There’s more than 5 but I’m going to hit on these ones because I buy a lot of land and have seen these situations more than a few times. This especially applies to folks from out of town/out of state who travel up here to buy land. It’s much more difficult to cover all the bases without representation i.e. a Broker, lawyer etc. If you’re buying from my company , the Moose River Land Co. , you will not have to worry about any of this. If you’re out there on your own then you must know and avoid these 5.
1) Know who you’re dealing with : ok this sounds simple but sometimes it isn’t. If you’re working with me or one of the others in the land business then you have nothing to worry about , same goes for a broker you may be working with. What if you found a land for sale ad from a private seller who has no broker and is selling on his/her own? Happens all the time and usually it isn’t a problem IF you pay close attn. I’ve seen situations where siblings inherit land and one of them decides they are going to put it up for sale without the consent of the other 2. Legally they can’t do that but they can waste a lot of your time and potentially money. Anyone can run an ad trying to sell land or anything , it doesn’t mean they have the authority to sell it. I’ve run into situations where one partner is trying to show the others how much they could get for the land , after wasting your time and money. I’ve seen people put land for up for sale they don’t even own – usually it’s owned by their parents but they still don’t have the authority to sell it. You could get well into the process of buying and find out the person you’re dealing with can’t even sell it. Find out who owns it and make sure you speak with them before you even think about taking the next step. Request they give you their attorney contact info so your attorney can speak with his/hers before you spend a dime looking at the property.
2) Know what is really for sale : This is my favorite when it comes to ripoffs and plain old BS from a seller. A person puts some property up for sale and they can’t prove to YOU what it is they own. You’ll hear this one : ” we always went by that hedgerow as being the line” , or ” We always used his road to get back here , he doesn’t care”. I could go on all day and longer but you see where I’m going. DO NOT EVER sign a contract or buy land without a survey done and in your hands. If this person has owned this land for 40 years and says “we always went by that ….(fill in the blank)” it means nothing , zero. I’ve written before about all the times I’ve tried to buy land and the seller doesn’t even know what they own. They think they “own” this but they don’t. This is the single biggest mistake people make when out there looking at and buying land. A seller who has a broker is no more educated than a person selling on their own when it comes to proving what is actually for sale. No offense to my broker friends but you can’t depend on them to tell you what this person owns. The broker gets all their info from the seller , don’t ever forget this.
3) avoid ” Land Contracts” at all costs :Let’s clear up one thing right now – “land contracts” & “owner financing” are not necessarily the same thing. Land contracts are usually written for shorter periods of time and can be filled with loopholes to hurt the buyer. Usually a Land Contract i.e. Contract for Deed , is written so the title to the property stays in the name of the seller until the contract is paid off. I would strongly advise against buying any property under these circumstances. The reason a seller wants to do the paperwork this way is so they can kick you to the curb if you’re late with 1 payment , or whatever language in the contract that gives them the means to cancel the agreement. A lousy contract will cost you the property if you agree to language many sellers will request. By keeping the title in their name they can avoid foreclosure if you can’t make a single payment or several payments. Long story short , the language is never written to favor the buyer , never. True Owner Financing is different in that the property is actually in your name and there is a legal “closing” on the contract/agreement. Land contracts don’t even have closings , it’s like buying a used lawnmower on Craigslist. I’ll tell you the only way you can avoid these scenarios is if you’re buying from a land company , not to be confused with a land broker who is nothing more than a broker listing land instead of homes. DON’T DO LAND CONTRACTS !
4) find out local zoning laws and what’s allowed : This can sound intimidating but it isn’t. Pretty much all townships have a website now and their zoning laws etc are right there for all to see. It’s important to locate where on the zoning map the land for sale is located. A land company will have this info , a private buyer won’t have it 90% of the time. If you want to park your camper on the land you have to know IF you can and for how long you can. Whatever your interest/plans are make sure it’s allowed before you plunk down any cash. I see one of my competitors barking about finding out what development is planned in the town for the coming years and how this could impact my purchase. That may sound good but it’s nothing more than BS. No town can tell you what’s coming 5 years from now or even next year so don’t waste your time worrying about it. Find out what’s allowed and make sure you aren’t in a commercial development zone. Agriculture, forest zones etc. are what you will find 99% of the time. Just confirm that so you don’t make a potentially expensive mistake.
5) Liens : Another one that can be real expensive if you don’t do your homework. BTW homework = money so be aware of that every time you start the process. Liens can be anything from back taxes , an outstanding debt with a person holding some paper on the property , it could be a million things. Again if you’re working with a land company these things are taken care of before the property ever hits the market. It’s possible for someone to have land for sale and they don’t even know there are any liens on the property. If you aren’t dealing with me then you better have a lawyer. Also there could be leases on the property in effect right now. Maybe the farmer down the road has a written agreement allowing him to plant a field on that land for the next 5 years. What if the seller has given out a hunting lease on the land you want to buy? There won’t be a filed lien on the place but I can tell you if the farmer has rights or a hunter has hunting rights you will find out eventually. I know guys who have hunting leases that are written so they keep their hunting rights if the property is sold. You better make sure you aren’t buying that piece of land.
I’ve got to figure out how to explain these things in fewer words. I get going and next thing ya know I’m 1300 words down the road! I hope my list is of some help and gets a conversation going. I love to hear what people think and what they can add that will help others. Please take the time to send a comment & share with your friends. Thanks for tuning in , I really do appreciate all the people who come here every day to see what’s going on. I just started doing this and I’m shocked by how many of you come here. Good thing ya don’t know me or you would never be here !! Have a great day and let me know what’s going on. FYI I took the turkey pictures yesterday morn ( Easter Sunday) not far from my house.