Have you decided to build your own house? That’s great–now you need the perfect lot to build it on. However, investing in vacant land can be complicated. It might be challenging to determine what you need and secure adequate financing to get it.
In this post, we share some common challenges first-time property buyers might encounter. These will help you identify potential hurdles and go down a smooth road to property ownership.
Start Saving Early
Starting to save early can help you accumulate more money until you close the land deal. You can also earn even more with interest from savings accounts. If you’re after smaller plots of land, you might be able to pay for it in cash. It’s wise to create a separate account for your land-buying savings to know precisely how much you have to contribute to your property. If you want to secure funds by selling smaller land lots to purchase a bigger one, it’s best to look for reputable land investors, like Simple Land Selling, that will purchase your property hassle-free. In this way, you’ll be out with the old and on a quest for the new (land).
Looking for Land Loan
Land loans tend to be of higher risk, and it’s usually tough to qualify for one. Usually, banks will require a 20% deposit, at least 5% in genuine savings, equity in another property, good credit history, and stable employment. Still, if you’re going to try your chances, there are several types of bank loans suitable for land buyers. Evaluate all options to discover which one works best for you.
Doing a Personal Credit Check
Be sure to do a personal credit score check so that you can learn what loans you’re eligible for and make an informed choice. This practice will also help you identify and correct any mistakes and resolve negative marks on your reports. That way, you can get more loan options and earn a lower rate.
Learning About Owner Financing
Owner financing is an alternative land loan option. Essentially, you’ll have to make a down payment and then pay the amount in instalments over time, according to a previously set schedule. Unlike traditional bank financing, this is an agreement between the seller and land buyers, so everything is negotiable. Of course, it’s essential to have the papers reviewed by an attorney before signing anything to avoid unpleasant surprises along the way.
Hiring a Good Estate Agent
Buying raw land comes with a certain level of complexity, so knowing a real estate professional specialising in land sales comes in handy. The best real estate experts will help you better understand the land market, find a suitable lot, obtain the necessary information, negotiate your contract, and close the deal. However, don’t just hire the first estate agent you come across. Instead, check reviews of agents in your area, talk to friends who have worked with one and visit their office to ask for some referrals.
Forming a Long-Term Plan
As we said, buying land is a capital investment, so having a long-term plan can help you choose a lot that fits your bottom line – balancing long-term life goals with what you can afford. Also, consider the lot’s location and nearby amenities like public transportation, highways, schools, parks, and anything important for you. Finally, it’s essential to ensure that the area where you’ll build your house has the landscape you love and a culture where you and your family can thrive.
Doing a Land Inspection
Land inspection can reveal issues that might affect construction in the future. Therefore, you shouldn’t skip a property assessment to save time and money. That might help you win the bid in a competitive market but can become a costly mistake if you find that the soil is contaminated or the land can’t pass a perc test. Doing a proper inspection will make sure the land is buildable and that everyone understands the land’s condition before the sale is finalised.
Negotiate With the Land Seller
When you consider all the essential factors and find land that suits your needs, it’s worth negotiating to get it. The negotiation approach will depend on the starting sales price and the current situation of the market. You should also be aware that there might be multiple bids on the properties you’re eyeing. To improve your odds at winning a bidding war or negotiating a better price, you need to plan your approach. It might be good to work with a realtor as they have the experience to prepare a solid offer to buy and negotiate strategically on your behalf.
Buying land for the first time is an exciting and important step in life. If you’re looking for the dream plot to build your house on, the journey can quickly get overwhelming. So, we hope that we’ve simplified the entire process for you by giving you a better idea of the common challenges for first-time property buyers.