Buying your first piece of rural land can be very exciting. First time land buyers often tell me, “I want to buy a piece of land, but I don’t really know what I am doing.” Buying land is something most people do only a couple of times in their life, so this article is aimed at increasing your chances of having a successful transaction.
The list of questions and information contained in this article are not meant to be exhaustive or to give legal or other professional advice, but are for general informational purposes only. You should seek the counsel of a licensed attorney or other professional about your particular situation.
The following list of 24 Buyer Due Diligence Questions to ask is meant to be a helpful checklist to determine if a property fits your needs.
Deal Breaker Questions:
- Can the owners convey Clear Title in the form of a General Warranty Deed as evidenced by an Owner’s Title Insurance Policy?
- Is there Legal (deeded) Access to the property?
- Are there any adverse claims, lis pendens, judgements, or liens against the property that cannot be cleared up?
- Are there any Health or Safety issues related to structures or the property?
- Are there any Latent Defects with structures or the property?
- Is the property in an area designated as a FEMA Floodplain?
- Are there any Environmental Hazards with structures or property?
Possible Deal Breaker Questions (depending on the buyer’s intended use):
- Do the Mineral Rights convey with the sale?
- Are there Covenants and Restrictions on the property?
- What is the current Zoning of the property?
- Will all Standing Timber convey with the sale?
Point of Information Questions:
- Is there a current Survey?
- Have the property Boundaries been Marked?
- What are the soil types? What is the Site Index for growing timber?
- Is the property on a Well or County/City water? If on a well, have there been any issues with water quantity or quality?
- If a property has a house, are there any known issues with the roof, foundation, septic system, appliances, electrical service, fireplace, furnace, air conditioning units, leaks, flooding, mold, mildew, pests, or other issues a reasonable person would find concerning?
- Is there a current Appraisal on the property? Will you share that information?
- Is there a current Timber Cruise on the property?
- Is there a current Home Inspection?
- What are the Annual Taxes? Are there other fees, dues, taxes, or costs associated with owning this property?
- Are there other people who have a legal access to cross the property?
- If there are ponds, lakes, or other water impoundments do they leak or have structural problems?
- Why are the owners selling the property?
- Is there anything you can tell me about the property that you would want to know if you were buying it?
If a property you are considering checks a lot of your boxes, fits within your budget and meets your objectives, you should strongly consider making an offer. Hopefully you already have your financing options in place, and will be ready to move forward. Buying land, like any other business decision, is simply making the best decision you can with the information you have available. The Due Diligence phase is a crucial part of making the best decision possible, so ask the questions that will give you the best information. I hope this is a helpful resource as you move forward with your land purchase.
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