5 Must-do steps before buying land

Buying land can be an exciting and rewarding investment, whether you plan to build your dream home, start a farm, or simply hold it as a long-term asset. However, purchasing land is not as straightforward as buying a house. There are unique considerations and potential pitfalls that can cost you thousands of dollars if you’re not careful. To help you make an informed decision, here are the 5 must-do steps before buying a piece of land.

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What you need to know before buying land: A complete guide

1. Research the land’s history and environmental concerns

Before committing to a purchase, it’s crucial to investigate the land’s history and any potential environmental issues. One of the most important things to check is whether the property is listed as a Superfund site. Superfund sites are areas designated by the Environmental Protection Agency (EPA) as contaminated due to past industrial or hazardous waste activities.

Why it matters: Contaminants in the soil or water can pose serious health risks and limit what you can do with the land. For example, you may not be able to drill a well or build a home if the land is contaminated.

How to check: Visit the EPA’s Superfund website or use local resources like your county library to research the property. Look for reports on soil and water quality, especially if you plan to live on the land.

Additionally, be aware of fracking activities in the area. Fracking involves drilling deep into the ground to extract natural gas, which can affect the land’s stability and water supply. Even if you’re comfortable with fracking, future buyers might not be, which could impact resale value.

2. Understand zoning laws, deed restrictions, and covenants

Not all land is created equal, and what you can do with a property depends on local zoning laws and any deed restrictions or covenants.

Zoning laws: These regulations dictate how the land can be used—whether for residential, commercial, agricultural, or industrial purposes. For example, you may not be allowed to build a home on land zoned for agricultural use.

Deed restrictions and covenants: These are rules set by previous owners or developers that limit how the land can be used. For instance, there may be restrictions on the size or type of home you can build, or prohibitions on raising livestock like chickens or cows.

Pro tip: Always request a copy of the deed restrictions and covenants before buying. If you’re unsure about the rules, consult a real estate attorney to avoid costly mistakes.

3. Get a survey and check for encroachments

A land survey is essential to determine the exact boundaries of the property and identify any encroachments or easements.

Encroachments: These occur when a neighbor’s structure (like a fence, shed, or driveway) crosses onto your property. Without a survey, you might not realise there’s an issue until it’s too late.

Easements: These are legal rights granted to others to use part of your land, such as for utility lines or access roads.

Servitudes: These are rights reserved by the government or utility companies for things like power lines or sewer systems.

Why it matters: A survey ensures you know exactly what you’re buying and can address any boundary disputes before closing. If the existing survey is outdated (20+ years old), consider getting a new one to avoid surprises.

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4. Invest in title insurance

Title insurance is a one-time purchase that protects you from legal disputes over ownership of the land.

Why it matters: If someone claims they have a right to the property (e.g., due to unpaid taxes or a previous owner’s debt), title insurance covers your legal costs and ensures you keep the land.
Cost: For a US$100,000 property, title insurance typically costs less than US$600—a small price for peace of mind.

Pro tip: Even if the seller offers to pay for title insurance, make sure it’s included in the contract.

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5. Talk to the neighbours and research flood zones

Before finalising your purchase, take the time to talk to neighbours and research the area’s flood risk.

Neighbours: They can provide valuable insights about the land’s history, local issues, and community dynamics. For example, they might know if the land was previously used for industrial purposes or if there are recurring problems like flooding.

Flood zones: Check the property’s flood zone classification (A, B, or C). Zone A is the highest risk, while Zone C is the lowest. Even if the land looks picturesque with a creek or stream, it could be prone to flooding.

Pro tip: Use tools like FEMA’s Flood Map Service Center to research flood zones and assess your risk.

Bonus tip: Explore owner financing options

If you don’t want to involve a bank or have less-than-perfect credit, consider owner financing. This arrangement allows you to buy the land directly from the seller, often with a small down payment (e.g., 10% of the purchase price) and flexible terms.

How it works: The seller acts as the lender, and you make monthly payments over a set period (typically 15–20 years). The deed and title are transferred to you once the land is paid off.

Benefits: No credit check, lower upfront costs, and negotiable terms.

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Final thoughts

Buying land is a significant investment, and due diligence is key to avoiding costly mistakes. By following these 5 steps—researching the land’s history, understanding zoning laws, getting a survey, investing in title insurance, and talking to neighbours—you can make an informed decision and secure a property that meets your needs.

Remember, the goal is to uncover any potential issues before you sign on the dotted line. Use this checklist as your guide, and don’t hesitate to consult professionals like real estate agents, surveyors, or attorneys to ensure a smooth transaction.

Ready to start your land-buying journey? Take these steps to heart, and you’ll be well on your way to owning a piece of land that’s perfect for your dreams. Happy investing!

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