So Many Properties, So Little Time: 10 Steps To Finding and Buying the Right Property for You
If you are a buyer in today’s market, you may be feeling a bit overwhelmed by all of your options. You may be finding it difficult because there are so many listings that you think you need to look at prior to making a decision. Just when you think you have it narrowed down, there’s a whole new crop of listings. All of this leads to market paralysis, and leads you to missing that great deal you have been so adamant to find. You second-guessed, thought there may be one just a little bit better, and you failed to act…even though your instinct, research, and the agent you have been working with all told you it was a good deal. Back to square one all over again. Maybe buying land isn’t for you? Does this sound familiar? If so, read on. I have been helping buyers of land in Alabama for a long time. I have seen this play out many times over, but it has become more prevalent in the last year. Our brokerage firm, AlaLandCo, has over 400 listings on the market in Alabama. A quick search on LANDFLIP.com will show you that there are currently over 1,300 listings in Alabama, 2,800 listings in Georgia, and many more in other states. You CAN narrow it down to something manageable. You CAN cut through all of the clutter and find those listings that fit your criteria. You CAN find the right property for you. Here’s how…
1. Stop worrying about what you are going to miss. You can’t have it all. Somebody else WILL get a better deal than you. I’m not saying throw your money at the first property you see, I’m telling you to focus on variables that you can have some control over. You cannot control the entire land market.
2. The market may go up from here, or may go down from here. A little research, and time investment will show you that there is currently much more room for land to go up than to go down. We are at or near the bottom of the market. Interest from REAL buyers has picked up, and I am beginning to see some competition for good properties. Land is generally a long-term investment. The ups and downs of the near-term market are merely blips on the radar screen of the entire land market. Sometimes the view from 50,000 feet is more accurate than the view from 10. Long-term trends will guide how your investment in land performs. Don’t get caught up in the day-to-day sensational media stories. Familiarize yourself with the TRUE market.
3. Narrow your focus, geographically, to the location that works best for you. Generally the nearer to your primary residence, the better. You will be more apt to visit the property and maintain it if it is nearby. There are enough properties on the market today for you to find something suitable and not drive 18 hours to get there. Closer is better, even if it costs a little more. Further, properties in Alabama are not really that comparable to properties in Kentucky. Create a focus area. Find the center point of a location that works best for you and narrow your focus to within 25 miles of that point. You may create a focus area of land for sale in East Alabama and within a 2 hour drive of your home near Atlanta, Georgia. Figure out what your geographic focus should be and stick to it.
4. Once you have narrowed that focus, find a good agent working in that area. Find an agent that works with buyers of land and farms, someone with knowledge about those types of properties. Are they going to know about all of the properties in the area? Probably not. They will know about most, and should have enough market knowledge to advise you on a good deal when they see one. Communicate with that agent. Write down what your ideal property looks like from an aesthetic, geographic, size, use, and investment standpoint. Write down those things which you absolutely do not want. (If you make this list too long, you will scare off good agents). Once you know what that ideal is, be flexible. You probably will not find something that fits ALL of those criteria.
5. Budget. Figure out what your budget for the investment is. If you need to borrow money, go ahead and check into that. The agent will probably have some local sources they can send you to. Talk to these people, see what type of loan products they offer, see if you will qualify for those products. Make sure you can meet the expected down payment and closing cost requirements. Then narrow your search to properties that fit within the financial guidelines that your budget allows.
6. Notice that we are on step 6, and have not looked at a property yet. It will come. The exciting part will get here, I promise. Won’t it be better to look at properties that will work for you instead of spending every Saturday for a year looking for the perfect place? Now, on with step 6. Search the web for properties that fit your geographic criteria from step 3, your written down criteria from step 4, and your budget criteria from step 5. If you have done a good job on the previous steps, this one becomes much simpler. Instead of 500 potential properties, maybe you have it narrowed to 10-25 potential properties. Look at these individually, and toss the ones that have aspects that you really dislike.
7. Once you have that list down to 10 or fewer properties, send it to the agent you have chosen to work with. Get their opinion on the properties. They may have been to the properties and know a great deal about them, or maybe not. Just because they do not know a particular property does not make them a bad agent. Narrow your list once again down to 5 or 6 properties that best fit your goals. Print out the information, maps, directions…anything you can find on these properties. Organize these in some fashion that works for you. Leave room for notes.
8. It’s TIME! Call your agent and make an appointment. You are going to look at land! Dress Appropriately! Shorts and flip-flops are not appropriate attire for walking through fields and forests. If it’s hunting season, put on your orange cap. If it’s summer, then insect repellant is appropriate. Read my good friend, Jonathan Goode’s article on this subject here: Buyers- 5 Tips for Previewing Rural Property. While you are there on the properties, take notes. It will be hard to remember those aspects you want to remember after looking at 5 or 6 properties. You will get the properties confused after looking at this many. Good notes will help keep that straight for you. If you do not like a property, promptly tell your agent that you have seen enough and are ready to move on. They WILL appreciate your honesty. Tell them why you do not like it and it might save you a trip to a similar place. Agents will like burning less $3.00/gallon gas…I promise! Take out the printed material on that listing that you do not like, crumple it into a tight ball, and throw it away. (Recycle if you are particularly green) You no longer need this.
9. If you found a property that works for you, it’s time to act. If you did not, don’t worry. Just wait about a month and repeat steps 6 through 8. Avoid getting caught up in the trap of endless analysis. Do enough due diligence to be prudent, but don’t miss the forest for the trees. This is a logical process to help you not become overwhelmed. For those that have found a property, ask the agent what the appropriate next steps are. Generally, you want to know what similar properties in the area have sold for recently. There may or may not be good information on this available. This is a market condition, not an agent ineptitude. This can help guide you in making an appropriate offer. Make an offer that is harmonious with your financial criteria set out in step 5. Make the offer with a little negotiation in mind. I seldom recommend sellers to have no negotiation room in a listing price, and I certainly never advise buyers to offer all that they can on an initial offer.
10. Once you have a “meeting of the minds”…meaning a valid purchase-sale agreement, it’s time to close. Your process will vary from location to location, by your financial criteria, and by the type property you are buying. A good agent can lead you through these steps. Generally it will take 30-60 days to get it done. If you are a cash buyer, it can be done more quickly.
Congratulations! You are now the owner of a rural property investment. A property that is a good fit for you, and probably a sound investment for your future. Reducing the process of finding and buying a property to a few logical steps will help you cut through all of the clutter in today’s market. Following the plan above will help you retain your sanity while you are finding that place in the country to relax on!
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