Buying a plot of land is an exciting process. After all, the possibilities are virtually endless– you can build your dream home and let your imagination run wild when landscaping.
However, there are plenty of factors that potential land buyers need to be aware of before embarking on the often-complicated process of buying a plot of land.
What should I know before buying a plot of land?
It’s a good idea to do as much research as possible before making an offer on a plot of land.
For instance, you should familiarize yourself with local zoning laws in order to ensure that you can use the land in the way that you want. If your chosen plot is zoned for commercial use, it might be difficult to get it rezoned for residential purposes, or vice versa.
If the plot of land is undeveloped, you should look into whether utility hookups are available. If they’re not, obtaining hookups could potentially be an expensive undertaking.
How much money should I set aside to purchase land?
The process of purchasing a plot of land works differently than the process of purchasing a home– especially financially.
When purchasing a home, you’re likely to be able to obtain a mortgage loan that allows you to pay a very low down payment on the home. This down payment is sometimes as low as 3-5%, especially through programs for first-time homebuyers.
When purchasing a plot of land, your lender of choice will be more likely to offer you a loan with a much higher down payment and interest rate.
That’s because purchasing a plot of land, especially one that’s undeveloped, is a much more complicated and risky endeavor than purchasing an existing home.
So when preparing to purchase a plot of land, you should expect and prepare for a whole lot of expenses. If you plan to build on the property, you’ll likely also have to pay for building permits.
What taxes will I have to pay on a plot of land?
Property taxes are an important aspect of owning land that motivated and excited buyers sometimes forget about. However, depending on where the land is located, property taxes might end up being a significant expense.
On top of the large down payment, cost of utility hookups, and building permit costs, the prospect of paying property taxes can sometimes turn into a dealbreaker.
Property taxes are a very important part of a functioning society– they’re used to pay for things that everyone enjoys. These include services like local police, fire services, and sanitation work like refuse collection.
How are property taxes determined for my plot of land?
The property taxes you’ll have to pay are calculated using a number of factors.
The most important factor in the process is the property’s value. This value is determined via an appraisal. If you’re purchasing the land, you’re already quite familiar with this amount!
How can I determine all of the expenses I’ll have with my new property?
Working with a licensed and experienced real estate agent, like the experts at Edge Realty, is a great way to enter the process of buying a plot of land fully informed and prepared for any expenses you might encounter.
To get started, drop us a line today!