From: scotbri@flower.rosemount.com (Scott Brigham)
Subject: SUMMARY: Buying Land
Originator: scotbri@flower
Organization: Rosemount, Inc.
Distribution: na
Date: Tue, 1 Sep 1992 20:02:08 GMT


Well folks, here it -- the summary of responses I received on my request
about buying land in the country.  Thanks to all those who responded.
As you can see, this is sobering advice.  I was impressed with everyone's
passion for the topic and the friendly, helpful attitude they approached
it with.
=======================
scotbri@rosemount.com
Scott Brigham
Rosemount, Inc.
Eden Prairie, MN
=======================
____________________________________________________________________________
	       SUMMARY:  Things to Consider When Buying Land

____________________________________________________________________________
Suggested Readings:

Ken Duensing (duensing@bnr.ca) of Raleigh, NC mentioned the following
books:

Finding and Buying Your Place in the Country
by Les Scher

Country Dreams by ???

There were a couple of excerpts from this one in Back Home magazine. Written
by a land broker.

   $12.00 ppd
   Misty Mountain Press
   Box 210B
   Little Switzerland, NC 28749
   1-800-533-8532

Steve Fox (shf@ais.org) suggests the classic:

 _Building The Custom Home_, John Folds and Roy Hoopes,
 Taylor Pub ISBN 0-87833-653-2.  Contains good info on buying land as well
 as building.

Bill Cole (cole@dg-rtp.dg.com) suggests FARM by Richard Rhodes. 
He says " It'll keep you interested!"


__________________________________________________________________________

This advice from Steve Whitchurch (stevenw@pdx.mentorg.com):

My wife and I bought land about two years ago. We are doing the loan thing
to put a house on it at this time. If I was to do it again, I would have
bought land with a house already on it. I know thats not what you want
to hear, and I also did not want to hear that two years ago.

 Things to think about when looking for land.

   o Water, you will need a min. gal/hr of 8-10 (Oregon any way).
     Well cost 8-10K+.
   o Septic, get a perk test. A standard septic can cost 2-4K.
     A sand filter can cost 15K+
   o Power, where are you going to get your power. Check with the
     local power company, they should be able to come out and give
     you a free idea of the cost. (To put our power in is $1100.00, and
     we are putting our house only 400 ft from the pole).
   o Can you build a house ?, What type of house can you build ?
   o What will it cost to clear your land ?
   o What are the easements ?
   o Can you put in a road ?
   o What is the min. acre size to build ?
   o Has there been a servy (spelling) done ?
   o What is the zoning ?
   o Cost of permits ?, What permits do you need to build ?
   o Land use laws ? What are they ?
   o Are you paying cash or will you need a loan ?, Most all banks
     will not loan money on land only, you will need to get a contract
     with the seller.
   o Will you need a loan to build ?, Most all banks will not
     loan money on House/Land over 5 acres.
   o If you are thinking of farming, what kind of dirt does it have ?
   o Can you fence it ?, some land you can not fence (open range laws).
   o Access to the land, can you get to it all year round ?
   o Is there water for farming ?, This is not the same water to will
     drink. You will need a second water source for farming.
   
 Any way this is a start, and I'm sure that I forgot something. Buying land
 is a fun thing, but it can also be a lot of problems.
____________________________________________________________________________
************ START OF MARY MATEJKA'S ARCHIVE *******************************
 
Mary Matejka passed on some info she received from other netters a
while back:

Author unknown:

We have just ended (I hope) the search for our place. (Submitted
a contract). The thing that helped us the most was getting a 
copy of the soil survey for the counties we were looking at.
The Federal Soil Conservation people publish them. So I would 
think that all counties would have them available. We saved ourself
several wasted trips by knowing about soil type, pipelines and 
transmission lines. 

Oh that's another thing. Worry about easements. Public easements
can be widened without your consent. They can do what ever they
want with your property in the easement.  Especially avoid easements
that go all the way thru your property.

If you are looking at truely rural area, keep in mind that farmers
make noise. Dogs make noise. Crops get sprayed. That sort of thing.

I had another file that I must have wiped out. It talked about
interviewing the neighbors (We don't have any very close but we 
should have done it anyway). Ask them what it's like to live there.
Do the creeks rise? Is it quiet? How's the traffic? How's the water?
Anything you can think of. Check with the local health dept and
find out about the average septic system for that area. Check
with the local well drillers about average well depth for that 
area. (Unless you are in a 'subdivision' or near a public water line)
In fact on 10 acres I would wonder about that many private wells
that close together. You could get a local lowering of the water
table. Call the power co. How much will they charge to get power
out to you. Find a builder you like. Make sure he works in that
area. Infact our builder knew about places for sale. Plan on everything
taking for ever. 2 or 3 times longer than you think. Write a long
contract so it doesn't expire and they can't raise the price on you.

Also. If you ever want to get a loan, buy land with access on a county rd. 
Veterans and FHA no longer do loans on land which is not on a public rd.
Period. You can get conventional financing, but you need a road maintenance 
agreement. These are new rules, at a national level. Don't let anyone tell 
you different. We lost one piece of property over it. And it makes selling 
more difficult. Texas Vets has some lenient rules because they do just land.
There may be some other options in your state. Also if you are financing
a house the lenders have rules about no more than 25% of the value of
the property package can be in land. The rest has to be improvements.
And lenders on house loans in rural areas want 25% down. 

_________________________________________________________________________
Another bit-o-info from Mary's archive concerning buying land at an
auction.  Unfortunately, I don't know who to attribute this to:

Go the the auction.  Do not bid.  Just watch.  Maybe it's best that
you deliberately choose a piece of property you Really Would Not Want
just so you can learn to Not Bid on anything that seems the least bit
wrong.  Maybe go to several auctions.  Eventually you'll know what you
are doing, and can buy your Dream Ranch.

You might keep in mind that buying property at an auction is sort of
like buying a horse - it's not so much what you pay that's important,
it's what you get, and the auctioneer's job is to move the property
and get a good price, not to point out the bad conformation and the
navicular, or the washed-out foundation and rotted floor.

You had also better have a Whole Lot of Extra Money tucked away for
the equivalent of Feed, Training, Vet Bills, Shoes, or whatever else
you new ranch needs, like maybe a new well, or a new roof, or a good
title, or ammo to keep tresspassers away.  Don't forget you'll soon
need trucks, tractors, a sickle bar, a tedder, a baler, all that
stuff.

_______________________________________________________________________
From: cole@dg-rtp.dg.com (Bill Cole)
To: marym@devnull (Mary Matejka)


Suggest you settle on what areas are of interest and then 
contact the bankers in that area.  They'll know who's ready
to get out and who needs to get out.  There's also the FmHA
(that's the Faermer's Home Administration) and the county
extension agents.

______________________________________________________________________
From: James K Earp <earp@magnus.acs.ohio-state.edu>
To: marym@devnull (Mary Matejka)

>What if the builder does a bad job? How do you get your money back?


About the only thing you can do is hire a builder with a *long* and respectable
reputation, then check the work EVERY DAY.  The builder is only paid as certain
percentages  of the work are done, meaning when 20% of the work is done he 
receives 20% of the money.  By inspecting the work every day, you can know when
things are not being done as you specify.  I believe you have recourse to the 
bank who will want your approval to release the money.

My friends who have built say it is absolutely necessary to inspect the work 
being done at least every other day and preferably every day.  One of them had 
the builders rebuild his fireplace twice.  They were supposed to use a certain 
color of stone and use an old beam he had from his family farm's barn as the 
mantle.  The first time they build it with the wrong color stone and didn't use
the beam.  Second time they forgot to use the beam.  They kept trying to 
convince him to go with it as it was, but he stood firm and got what he wanted.
As he said, "I'm paying for one house and I'm sure not gonna live in a 
different one."

If you find something wrong after they're paid you can always sue, but I sure 
wouldn't want to go through that trouble unless it's a major problem.  Also, I 
emphasize the *long* part of their reputation because my brother had a 
five-year-old business (Dallas Homes, based in Columbus) build his.  They were 
nearly complete with his house when the company filed bankruptcy.  Many of his 
neighbors were left with half-completed houses and all their money tied up in 
escrow with no legal recourse.  Turns out the scum who owned the business does 
this every few years.  Like I said, my brother was lucky.  He just finished 
wiring a few outlets and he was done.

Our biggest problem is going to be raising the money to buy a place where the 
business doesn't already exist.  Banks don't like to loan on potential profit, 
especially nowadays.  Good news is you can get a loan for between 8 and 9% now.

*****************   END OF Mary Matejka's ARCHIVE ****************************
____________________________________________________________________________

Dan Rehak (uunet!KIEL.EDRC.CMU.EDU!Daniel.Rehak) passes this info along
about environmental issues:

You might need an environmental site assesment.  You need at least a
check of the ownership for the last 100 years to see if the site might
have been used for any industrial use which would have produced
hazardous wastes.  Also, you would need an expert to do an visual
inspection/walkthrough of the site.  Doing this seems to be the minimum.
Doing more, like actual sample testing will get very expensive.
Even farms need to be checked, for things like old gas tanks.  Removing
a tank is now quite expensive, requiring an EPA certified remover,
hauling the soil to a hazardous waste site, etc., about $25000.
The current laws are that the current owner of a site is responsible
for any prior hazardous wastes, so you want to make sure it is clean.
Generally, you can put passing the inspection as a condition in the
purchase contract.

There are engineering consulting firms which specialize in environmental
site assessments.  Some of them might advertise in the yellow pages,
probably listed under consulting engineers.  Another good source might
be a lawyer.  Here in Pittsburgh, because of the long industrial
heritage, lawyers are very conscious about such issues, and people
who deal with land purchases frequently know who the local consultants
are.  You want to find someone who handles typical small parcels,
not a major consulting firm.  We bought 13 acres about 4 ago, and
the site inspection, which was the deed search and the visual inspection
of the land was about $1000.  If the land your are looking at is only
field/woods which has no other prior use, you might be OK in skipping the
inspection, but I would be very concerned about a farm which might have
old tanks.  Good luck!
_____________________________________________________________________________

Al Onderick (uunet!odin.icd.ab.com!aao) adds the following:

1. Verify the land meet zoning requirements to build.

	a. set-back 
	b. minimum acreage.
	c. minimum frontage.
	d. what is it zoned for (if its zoned)
	
2. Find out what utilities are available.

	a. Electric	
 	b. Gas
	c. water
	d. sewer

3. Is the land suitable for a normal septic system.

4. Is the well water acceptable and at what cost. (how deep?)

5. Is the soil suitable for a foundation. (bedrock?, humus clay?)

_____________________________________________________________________________

From Steve Fox (shf@ais.org) comes this sobering advice:

All possible advice to you can best be summarized thusly:
Get a good lawyer. ( End of Advice )   

Seriously.  Realtors are incompetent, especially when
it comes to buying raw land, land which is in no way guaranteed suitable
for human habitation, and they ( the realtors ) cannot conceive of any
thing more complicated than their next commission check.

I just closed on 10 acres in July, and it was not fun.  Of course I am 
ecstatic now that its over, but I had to keep my hand on my wallet at all
times.  Among the cute things that the realtors tried was:

o	Misrepresenting a legal description as a stake survey.

o	Lying about the status of other pre-closing contingencies.

o	Changing the terms of the sale, after a signed agreement was 
	executed.

o 	Continually tried to get me to close prematurely.  It was an
	all cash deal, and my seller was undercapitalized. He was 
	required, as part of our agreement , to build a .75 mile road
	from the county road to my property.  He didn't like that:)

Luckily, after I started to smell a rat, I engaged an attorney who guided
me through the rats nest.  All told, I think he cost me about $500.  Money
well spent.  Just the stake survey trick alone could have cost me thousands
of dollars in lost land.

Get everything in writing. DONT make any verbal agreements.  Get perk tests.
See if land is platted. Don't assume anything.  And above all, have fun:)

If you want to know more, mail me. I love to talk about it.
_____________________________________________________________________________
From: Jim Paradis <uunet!sousa.enet.dec.com!paradis>
To: scotbri@flower.Rosemount.COM

We're in the process of trying to buy a 52-acre parcel in rural
Massachusetts.

Methinks the *first* thing you need to think about is how you're going
to finance this.  If you have the cash in hand, fine.  If *not*, be
very careful!  There are *very* few lenders out there who are willing
to finance the purchase of unimproved land... *especially* if you're
not planning to build right away.  That's the position we're in... basically,
we want to buy a hunk of land at the bottom of the recession, and hold onto
it for a few years until our house is worth more and we can cash it out.
Since we need to finish the renovations on our house anyway, we won't be
in a position to build on the land for a few years yet.  After calling
all over Massachusetts, we found exactly *three* lenders who'd do land
loans:

	Lender 1: (a local bank) 60% financing on "unimproved"
	lots (i.e. no town water/sewer), 80% financing on
	"improved" lots (town water/sewer).  8.75%, no points,
	10-year term.

	Lender 2: (Digital credit union) 70% financing on land,
	1 point, prime + 2, adjustable *monthly*, 15-year term,
	3-year balloon.

	Lender 3: (a finance company): 80% financing on land,
	3 points, prime + 8.75 (!), adjustable yearly, 15-year
	term.

We're going to try for the credit union first (since they're willing to
go with a higher loan-to-value ratio), and then the bank.  The finance
company is out of the question!

--
Jim Paradis (paradis@tallis.enet.dec.com) 
______________________________________________________________________________


From: Gary Hypes <uunet!hpdmd48.boi.hp.com!hypes>
To: scotbri@flower.Rosemount.COM

(1) Water rights, water rights, water rights.

(2) Water rights ... etc.

The first and foremost question is, what do you want to DO with the
land? Own and hold as an investment? Build a home on it? A farm? Raise
critters? The answers to those questions will help determine what you
need to know about.

Water is pretty central to everything: rights (a very odd business,
sometimes), sources, quality, etc.

Zoning/covenants: sometimes you think that just because it's in the "country" 
you can do anything you want with it. 'Ain't necessarily so.

Access: local highways, the need for private roads on the property
itself, etc. What's the area like in bad weather? Are you on or near a
main thoroughfare where the roads are likely to get plowed after
snowfall?

Appraisals: If you're building a home, FHA will appraise the house and
ONLY the first 5 acres. On a highly leveraged loan (low down-payment),
that can be a killer.

Local resources: if you want to have your field(s) disc'd up, can you
get the farmer next door to do it, or do you have to hire someone from
20 miles away to come out?

Goals: can you AFFORD to do thing things you WANT to do with this land?
(You want to raise a couple of calves or horses? Do you have any idea
how much fencing and sheds are going to cost?)

Environment: how's your hay fever? Are there any long-range plans for
commercial development of the area you're looking in? How do you feel
about septic tanks & well water? If the nearby community expands your
way, you may get a notice in the mail that says "We're hooking you up to
the new city sewer. Please send us a check for $7,200 by next Friday."
(Don't laugh. This happens.)

I'm a city boy who moved to a small place in the country (~3 acres)
about 5 months ago. Despite the headaches (people think living in the
country is CHEAP. It's not.), I wouldn't trade it for anything, except
maybe some more acreage.
_________________________________________________________________________

******** END OF SUMMARY **************

Your humble summary editor has been:
=======================
scotbri@rosemount.com
Scott Brigham
Rosemount, Inc.
Eden Prairie, MN
=======================