Due diligence. Two of the most intimidating words in the english language. It sounds so serious and official! And when you are buying vacant land, you need to be sure that you’ve uncovered all the issues that could surprise you – who knows, you could be buying a toxic wast dump!
BUT once you know what to look for, due diligence becomes a lot less scary. Keep reading to learn how to make sure that piece of property isn’t going to be a huge liability.
First and foremost, you need to have a clear picture of what you want to use the land for. This will determine what you’re most focused on and how important various aspects of the land are. For example, if you are planning to build a home, you want to make sure the zoning allows that. Oh and make sure you’re not in a flood zone – it makes getting a loan very expensive!
Once you’ve determined how you want to use the land follow this checklist to make sure you are buying what you think you’re buying:
- Call the county planning and zoning. Ask them what the property is zoned as. Can you build a house? Go hunting? Park an RV? The P&Z folks should be able to answer all of these questions. Make sure to ask about restrictions – I’ve purchased a property in Oregon that had serious building restrictions because it overlapped endangered Sage Grouse habitat. These little guys have a lot of power!
- Check out the neighborhood. Get the GPS coordinates and find the property on Google Maps or Google Earth. Is there road access? Is the property on the side of a cliff? Is there a nuclear power plant next door? Many counties also have a Geographic Information System (GIS). Think of Google Earth on steroids – you can find zoning, flood zones, county roads, the names of your future neighbors, and much more. You should become very close buddies with the county GIS.
- If you are planning to build and want power and water, make sure you understand what you have to do. Will you be off the grid – drilling a well and using solar panels? Will you want a power line installed? If so call the local power company and ask what that will cost! Will you want sewer? Call the local water division and ask if that is possible. If you need to dig a septic system, make sure the ground percolates (aka. “percs”), otherwise you will have a stinky situation on your property!
- Check on any liens or back taxes. Occasionally property will have taxes or HOA fees that are due. Sometimes there will be liens recorded with the county. Sound bad? Well, if you are a savvy investor, this is music to your ears! You will find the best deals on properties with taxes or HOA fees owed. You can buy the property CHEAP, pay off the taxes/fees, and own it free and clear! Almost all of the property that we at Wilco buy falls under this category – that’s why we can turn around and sell it to you for pennies on the dollar!!
When you pull it apart, due diligence isn’t so scary. In fact you can do almost all of it from the comfort of your home. Just make a few phone calls and use the online resources that are available to you and you are off to the races!
If you are considering buying some property and you have any questions about Due Diligence, please give us a call or send us an email. We would be happy to help you out!
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