OT Buying acreage/home

What would be some of the things to watch for and ask. First time purchasing anything other than a vehicle. Living on an acreage now and raised on farm before. Thirty eight years old with wife and two kids. I do a little tractor repair for extra work and work as a mechanic for roads department, wife works also. Haven't looked at the house yet but looks good, plenty of out buildings and is 15 acres total. Land is rolling hills all grass/pasture and good windbreaks. One friend asked if there was a loan against it, and don't know yet. Seller bought it in 2003 for $131,000. Hes asking 170 now wanted 180 a year ago. I know land has gone up and he hasn't done much to the place. And seems around here the people with horses are thinning out. Would like to know you've run into when purchasing. This would give me a little more room for working a 42 and 37 JD A, Moline 4 star, and my 42 IH H. thanks chris

best advice, get a good attorney that handles real estate. he/she will handle the transaction for you, on your behalf. cost you from 300-500 dollars. money well spent. they will get the surveys, title searches, ect.

Glennster hit the nail on the head. You will thank him 1000 times over for this advise.

My thoughts about the need for a "good attorney" are a little different. That is not much different than saying "get a good tractor mechanic." First, how do you know which one is good? I've dealt with some that were very good in their chosen field and others that were incompetent idiots. Having a license to practice law does not guarantee anything - except they will charge you a fee.

Also, most attorneys don't do their own title searches. They just hire someone else and charge a fee for being the go-between. So, I've got some mixed feelings on that also. I've worked as a title searcher, so I have some exeperience on the matter.

If you don't feel comfortable doing the work yourself, and know a lawyer you trust that has real estate experience - then that might be best for you. But, doing the research is not difficult, and often the County Clerk will help you for free. In most properties I've bought, my search was much better and thorough then what the previous title company or any attorneys had done.

If it were me (and I've bought many rural properties), I'd go to the county clerks records room and read the deed. That will tell you of the most obvious deed restrictions if they exist, recorded exisiting easements, property description, etc. I'm amazed at how many people never do this - and it should be the first thing. And, it's free. If anything is in question, you can use the free index of grantors and grantees and follow the line of previous owners - usually way back to when the county was first founded (1795 where I live).
You can also check (for free) the mortgagor/morgagee indexes.
You can also research the current owner's name for leins against him, law suits, etc.
You can also check with the County Treasurer to check on tax payment status and history.
You also ought to see if this property has a warranty deed, and if so - who warranteed it.
Usually a local title company. They will likely have an "abstract" that will give you some history on the property.
I'd also go to the Town Clerk, find out exacty how the land is classified, and then find out what code, use, and building regs and restrictions might apply. Don't buy and find out later. I looked at some rural land recently in northern Michigan and found out that #1 no farm animals were allowed, and #2 no pole buildings allowed unless a residential home was built first. Not the sort of thing you'd expect in a rural area.

Find a disclosure form somewhere andownload it. Or get one from your local pal who is a RE Broker. Then sit down with the owner and go through it. FInd out the current appraisal and taxes are. Find out if it will be reappraised when you buy it.
CHeck the property for mining/mineral rights.
Check to see if the property is in a zoned area. If so get a copy of the municipal or county zoning ordinance.
Talk to a couple neighbors re any covenants or association bylaws.
If after this you are still interested offer your broker pal a fee to write up an offer for you.

Gordo

Gordo

I'm not a realtor or an attorney, but do agree with the advice of jdemaris and to get an attorney that KNOWS Real Estate, and that you can trust.
Couple of things our attorney brought up that I hadn't thought of were:
1) Mineral rights and any underground mines under the property. We live in central Illinois that was previously mined, and worry is future mine subsidence.
2) any old farmer trash dumps/landfills/toxic material spills? EPA is getting tougher all the time....
3) Rights-of-ways granted to others?

Lastly, if you're 38 with a wife and kids:
do you have a will?
Power of attorney?
Plan on who would take care of the kids if you and your wife die?
If not, these are other good reasons to search for an attorney you can TRUST!!

Best Wishes!!
John

No farm animals? What county and township was that J? I can see the no pole building before a house thing if it's residential property. Our township has the same rule to keep somebody from ONLY building a pole barn,but NO ANIMALS? We have right to farm laws here that guarantee that kind of thing. Local laws can't override right to farm.

Things you run into when purchasing you ask???????? As an Attorney and Real Estate Broker over the years and one who bought and sold several tracts of land, I can offer a professional "Opinion" albeit NOT researched and not aware of all the facts and your local conditions SO NO WARRANTY, my advice or any opinions here are worth just what you paid NOTHING LOL. Still, no harm in seeking out opinions and most here are well intentioned and can indeed provide valuable help......

BEFORE you pay big bucks for Real Estate, things you need to know are, but not limited to:

1.) Are there mortgages, liens (tax, mechanics judgment etc) or other encumbrances EITHER a) Of record or B) Those one can find by a reasonable inspection

2.) Are there any recorded easements or implied easements??? Are there any mineral or timber etc rights reserved or gas or coal leases??

3.) Is the residence or any buildings located WITHIN THE PROPERTY BOUNDARIES?? Thats what a Location (Mortgage) Survey can reveal.

4.) Whats the current ZONING

5) What rights and condition and quality of Title does the seller actually have????????

6) In your area is an Abstract and Attorneys Opinion utilized or is Title Insurance the norm???

7) Are you going to purchase and get a Warranty Deed right off or considering a Conditional Land Sales Contract or Purchase Money Mortgage or what??

On and on I could fill the forum BUT IM SURE YOURE GETTING THE IDEA

Heres the "deal" In the event you require a Mortgage, before the bank sticks their neck out THEY ARE GOING TO MAKE SURE OF ALL THE ABOVE, at your expense, of course so most of these concerns will be discovered and answered. Often a local Attorney and/or an Abstracter will search out all the above and then EITHER (local practice) render a Professional Opinion of Title, or else use an underwriter to sell you a Policy of Title Insurance. One problem with that is some real estate brokers and "some" bankers may or may NOT be aware of is any problems the insurance company is afraid of, they exempt in the A or B exceptions which many real estste brokers may not even read or make you aware of........

BUTTTTTTTTTTT dont let this scare you, real estste is usually bought n sold with no problems

MY BEST FREE ADVICE IS TO HIRE A LOCAL ATTORNEY WHO WORKS IN THE AREA OF REAL ESTATE LAW and dont rely too much on advice from others including myself who is NOT familiar with your laws and the practices in your locality. You shouldnt risk $170,000 on advice found here!!!

Best Wishes and God Bless I hope it works out for you, Im NOT trying to scare you, just giving you my best honest professional and experienced advice

John T BSEE, JD Attorney at Law

Around here most real estate transactions are handled by the realtors and brokers and the title insurance company they use for the title work.

Their forms are incomplete. They handle the usual inspections and disclaimers for termites, code inspections for electrical, plumbing, and mechanical systems and operation, mold and mildew inspections, lead paint, radon gas, etc. Get those inspections but usually the inspectors have so many disclaimers in their contracts, you can't go back on them very easy or cheaply. Same goes for the prior owners.

What they don't cover and deed searches don't show is things like water rights and who owns them (you may not get to drill a water well), mineral rights and oil leases, easements (read them) and where they are exactly located which limits your ability to build something on them and what the easement holder may be able tear up when they fix their line/pipe, EPA issues such as was there an old gas station there back in the 1930's to 60's that has or had leaky tanks just waiting to make your place an expensive EPA superfund site), historical sites there or nearby that may limit your right to build and repair, how its zoned and local zoning and subdivision rules and setbacks that may limit your right to have a repair shop or other business there such as horse boarding and also limit your right to build another home or move a trailer in for a kid, your local building codes and whether some repair to the electrical or plumbing is going to require a major rebuild to meet the latest code, etc.

I have a multiple page sales agreement but when I tell someone about all this, it always scares people off who just want to keep it simple. No such thing as simple but that is what they want. It's always the calls I get later about the mold or the county won't let them add a trailer for their son without a 40 acre minumum, etc. By then it is too late. Most of the stuff I mentioned is not something a lawyer can do cheaply, you have to get out and do your own leg work, and many people don't bother. Then they come crying to me for such things like the county won't let them keep more than 3 dogs without a kennel license and they aren't zoned for it or the zoning has changed with the previous owner grandfathered in and the grandfather clause doesn't apply to new owners.

Let the buyer beware and be forewarned. Then think things through with all future plans for the place. Then go out and do your do diligence.

Good luck.

Sure they can. Right-to-farm laws do not have jurisdiction over town land-use regs. Also, right to farm laws only apply to recognized farmers. Not everyday people who want to start farming in an area where is not an allowed use. It is NOT a right to farm anywhere anybody wants. It is MORE a right of an existing farmer to keep on farming. And, these laws differ throughout the country. We have "right to farm laws" here in central New York also. I live in a dairy farming area. That being said, nobody who lives within the borders of the "hamlet" of our town is allowed to have any farm animals, unless they did so continuously before the laws were put in place. And, there have been many fights because of it. There are still two operating dairy farms within the hamlet borders. But, they are grandfathered in. That means if any one of those farms - stops farming for 12 months - they lose the right to farm forever.

I've looked at many rural properties in Michigan that did not allow farm animals. Last one I backed out of buying was just outside of Alpena, in Alpena County. Township of Maple Ridge.

In regard to the "no polebarn" laws , for the most part, they seem rediculous to me. If I was to buy rural land to build my own house on - the first thing I'd need would be a barn to park my equipment and tools in - to keep out of the weather. Not everybody hires contractors to build. Some of us still do our own work, do so slowly, and need a place to keep equipment while doing so.

Wow,think I'll stay out of the "tip of the mit". those people are more nuts up there than they are in the REST of this misserable state. Sounds like a bunch of down staters have moved up there and took over.

All the other comments are good. This comment might be a little off target, but I think he is asking a rather agressive price considering the economy. I don't know where you are, but here in southern Missouri, land prices were ridiculously high from about 2003 up to late 2007. Since then they have plummeted to more reasonable levels. You might want to think long and hard about what he is asking for a price. Don't pay more than you have to, and NEVER make a real estate decision based on emotion.

Christopher

The reason the no pole barn rules is that too many people simply built a pole structure, and moved into it. Usually without any septic system or decent electrical hookup. We had a guy like that here, left a real mess when he left after a few years.

I just inherited 17 acres from my mom. i am in north carolina, i am having to go back three years and pay the back taxes from when the land was tax deferred farm land. seems crooked to me but I have no choice unless I want to sell. this land has been in the family from way back so selling is not on option. just saying to check out the tax situation where you are at, was told in north carolina the buyer has to pay these taxes,not the seller.

frank

John I do have a will, power of attorney, and wife's mom and brother will raise the kids. We just did it within the last year. thanks chris

There is a book entitled "Finding and Buying Your Place In the Country" by Les Scher. Get a copy and read it and you"ll know a lot about how to buy a country place.

Real estate agents are not the best sources of information as they are only interested in closing the sale.

Do youself and your family a favor and get this book and read it. It will save you a 1000 times more than it"s price.
(I am not the author nor do I have any connection to the author or recieve any thing for this recommendation. I bought the first edition of this book and I learned so much from it that I saved tens of thousadns of dollars when we bought our ranch.)

Having sold some lots and buying another one, I have some first hand experience with land purchases. A friend who used to have a realtors license told me the number one rule is to never trust a realtor. The real good and honest ones are few and far between. Make sure to get a real property report and have the property lines on all corners clearly identified. Never have the same realtor acting for both the buyer and seller, ever!!! Never have the same lawyer for the buyer and seller! I did on one lot but only because it was a very straight forward deal. Both parties were motivated and there were no problems at all on this lot. Most good lawyers wouldn't work for both parties.
In addition to what has been said, find out if there are any restrictions on the land or if the land is slated for future development. I looked at a piece of land that half of it was undevelopable because it was adjacent to a land fill. It was 109 acres but could never be subdivided and eventually would be taken over by the landfill. To do any building or development had to go through a lot more scrutiny than other lots. The seller figured that since the county would be adding it to the land fill, in the future, it would bring the price up. Wrong, why would the county give a higher assessment to a property it would eventually have to purchase? I didn't purchase this property.
Make sure that all approaches are up to county standards regarding width and culverts etc. Don't agree to accept anything that was required to be done by the current owner/seller unless it reflects a discount in the purchase price. Have this is writing clearly stating what is being done and what the compensation for it is. The land I purchased didn't have an approach and the access road was just dirt with no gravel. I agreed to put the approach in as long as long as I didn't have to pay for the upgrading the main (county) entrance road. The seller told me he "would take the county to task" for upgrading the main road but it wasn't in writing. I had to pay an additional $1500+ for upgrading the road. The approach was supposed to be put in by the seller when he subdivided. There is a $1500 hold back when subdividing for the approach off the main road. Even the public works manager said I should get the $1500 because I put the approach in. I explained the agreement I had with the seller to the county and they agreed I should get the $1500 but because I had initialled that I purchased the property without an approach, the seller would get the $1500. The approach is supposed to be completed within a year after subsdivision approval. This was 2 years after! The last thing and maybe the most important is to hold back some of the purchase money in case there are things you discover that you didn't agree to at the time the deal was made. Had I have done this or had a more experienced realtor, I would have saved at least $1500 and probably the equivelant of $3000. Hope this helps. I'd make a real low offer($140???), to start with and see how motivated the seller is. They could be really hurting due to the economy. You can always offer more at a later time. Sometimes a low offer with a big deposit will get you a property for less because it shows the seller you are serious. Good luck! Dave

Yes, I understand that, but basically it's a blanket rule made because of what a minority of people do, and NOT the majority. Like many laws, a few people do screwy things and everybody pays the price for it. A property seller lost out because I backed out of buying his land due to that insipid rule. I went over to the next township and bought instead (they don't have that law). I've understand the need to govern some land uses, but also am well aware how regs can be written to address such matters so they can be taken on a case by case basis - and not just dumped on everybody.

Some places in the western UP are even worse. How they got that way, I've got no idea.

A bank appraisal will tell you if they feel it is worth the $170,000. Around here they will run $400-450. It is the only appraisal that will matter cause they are the one's that will be loaning you the money. It doesen't matter what he paid for it when he bought it. His to sell now for whatever he can get for it. As the others said, check with the local zoning office to see what you can and can't do and a good title company should root out any questionable findings. Here, you cannot transfer title till the taxes have been paid on the entire piece of property being sold. Have the purchase agreement state who will pay the taxes and if you are given credit for them so you pay them, make sure you have the latest valuation that they will be based on when you do pay them. I got caught on that one recently. I new what the present taxes were but didn't find out till I got the tax bill that the valuation went from $2000 to $25000.

Most of Northern Mi has laws requiring you to build a house first. No outbuildings and no camping. They will tell you its for sanitary reasons. It might be partly but they want the tax base mostly. They get full taxes from people who own property but don't live there and can't claim homestead exemption.

Jerry

Whatever you do, consult a lawyer who specializes in real estate. You will sign a bunch of documents at closing. The part of lawyer's job is to make sure everything on paper is on the up and up. If something comes up later that he missed, say a lein, he gets to fix it on his dime. Do use a lawyer so you know what you're signing for and or away.

Quote, by the great G. Gordon Liddy

"When I was a young man this was a free Country."

He has a book with that title.

Matthies, As the others have said get a land attorney who specialize in Real Estate, or a Realator you trust, .......
GET A FULL HOME INSPECTION! Well, septic, especially!! NO Ifs, Ands, or Buts.
Fences,entrance road, if house is off the road more than 50 yds can be a haggeling point!
Check your area for Comperable properties to see if this guy is too high too low or spot on on his asking price. How is land in your area selling now in general? Only houses in town as a rule, an occasional acreage that has the right amminities, or is most Ag land not moving at all.
Taxes, are they current, or owe back taxes. Does it still have a Ag evaluation or has it been changed to Commercial? Outstanding deliquent loans against the property?
Just C.Y.A. as much as possible, get as much information as you can, so You and your wife can make the best decision possible. Hope this helps!
Later,
John A.

I should of mentioned I live in Northeast Nebraska, and the place is along a state highway,(and I work for the highway dept. so I'll ask them if they know of anything to look out for). I have a friend that deals in real estate and the lawyer in town was helpful last time I asked him something. thanks chris

All the above plus have it in the contract that you must be able to secure financ ing satisfactory to you or no deal. That means financing at your price and terms and interest rate. Talk to all neighbors and townspeople.

Each locality is a bit different. That's where a knowledgeable BUYERS real estate agent can be worth their commission. For example, you may have to have water rights to be able to have livestock on your property. Not a problem in the east but a huge problem out west. A local agent should know these things.

You don't say how you intend to finance it. If you're getting bank financing, they'll insist on title insurance (or an abstract in some locales). That will result in a title search and, should there be any encumbrances they don't find, insurance to defend the title from encumbrances. Even if you're paying cash, I would still certainly get title insurance.

A lender will also insist on an appraisal. If you're paying cash you don't need to get an appraisal, but you should do your homework on comparable sales. If you have a buyer's agent, they can pull recent sales for you.

"Plenty of outbuildings" could mean "plenty of maintenance that hasn't been" done. My experience with house inspections hasn't been great. Rather than a home inspector, I suggest you get a general contractor you trust to look over the property and buildings.

Wells and septic can be a big problem. The county health department is usually responsible for inspecting these items.

(quoted from post at 15:26:22 01/01/10) Some places in the western UP are even worse. How they got that way, I've got no idea.

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May I ask where? Never had any issues with any zoning regs in the area.

It's in Nebraska, loan people say since its over 10 acres it falls into a (farm operation) for a loan. But farm loan people say since it won't be used as an occupation it's more of an acreage, this also changes the interest rate for loan. Hasn't seen livestock for 10 years, other than cattle on fall corn stalks near by. Would rent pasture out to make some money. Closest neighbor over half mile away. Thanks chris

Find out about how many animals are allowed per acre and if there are specific rules regarding fencing. Dave