Buying any piece of property is not a gamble game and if you take it as such, you will lose. Land is a serious issue everywhere, simply because of the value it holds as an important resource.
Families and individuals value land for the deep reason of family property/ legacy to be inherited. Companies and institutions on the other hand value land as a resource for their economic growth. And, that’s why most people use land as collateral to acquire funding such as mortgage from financial institutions.
We don’t buy land every day and for that reason, most people are not experienced in the land buying process. Therefore, most first-time land buyers are bound to make some costly mistakes due to a lack of knowledge. Not to say that experienced buyers do not make these mistakes, they do.
When buying land, either for personal, commercial use, or investment purposes, there are things you need to know. If you don’t know some of these things, you are highly setting yourself up for trouble later on after acquiring the land.
You might later realize that the land does not serve the purpose you had for it may be due to location factors.
You stand a risk of losing the land to someone else or to an institution without getting anything in return. On the extreme end, you might get into legal issues you didn’t see coming because you didn’t do due diligence.
What is your purpose for the land?
People acquire land for different reasons and putting your reason(s) into consideration is very key. Putting your purpose into consideration will guide you into getting the right/perfect piece of land to meet your needs.
You might be needing land to use as an investment option. Maybe you want to acquire land and later sell it at a higher price when the value appreciates.
Perhaps you want to use it for income reasons either by building rental building – residential or commercial buildings.
Your purpose for the land will determine the location and the capital.
Therefore, as you look for a piece of land to buy, look for one that will fit your purpose and need.
Where is the land located? Inspect the land.
There is so much you need to think through when it comes to a land’s location.
Understanding where your land is situated will help you know whether it will serve you and your need for the land.
If you want a piece of land to build residential property for rental, consider the accessibility of the land with transport in mind.
Know the neighborhood of the land in terms of what the surrounding is like. E.g. is the area developed and are there ongoing development projects?
Think of the amenities available such as schools, health facilities, shopping centers, roads, worship places, etc.
Find out the topography of the land if you want to use the land for farming or if the land is a flood plain. In short, is the soil and the land structure suitable for farming? Think of what you will need for farming, e.g. where is the nearest source of water?
Inspect the piece of land and find out what neighboring landowners are doing or have done with their land. That should be able to give you the much-needed answers.
Think of the development potential of the area and your land. Also, consider the appreciation of the property you put on the land.
You need to find out the property lines surrounding the land. Get to know where one piece of land starts and ends.
Find a land surveyor to show you the property lines and mark them for you. This helps mark the property boundaries avoiding legal charges/ costs of trespassing.
What is the ownership history of this land?
Land ownership is very crucial when it comes to real estate. And, before you pay any amount of money for a property, find out who legally owns it.
Get the ownership history of the land – who owned the land before and if they are the ones you are in contact with. Imagine finding out later that the land was used for collateral by the owner. You could lose the land to a bank a short while later having paid for it already.
Many people get duped in land deals and lose their money or even get into legal issues without knowing.
Do the due diligence and search for the rightful owner of the land and if the land is legally ‘allowed’ to be sold.
Visit the county land authority offices and find out if there is an existing claim on the land to avoid future ownership disputes.
Doing a title deed search.
This goes hand in hand with finding out the ownership history of the land you want to buy.
If you are not buying a big piece of land and you are getting a small plot, you need to be more cautious.
There is a high possibility that the piece of plot you want to buy is part of an initially bigger piece of land. Therefore, the plot is one of several subdivided plots.
If you are not careful, you might find out way later that you don’t own the land on paper. Make sure you do a title search and get your own title deed for the specific plot you are getting.
Who is selling this piece of land?
You are probably buying the land from an individual owner or from a real estate company. Most of the time, advisors recommend individuals to buy land from a real estate company for a few good reasons.
When you are buying land from a real estate company, it is easier to do your due diligence. It can be a little difficult doing due diligence on an individual because you are solely dependent on their word. Maybe the land is not theirs even with the presence of a title deed.
A registered real estate company has many pieces of land and with that, you have a variety to choose from. Comparing to an individual, they probably have one piece of land and you have to find other individuals to get a variety.
Besides, if anything would go wrong, it’s easier to go back to a real estate company than to an individual.
Don’t make the buying decision in a hurry.
As they say, ‘hurry hurry has no blessing’. Cliché, but very true.
Making the land buying decision in a hurry is very costly than most people know. Just because the offer is so good considering the price of the property doesn’t mean you have to buy now.
This is how most people not doing their due diligence and even get duped.
When you are in a hurry, you don’t get the time to thoroughly go through the terms of the contract or the agreement. That’s how you miss noticing or understanding important aspects.
You will not take your time to ask or find out important details about the land’s ownership, title deeds, etc.
Most people lose their money by simply making the buying decision in a hurry. Do your due diligence on the land before you sign off your cheque.
Make sure you put important things on check before you decide to buy any piece of land. Crosscheck all you need to crosscheck before taking any offer.
The process of buying land requires patience and cautiousness if you want the best.
Doing your diligence will help you avoid some mistakes made out of ignorance and avoid regrets and losing money.
Know why you want to get the land and find a location that will serve your needs. Find out who rightfully owns the land to get the right title deed for the land.
Figure out what works best for you between buying land from an individual or from a registered real estate company. Lastly, don’t make any buying decision in a hurry as this is how you end up losing money and regretting it.
In short, avoid buying a piece of land with a blind eye.