Country Property Purchases – Steps of a Smart Buyer!

Congratulations on your desire to own rural property. There are few things in life that provide the sense of well being, security, and pride of ownership than that of owning and working your own piece of land. Secondly in the long run it will prove to be a very sound investment. But like any investment, there are concrete steps that should be taken to ensure that the investment will pay the kind of personal and financial dividends that you are seeking.

Step one is to research different areas to find the one that fits your needs. Consider things like proximity to shopping, schools, entertainment, and job opportunities. Consider the political, economic, and social makeup of the community. And consider the more obvious things like climate and natural beauty. Don’t purchase on a whim, do your research. Next, develop a relationship with a local, knowledgeable, reputable, real estate professional. Real estate transactions are complex and your local real estate professional has the knowledge to help you through the process.

Second, look at several properties in the area, and narrow down the features that are important to you in the purchase of a property. While there may be things you will not compromise on, many times you will need to make some compromises to find the property that fits your primary needs and wants. Things to keep in mind are access, utilities, water, soils, exposure, geology, land title and other amenities.

Third, research the market to assure yourself that you are not overpaying. This is done primarily by comparing the property to other properties that have sold in the area. Country property is not as cut and dried in the comparisons as suburban homes, so ask your agent to provide comparable sales that have general similarities and discuss with them how those properties compare with the property you are interested in and their opinion of the price differences. Find out if the market is a seller’s market, a buyer’s market or a stable market. Other market factors to consider are the days on the market for the property of interest and current market trends on asking versus selling price.

Next, when you make an offer on a property, build into the offer a reasonable due diligence or inspection period. This gives you a period of time to investigate the property and if, for any reason it doesn’t meet your needs, you can cancel the escrow and your deposit will be refunded. This is a critical step to protecting yourself, and making sure that the property fits your needs. Some of the major things to research are:

1.) Title – Make sure that you review the title and know of any easements, Covenants, Conditions and Restrictions, leases, or lawsuits that affect the property. It is important to then determine if these work for you and your plans. Also make sure that any financial liens or obligations of past owners are paid off in escrow. – Deal with a reputable Title Company and Escrow Company! One extra note of caution, a neighbor may have acquired a claim to a right on the property by extended use of a road, trail, or spring. Only a discussion with the owner and the neighbors can help you determine if this is the case. If a road or well used hiking or riding trail goes across the property you are buying, beware of this possibility.

2.) Zoning and other Governmental Restrictions – Your land is yours to use as you desire, subject to government regulations. Contact the County Planning and Building department to determine government restrictions, and how they may affect you.

3.) Check out the water!! Water is such a critical element in developing a property and most rural properties are not on a community water system. This means having a well or developing a spring. If the property has a well or spring have them tested for both quantity and quality by a reputable pump company or spring development company. Discuss how the water results fit your needs. It is also important to understand the type of water system and the associated costs. If there is no water source, drill a well in escrow, as a contingency of your purchase and again test it for quantity and quality. Also, if you plan to use water from any pond or stream on the property, look into water rights issues.

4.) Check out the soils. Soils tests can be done for several purposes. First, most rural areas are not on a community sewer system, and most counties require that the soils be tested for dispersing the waste water in a septic system. Again this test should be a contingency of your purchase. Second, if you have any agricultural aspirations, you may want to have the soils tested to determine the suitability for the crops you want to grow, even a veggie garden and family orchard. Third if you plan to build a pond on the property you should check the soils to determine if they adequately compact to hold water. Last in most counties in California geological testing is required for the building site, to determine the stability of the site and the type of foundation that will be required. This may be something you would want to do during the inspection period. A geologic survey may be in order for other portions of the property as well.

5.) Check out the property corners and boundary lines. While it is best if the property is surveyed, so that you know the exact corners, surveying is quite expensive and sometimes properties are bought without the benefit of a survey. If you purchase without the benefit of a survey, be very careful as the lines that are shown to you may not be correct. It would be prudent to check county plot maps, aerial photos, talk with local surveyors, talk with neighbors, and develop all the information you can. Plan any improvements well away from approximate lines. It is not a good feeling to find you built your house on the neighbor’s land.

6.) Check out availability and cost for utilities, such as power, telephone, gas (usually propane) internet, and television. These can be high dollar items, and should be factored in. Also you may want to consider alternative energy, and the relative cost of solar, wind, and hydro to supply your power needs.

7.) Other things to check out during this time are neighbor and/or neighborhood problems, including registered sex offenders in the area, excessive noise from any source, excessive odor or dust from any source, environmental hazards, such as toxins, and contaminants, including mold, underground storage tanks for chemicals or hydrocarbons , tax assessments, property taxes, fire and police protection, geologic hazards such as earthquake fault zones, flood zones, fire hazards, and weather related hazards.

8.) For a developed property, additional inspections that should be done are a “Home Inspection”, a roof inspection, a pest and fungus inspection, a septic inspection, and inspections of any additional components such as pools, hot tubs, heating systems, outbuildings, energy systems, etc.

Your due diligence inspections and research are a critical part of purchasing rural property and corners and cost should not be cut at this time, as this may come back to bite you later.

One additional note is there are unscrupulous people out there so check out the people you deal with and be on the lookout for scams. If a deal looks too good to be true, it probably is and red flags of caution should go up. A good local real estate agent can help you through your research and due diligence and he/she knows what concerns are particular to the area. Good luck on your new endeavor, and enjoy your home in the country.
Tim Mathias