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Women's Day Circle

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Alexander Knyazev
Alexander Knyazev

How To Buy Vacant Land In California

Buying vacant land is part of the American ideal of building a home, settling down and starting a new life. Homesteaders traveled thousands of miles and crossed oceans beginning in the 1600s to do just that. Today, there is still vacant land available, but the ownership process is a little more complicated than moving out West and staking a claim. If you keep a few guidelines in mind, you, too, can buy your piece of the American dream and create your own homestead.

how to buy vacant land in california

Location drives the value of land. Proximity to natural resources, infrastructure, shopping, commerce and other desirable attributes determines how much the land will cost. You must become familiar with the plot of land and the area around it to be sure that it meets your needs. Survey the land and conduct any testing for wells, septic, ease of water and sewer hookup, access to electricity, environmental safety and flooding conditions before purchasing. Many land contracts allow you to make the sale contingent on testing results. You also need to check the zoning for that piece of land to be sure it fits your intended use.

A seller is free to ask whatever he would like for his land, but that does not mean the land is worth it. Market research, including the selling prices and tax values of the surrounding land with comparable features, will help you determine whether you are paying a fair price. You can also use your research to justify a lower offer. Most lenders require land cost for a single-family home to stay between 25 percent and 30 percent of the appraised value of the property, according to Rob Ransom, an Escondido, California, real estate agent, on his Vacant Land Info website. You must make sure that the land cost is not too high for the home you are planning to place on the property and that the area can support the entire value of your land and home. If you buy 10 acres for $100,000 and plan to build a home for $300,000, a lot surrounded by mobile homes on 1 acre may not appraise high enough for a lender to give you the money.

Buying a vacant lot is an important and complex decision, just like any real estate purchase. For starters, there are plenty of reasons to buy a parcel of land. If you buy a house, it's probably so you can live in it; but with land, you could choose to build your own house, use the property as a long-term investment or even to start a business. Property also introduces a host of issues you don't normally face when buying a house. There are all sorts of restrictions that could apply to a vacant lot; you might not be able to build a house on it at all.

Location, location, location. The old real estate adage nails our first, most basic concern in land purchasing dead on. Think about it: No matter why you're purchasing a piece of property, nothing is more important than location. If you're making an investment, don't buy land with no resale value. If you're aiming on starting up a business, don't buy land completely isolated from potential customers. And if you're building a house, buy where you can enjoy spending your time.

Before shopping for a piece of land, you should develop a general idea of where you'd like to make a purchase. You can go for an exploratory drive and use online resources to help you. For example, if you're buying a few acres of land to build a house you'll likely want to consider things like access to schools, your job, grocery shopping and restaurants. (Later we'll delve into specific land concerns.)

If the land is for business use, choosing won't be so easy; you'll have to carefully analyze a prospective location's business value. But if you're already planning a business, you should have that in mind already. Whatever kind of land you're looking for, the costs can add up quickly even before you start construction. Next we'll hit on some of the basics to be ready for.

Real estate is an investment of time and money; the more time you spend preparing, the more ready you'll be to spend your money wisely. What kind of expenses can you expect to incur when buying a vacant lot? At some point during the purchasing process, you might want to consider title insurance. It "protects owners and lenders against any property loss or damage they might experience because of liens, encumbrances or defects in the title to the property" [source: Hayes]. Consider it your shield against legal complications involving your property. While title insurance isn't necessarily required during a property transaction, if you apply for a bank loan or a mortgage, the financial institution may recommend you purchase title insurance to protect their investment and your own.

Another potential cost to consider: a land survey. It's possible you won't need a survey done on land you're interested in buying. The land could have been recently surveyed, and with a little legwork you should be able to find out if and when a survey's been done. We'll get into surveying in-depth later, but keep in mind that you may need to hire a professional surveyor to chart out the boundaries of your property. Because surveys vary based on location and a host of other factors, it's hard to give a general estimate of how much one will cost.

Finally, remember that utilities and building costs will be expensive. In some cases, you may have to pay to have electricity and water run to your house before you even begin monthly service fees. On some land, you'll have to drill a well or install a septic system before home construction. If you're buying a piece of land as an investment, you'll bypass quite a few of those headaches.

Figuring out the basics of zoning shouldn't be too difficult. For instance, certain areas will clearly be zoned residential. You can seek out the zoning office in any U.S. county or look it up online to find useful records for any parcel of land. While you're digging around in those records, make sure to pay attention to the county's long-term land use plans and scheduled road additions. Those will dictate future construction and could spell the difference between a nice quiet front yard and a house uncomfortably close to an interstate 10 years from now [source: Kenton].

Land destined to be built on or sold is typically carved up into smaller parcels that make up subdivisions. The land in a subdivision likely already has some restrictions placed upon it that you'll want to know about before buying. If the vacant lot you're eying is in the middle of an already developed community, chances are good that a homeowner's association governs that area. Homeowner's associations command membership fees and set the rules for behavior and decorum in the area. Following their rules could dictate how frequently you cut your grass, where you park your car or even what kind of pets you have [source: Christensen].

All those restrictions may sound like a real headache, and they can be. But they can also be a blessing. After all, the rules apply to everyone else, too. If you find a piece of land you like with covenants you can live with, you'll know everyone else in the area is bound to the same standards.

Those of you looking to invest in property and keep it pristine and unaltered won't have much use for utilities. For everyone else, they're a vital element of the equation. Any vacant lot you're eyeing for a home or business will need utility access. That includes electricity for power, gas for heat, and lines for internet, television and phone. You'll want some or all of those piped into your property when construction begins. One way to bypass this concern entirely is to purchase vacant land that already has utilities installed.

More important, however, is the issue of access. A public road obviously guarantees a route to a vacant lot at all times. But when private roads enter into the equation, things get complicated. If your property is landlocked, the typical solution is to make an arrangement with a neighbor for guaranteed access via a private road through their land, known as an easement. We'll discuss this next.

With easements, we delve into the world of real estate law. According to Merriam-Webster, an easement is "an interest in land owned by another that entitles its holder to a specific limited use or enjoyment" [source: Merriam-Webster]. Imagine you find that perfect piece of property. It has everything you're looking for: a lush, dense forest, a babbling brook and a clearing with an amazing view perfect for your dream house. But there's a problem. There's no public road with direct access to the property, and the only way to access it is via a private road owned by your would-be neighbor. That's where easements come in.

In most cases, it's smart to consult a real estate lawyer when negotiating an easement. Even if you get along well with your neighbor, drawing up official documentation will allow you to lay out the terms of the agreement and protect yourself from liability [source: Schleiffarth]. If your neighbor isn't too agreeable about negotiating an easement, things can get tricky. You may be able to sue to establish a "way of necessity," meaning you'll have to prove in court that you require an easement on a neighbor's property for access. You may also be able to sue for an easement based on prior use, if it's clear that the previous owners had access to a neighbor's property before you purchased the land [source: VacantLandInfo]. If there's any legal involvement, be smart and hire a real estate lawyer.

Finally, we're back to good old surveying after mentioning it as a potential basic cost in the lot-buying process. When you look at property boundaries on a map (in real estate, often called a plat) it won't be immediately evident how those boundaries line up with the land itself. That's where surveying comes in.

Professional surveyors research your property and use a plat to determine and mark the exact property boundaries of your vacant lot. When you look into buying a piece of property, it's possible a survey has been done recently. The evidence of a survey should be visible on the property with markers identifying the corner boundaries. You may even come across evidence of a survey when investigating the paperwork of a vacant lot yourself. 041b061a72


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