Article: It's impossible to identify and assess every sort of risk and delay, but pursuing a program of due diligence can minimize that risk. This usually means hiring several experts to conduct inspections and make inquiries on your behalf. Due diligence takes time and money, which usually comes in the form of an inspection and feasibility study. Make sure to stipulate the amount of days needed to conduct the study and inspection in the offer. The details of this period, and what rights you have during the process, are negotiated between you, the seller, and both of your respective agents. You may be asked to put down some form of financial deposit, sometimes known as earnest money, typically about 1% of the purchase price. Because due diligence is very expensive, you should request that the seller pay for at least part of your due diligence costs in case something comes up in the process that means you no longer wish to purchase the land. These requests are generally presented with the offer. Even if the seller or real estate agent offers a survey of the land, contract your own surveyor or civil engineer as well. Rural plots can be uneven in size and shape and uninformed buyers or agents might miss certain pitfalls when surveying the land. Know the soil, the topography, the potential value, and where and how you can build. If you have the property surveyed then you may purchase extended title insurance which will protect you against boundary issues. A plat is a map, drawn to scale, of your land that shows the size, shape, and location of your property. Plats are not drawn by private entities, but public works departments and urban planning organizations. They are more informative and legally binding than the standard survey. Liens are notices attached to property that tell whether the owner owes money to a creditor. These are public record, and can be obtained from a county records office. A lien on a property can delay your purchase for months or years depending on the type of lien, so be aware. These departments can address specific questions about the land you're considering buying, and give you insight as to whether your building plans would work for the area. Ask the Building Office whether the lot is buildable, if there are any existing restrictions on the size of buildings, whether roads surrounding the property are publicly paved and maintained, and what permits, fees, and costs are required. Ask the Planning and Zoning Office how and if the property is zoned, whether your planned use for the lot complies with zoning restrictions, whether there are any restrictions due to environmentally protected areas like wetlands, and how much lot coverage is allowed? The health department can really solidify the specifics of any plans you have for wells and septic systems, and alert you to any potential dangers of installing them in the area. Ask if tower service is available and what the costs are, what kind of septic systems are permitted, what tests are required, and what time of year they can be performed. Look out for potential problems. Ask whether the area you're looking in has trouble with high water tables or poor soils for septic systems, and whether there are any known problems with water quality in your area. Utility companies can answer questions about access to electricity and other modern amenities. Check if natural gas can be brought to the lot, and what the costs are. What are the options for cell phones, internet, and television? Environmental restrictions can really throw a snag in building plans, so make sure you know of any going in. The DEP can answer these questions head on. You should also ask them to explain any former use of the land, specifically for environmental issues. If you plan to install a well, speak to more than one driller and then check with the DEP to see if there are any well water issues in your immediate surrounding area. Asks about costs, flow rates, depth of neighboring wells, labor and material costs, and if there are any well water problems in neighboring areas. If your due diligence process does not reveal any major issues and your lawyer agrees that the purchase is a good one, close on your purchase. Depending on where you live, the procedures may vary, and your lawyer and real estate agent will walk you through them. In general, you can expect to see at least the following documents: A land contract. This lists the address of the property and includes a full legal description, including its location, any liens, easements, or other conditions, and the financial information such as purchase price, down payment amount, and number and amounts of monthly payments. The deed. This transfers the legal title to the property from the seller to you. You will sign this when you close on the purchase. A closing statement. An escrow officer or your lawyer can draft this document, which shows the debits and credits for you and the seller as agreed in the contract. For example, it may include an "amortization schedule" that specifies how many payments, in what amount, will pay off the amount you owe on the land.
What is a summary of what this article is about?
Practice due diligence. Ask the seller to pay for part of these costs. Hire a surveyor. Check the plat. Be aware of any existing liens. Make a trip to the town or county offices of Building and of Planning and Zoning. Go to the county Health Department. Seek out utility companies in the area. Talk to the Department of Environmental Protection. Close on the property.