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Tips For Buying Unimproved Rural Land

Would you like to own your own rural acreage? Something to farm in your retirement years? Or perhaps develop and subdivide down the road? Real estate is generally a good long term investment, but before you plunk down the down payment on a 40-acre “ranchette,” there are a few things you might want to consider.

Ingress and Egress

Ingress and egress is a fancy legal term for access. When looking at a piece of property, there might be a dirt road that leads to it. Do not assume that this is a permanent road that you will be able to use at your pleasure. Check with your county recorder and the seller about the road status. If there is any doubt, make sure that as a pre-closing requirement, you will be given a recorded road access agreement that clearly describes the location of the road. If the seller is unable to agree to a road agreement, walk away. Your land with not be worth much if it is landlocked.

Ask the seller and locals in the area about the road conditions during the winter and rainy seasons. A dirt road may seem perfectly fine on a warm, dry summer day but it may turn into a quagmire during spring snow melts. Find out if the road is plowed or otherwise maintained, or whether there is a recorded road maintenance agreement in which property owners who use the road share in the maintenance costs.

Location and Cost of Utilities

The nearest electric line might be five or ten miles away, so you will need to find out how much it will cost to get power to the land. It might cost thousands and thousands of dollars to hook into the grid, and the sheer cost might be prohibitive. Solar and wind generated power sources have improved in the last few years and could be a great alternative. Before buying, you might want to see if there are any local alternative energy consultants and vendors in town. They can let you know the approximate cost of installing wind or solar power, what will be involved in maintaining your off-the-grid power source and can share stories about others’ experiences. You might also need to check into portable power generators. Sometimes you can convert gas generators into propane generators, and then receive a discount from the local propane company because your propane generator is a primary source of power. Check with your local propane company.

When you are looking at the land you are thinking about buying, take your cell phone with and see if you can get a connection. If so, you’re off to a start with telephone service. You might need or prefer to have a land line instead of cell phone service. Like traditional electricity, find out how close nearest main line is and how much it will cost to connect.

When buying land in a rural area, chances are, there will be no public water connections or sewer connections.

As to water, if there is already a well, you’re in luck if it is a reliable well. Be sure that all requisite paperwork is in order on the well before buying, and demand as a condition to closing that the well ownership will be transferred to you. If there is not a well, the real estate department (or similar agency, depending on your state) may have a report on file that will tell you about water availability and average depths to water. You might be tempted to enter into a well sharing agreement with a neighboring landowner. Well sharing agreements, if drafted correctly, can be okay, but make sure you talk with an attorney first before entering any kind of well sharing arrangement. Well sharing agreements tend to turn into legal nightmares when property changes hands or when the pump goes out and the users start squabbling over who will pay to repair it. There are increasing regulations about well sharing arrangements and you are much better off spending some money on a qualified water attorney before entering any such arrangement.

Instead of a sewer connection, you will most likely need to install a septic system that complies with local ordinances. If possible, see if the seller will pay for perk tests before the closing. You will not want to find out after you have closed that the land is almost pure clay and will not perk.

Other utility-types of considerations are:

* Where is the local landfill?

* Is there satellite service that can be used for phone, Internet or television services?

* Are there local propane delivery services and if so, will they provide a tank and trench your lines?

Easements and Restrictive Covenants

When buying raw land in a rural area, particularly in the west, there may be cattle easements around your parcel of land. These easements may be ten or twenty feet wide, which means that you will need to set back any fencing around your property so that the cattle can be driven along the easement. If you do not fence your land, the cattle may have a “right of way,” so to speak, to roam your property and graze. Depending on the local laws and cattle types of easements, if your land is unfenced and the cattle eat up your entire corn field, the cattle owner will not be liable for your lost crop.

Make sure that you take a look at the title report before you buy. There might be restrictive covenants such as the type of house or fence you are allowed to construct on your land. You might be prohibited from building certain types of outbuildings, or there may even be restrictions about whether you can put a mobile home on the property. If you are planning on eventually subdividing your acreage, there may be restrictions on the size of your subdivided parcels (subdividing involves a lot of legal issues and regulatory compliance). There might be road easements, phone line easements or other title matters that you need to know about. These matters are routinely disclosed in a document generally known as a title insurance commitment, which you will receive prior to closing if you will be receiving title insurance.

Title and Survey

Make sure that you will buy title insurance when buying your land. This will protect you if there are easements, covenants, competing ownership interests or other clouds on title that were not disclosed prior to closing.

Check on whether the land was surveyed and staked by a registered surveyor or engineer. If not, demand that it be surveyed and that you are provided with a written property description and survey. If the land has been surveyed, walk it and locate the survey stakes. If the stakes were vandalized or are missing, have the stakes replaced by the registered surveyor.



Source by Deborah Beeksma

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