Buying Land? 10 Points to Keep in Mind
Buying land in a foreign country can be very rewarding and exciting. Perhaps you wish to build your dream home from the ground up, or maybe try your hand at farming.
Prior to diving in head first with a land purchase, have a read of our 10 points to keep in mind before taking the plunge.
1. Previous Owners – Ensure your attorney investigates past title transfers, especially if the land was owned by multiple people or was seized. You want to make certain that transfers were done and done properly.
2. Can You Own It? – Not all countries allow foreigners to own land. There may be restrictions on how much land you can own, the type of land or how close it is to another country’s border. It’s possible you will require a letter from the government authorizing the purchase.
3. Build Specifications – Depending on where you purchase your land, you may have guidelines to stay within. If you purchase a lot within a community, from a developer, you will likely have to build within a specific timeframe. In addition, you may be required to follow building designs, including height and size, particular to the development.
4. Accessibility – You always want to make sure you have easy access to your property. If it’s through a right-of-way, ensure you’ve covered your bases and that it’s included in the deed. You also want to double-check whether anyone else has access to your land. It’s possible that they have attained legal rights if they’ve been following the route across your property for long enough.
5. Usability – This is an important point if your plan is to farm the land you purchase. You’ll want to have your attorney check with the municipality and the deed to confirm there are no limitations on the land, such as environmental protection. Also, have a professional conduct a soil analysis to confirm drainage and quality – important if you’re looking to raise animals or grow food or grains.
6. Property Lines – Make sure you receive a survey or have one done to confirm your boundaries. This is especially necessary when you are purchasing a large parcel of land and are paying by the acre. You want to make sure you’re receiving all of the land you’ve paid for.
7. Pricing – We’ve talked in other articles about making sure you’re receiving fair market value on your home purchase, and buying land is no different. See if your attorney is familiar with other properties that have recently sold in the area, or do some research yourself. Either way, you want to make sure you’re not paying an inflated price that the owner has pulled out of his sleeve.
8. Title – You want to make sure you can get freehold title (fee simple); the safest most secure form of ownership. Quite often, you’ll require infrastructure (water, roads, electricity) to be in place before you can get title. If you’re purchasing a lot from a developer, ensure that a portion of the payment is held back until the infrastructure is in place.
9. Liens and Taxes – Your attorney needs to make sure that the property you’re buying is free and clear of debt or outstanding mortgages owed by the seller. It’s also good due diligence to find out what your property taxes will be.
10. Infrastructure – Whether purchasing a lot in a private community or a parcel of acreage, you need to confirm that the water and sewage treatment systems comply with local rules. If water isn’t currently in place, you’ll want to find out how much it will cost to bring it in, and perhaps even add a guarantee of water as a condition of closing the deal. This applies to electricity as well – is it already in place? Is it reliable? In addition, if cable TV, high-speed internet and cell service are important to you, ensure they are either in place or easy to install before signing on the dotted line.
Buying a vacant lot or parcel of land can have many benefits if you’re looking to create your own, personal piece of paradise. Just remember that there are many areas to research before inking a deal, and it should be a stress-free experience.