Buying land

[jaymz]

I'm looking at some property I found online, it's raw land that has been split up. I drove out to check it out, the property is owned by a real estate agent and is surrounded by other raw properties - only a couple have been purchased so far.

My question is - is it worth it to get a realtor to represent me? I have some good advice on purchasing conditions that i would want satisfied before signing an agreement, but not sure if I should just deal with the seller directly myself or not.

Any advice would be appreciated.

[cbsmokin]

As a buyer the RA is paid for out of the sellers proceeds, so that it does not cost you anything. They will also have more information about comparable sales, etc. than you will. More importantly though is to make sure the land is something that you can build on and get utilities, etc.

Not having a RA may allow you to negotiate a slightly lower price though. The more the land costs, the more I would recommend a RA be involved.

[captain53]

Real Estate Agents are hit or miss as to value. If you can find a well qualified one it could prove very worth while. Keep in mind that urban house agents usually know little or nothing about land, you would need to seek out a highly experienced specialized land agent in the area to have any real advice. :2

When shopping undeveloped land proceed with extreme caution, there are a lot of major issues to beware of.:2

[yourchoice]

As stated, the seller's side typically pays the commission to the buyer's agent. I would recommend hiring an agent unless you know the agent who owns the property is also the broker of record for their agency. If not, the seller will only have so much control when it comes to how much you can save. If yes then I may recommend hiring a real estate attorney for your side if you can negotiate the price down based on the absense of a buyer's agent. Regardless, you may want to hire an attorney anyway.

If you do hire an attorney, hire him/her early, for contract review. It amazes me how many people hire an attorney for settlement only when everything (charges) have already been decided in the contract. Now is the time to negotiate those things, not at the table.

Basically, I suggest representation of some sort unless you're experienced in land development.

Good luck!

[cbsmokin]

If the property is in FL, the state has regulated Title Insurance rates and most escrow agents will be pretty competitive with fees among one and other. If you are obtaining a loan it is where your fees will vary a lot. I have an office in FL and am authorized to close loans there. I can review any GFE you are given and at least let you know if your fees are somewhat normal. Feel free to PM me.

[jaymz]

Thanks for the advice so far, not sure if it matters in relation to your responses, but most likely this would be a cash transaction. (so no mortgage / bank / escrow involvement)

[captain53]

Thanks for the advice so far, not sure if it matters in relation to your responses, but most likely this would be a cash transaction. (so no mortgage / bank / escrow involvement)

All the suggestions would still apply.:tu

[BigFrank]

When shopping undeveloped land proceed with extreme caution, there are a lot of major issues to beware of.:2
Good point. Friend purchased some property to build his cabin on. No water even by well. So now he's going to drop a couple bills to get a rain collection system for his cabins water. Something they "left" out when they sold him the property.

[mosesbotbol]

If you have to pay a comission to a buyer's agent is not worth it. What is worth it is a RE attorney to make sure you will be able to develop the property to your intention.

Zoning and by-laws can make or break a deal. Also, do your research to decide an offer price. Buy title insurance for the closing to CYA down the road.

[MTB996]

I highly recommend getting an agent, but get one who specializes in land in the area where you are looking. Most of the good agents are experts in everything you need to know (soil, septic, water, development, protected watersheds, etc.). The bad agents aren't worth shooting, so the trick is to interview several and check references.

good luck, been looking lately myself and its a long and patient process.

[jmsremax]

If you have to pay a comission to a buyer's agent is not worth it. What is worth it is a RE attorney to make sure you will be able to develop the property to your intention.

Zoning and by-laws can make or break a deal. Also, do your research to decide an offer price. Buy title insurance for the closing to CYA down the road.

:tpd:


Being a real estate agent and investor (having owned land myself) I would not use an agent unless the land is part of a development where homes are already being built. Use a real estate lawyer and look at the property lines, the zoning laws of property, etc to make sure if you decide to build on this there aren't any restrictions. Also, make sure the sewers and water lines are already tied into the property. Good luck with the purchase.

[jaymz]

In case anyone is interested, this is the list of notes I've collected so far:


* Get a Lawyer earlier than later

* Talk to the county/city zoning people. confirm there is no building restrictions that restrict what you want to do

* Confirm that a perk test has been done. Someone also suggested getting "Raw Land Evaluation" done, as that was "better". I have not figured out what was meant by that exactly.

* Have the DNR come out and do a Wetland Determination to confirm possible building locations

* Confirm and review land survey

* Definitely purchase Title insurance

* figure out a realistic Tax estimate

* Easement and common property maintenance agreement

* Research Other raw land purchase prices in the area recently.

* Determine mineral rights status

* Determine water status for wells

[Cigary]

:tpd:


Being a real estate agent and investor (having owned land myself) I would not use an agent unless the land is part of a development where homes are already being built. Use a real estate lawyer and look at the property lines, the zoning laws of property, etc to make sure if you decide to build on this there aren't any restrictions. Also, make sure the sewers and water lines are already tied into the property. Good luck with the purchase.

Bingo on all of this as raw land is not like commercial property.

Guaranteed Access
Easements
Any Restrictions

Check with a Land Specialist who actually lives in the area

[SvilleKid]

OK, the BIGGIE no one has touched on: You MUST be aware of the Agency Laws in the property's state as it relates to Real Estate Agents. For example, in Alabama, unless the agent is EXPRESSLY the agent for the buyer, the agent will be the seller's agent. If you go to an agent other than the one selling the property, and have that agent show you the property, but you do not have an agency agreement with the showing agent binding him only to you, the showing agent is nothing more than a sub agent for the benefit of the seller. That agent (as well as the listing agent) owe their responsibility to the seller, NOT to the buyer. That agent IS NOT in a legal position to help you to the detriment of the seller. That would result in a violation of his fiduciary duty to the seller. Anything you told such a sub-agent about your buying strategies would be passed on to the seller, but anything the seller told that agent about his selling strategies would have to stay confidential, unless the seller gave permission to disclose. That's basic principal-agency law, and probably exist in most states.

Only if the agent working for you has signed an exclusive buyer's agency agreement with you that makes him yours and only yours, he will most likely simply be another agent representing the seller. And if the agent is a buyer's agent, the fee paid to him/her will be dictated by the agent's agreement with YOU, not the seller. Which means any commission paid the buyer's agent cannot be taken from the seller's due at closing, unless that fee is written into the sales contract and agreed on by the seller (which means the seller might be paying double commissions - not very likely unless the selling agent cuts or shares his commission.

One of the biggest misconceptions in real estate transactions is thinking that that agent you contacted to show you around and help you get a good deal is working for you!! This bites both buyers and agents more than any other thing. Without a specific buyer's agency agreement with that agent, he is most likely bound by law as a seller's representative. This bites agents in the arse big time when they disclose information to a potential buyer that the seller has told them in confidence, not realizing that telling a potential buyer is a violation of the agent's duty to the seller.

Bottom line: Check your state's laws on the agency/principal relation in real estate. Most states now allow buyer agency agreements, but up until probably less than 15 years ago, almost all real estate agents in a sales transaction actually represented the seller, whether they acted like it or not. If buyer agencies are allowed, you have to have that relationship and responsibilities spelled out in writing and signed by you and the buyer's agent. Including how/when the buyer's agent will be paid.

And nope, I'm not a lawyer. But was an agent for many years, and real estate is still my profession (R.E. Appraiser).