Author Topic: How to buy land- seller interested, but figuring out next steps  (Read 1198 times)

essjay43

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How to buy land- seller interested, but figuring out next steps
« on: February 16, 2016, 02:47:08 PM »
I spoke with the owner of a piece of land in my town and he is interested in selling. I want to show him I'm serious without spending a lot of money or involving a real estate agent. Should I contact a lawyer to put together a formal bid? Ideally, I want to give them a formal offer and lay out the terms- small deposit, 45 days for due diligence, 20% down, and then 3 years at 7% with a balloon payment.

Should I consult a real estate lawyer this early in the process?

Another Reader

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Re: How to buy land- seller interested, but figuring out next steps
« Reply #1 on: February 16, 2016, 03:46:03 PM »
What you should do depends on what you intend to do with the land.  If you intend to build on it, in your shoes I would not invest a dime until you have investigated your plan with the local zoning agency and building department to see if it is feasible.  Once you determine your plan is feasible, you might make an offer contingent on obtaining the approvals for your project. IOW, you don't buy the property until you know you can build what you want.  That's commonly done in commercial development, especially where there is a lengthy and detailed approval process and the value of the land depends on the approval of the project.

Mr. Green

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Re: How to buy land- seller interested, but figuring out next steps
« Reply #2 on: February 16, 2016, 03:51:17 PM »
+1 to doing your due diligence. You want to make sure you can get electric, water, sewer or septic, the whole 9 yards. Don't buy something only to realize there's a problem later when you go to build. This is much easier if the property is in town because odds are many of those things are a given but you should still investigate.

If your loan would be seller financed, meaning no bank involved, land is the easiest real estate transaction you can make. A written contract is all you need, laying out the terms of the loan, and you take that to a title attorney for closing. The deposit is a bit trickier without a real estate agent. An RE agent will hold that deposit in escrow, making it easier for you to get your money back if you would bail during the contingency period. Not sure if a title attorney would do that for you. If you give the deposit directly to the seller, you bail, and they don't pay you back, you'd have to take legal action to get your money back.