off.
The contract for the land should also be contingent on a perc test so that you have water. If it doesn’t have water you can either leave it and say no or if you want to do an alternative water system factor that in to the cost.
You can do a land contract with a real estate agent, lawyer or just between two parties. If you are concerned with any of the paperwork or fees or you have additional questions that are not being answered don’t keep signing papers.