Since you want to purchase a piece of land, it is only natural that you go about to search for a suitable one. Upon finding one, you should make inquiries from the realtor, real estate agents, local council office, neighbors in the area. Also, it would help if you physically inspected the place yourself because looking at pictures does not act as a substitute for this.
How Do You Protect Yourself When Buying Land?
Furthermore, you should speak to your mortgage bank and get the required documentation ready as well as your down payment needed to make an official bid for the land. However, there are still some things needed to do that will guarantee the safety and fair treatment of you and your funds.
You Need Appropriate Knowledge to Negotiate
It is noteworthy that acquiring land requires a combination of excellent negotiation tactics, special attention to all details of the documents to be signed, and little risk. For a successful negotiation, you need to know a lot about the piece of land you want to pay for.
Ordinarily, the necessary things to know are the physical properties of the land, where it is located, and the situation of its surrounding environment.
However, taking steps to find out why the owner wants to sell, how much the present owner paid for the place, how much time the land was his own, and so on can give you the upper hand when bargaining the price.
Realize that initially, the landowner has all this information, which provides him with the advantage, so you have to level the playing field to come out on top.
Ensure Everything Is Put into Writing
Have it in mind that there is no legal backing for oral transactions or agreements. Hence, you should make sure that every bit of information that will have an impact on the land value or your right to use it should be written out.
When making an official bid to the realtor or his agent, it should be in writing. This written offer would help in case there is a legal dispute over your right to own the land. It ensures that you are the legitimate owner of the property.
However, this offer should be prepared by an expert property attorney, or at least let one look through the final draft before it is presented to the landowner.
Find Out the Actual Value of the Land
It is wise to ask about the lands similar to the one you are interested in and find out what they cost. Additionally, it would be best if you considered other factors that might reduce the value like the nearness to noisy roads and public services (fire station, schools, shopping malls, etc.), drainage systems, electricity, etc.
However, if you are unsure of yourself when it comes to appraising pieces of land, employ the services of an expert appraiser. Sometimes, mortgage banks conduct appraisals before granting applicants a loan. Furthermore, if you are in the process of selling your landed property, the same real estate appraiser can help you with the land you want.
Although an appraiser cannot accurately state what the price of a piece of land is, they give a reasonable estimate of the amount of money you should be prepared to pay for the property at that time.
This price can be influenced by the laws of demand, which could raise the price if a lot of people want the land and drop if not many people are interested.
Additionally, appraisals can assist in your decision as to whether the selling price proposed by the landowner is worth it, and that can serve as the starting point of your negotiation.
This works well in cases where the appraised amount is a lot less than the selling price. Hence, you should inform the landowner ahead of time that you would not pay for the property until the appraisal is complete so that you will not spend more money than necessary.
Work with A Lawyer
The importance of working with a lawyer every step of the way cannot be overstated. However, you should ensure that they are an expert in real estate and know the steps to take in a real estate situation.
That being said, the attorney’s job is a lot more critical before submitting a bid than after that. Furthermore, they need to work on the terms of the offer and look out for any legal loopholes. Also, they should take steps to ensure that your money can be refunded in case the land turns out not to be what it claims to be.
A great attorney would be able to point out and inform you if there are any question marks over titles, issues with zoning or restrictions in the deed that will hinder your ability to use the land how you want.
Moreover, you should engage in discussions about your concerns about the deal with your attorney, and he or she would be able to provide you with legal advice.
Place The Down-Payment in The Trust of a Third-Party
It is common for some money to be paid upfront to let the realtor or landowner be sure of your intentions to purchase the land. Bear in mind that this money might be forfeited if the deal breaks down from your end, but it might not always be the case.
However, put this down-payment securely in escrow monitored by a third-party and not in the realtor’s private bank account. This ensures the security of your funds at all times and eliminates the risk of you not getting your money back if things fall apart from the seller’s end.
Conclusion
Getting land for yourself should be a thing of joy and not an unfortunate situation you should regret. However, bad things can be avoided if you exercise caution and employ the services as a lawyer.
Please do not give the landowner any money beforehand, so they do not part with it. Also, perform an appraisal on the property before you start negotiations to avoid overpaying more than the true worth of the land.
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