As a vacant land buyer, you should do personal due diligence on every aspect of the property. Since purchasing vacant land is a bit different from purchasing a built house, there are certain additional precautions and homework for land buyers.
In this article, we are explaining the best practices of due diligence, when purchasing land in New York State.
Title inspection
Title inspections the most basic step before purchasing any vacant land.
Make sure that the person who you are dealing with is the owner and holds all the rights required for transferring the property into your name.
Title inspection is no exception for lawyers/advocates, you can involve them in checking title documents like property tax receipts, sale deed, and a certificate confirming the title of the owner.
Usually, the common practice is to trace the title of property for the previous 30 years and check the documents involved in claiming property rights.
Inspect the Land Thoroughly
Before buying any land, visit the actual property several times and confirm everything with this property is to your liking. Moreover, you can observe the surrounding area and determine whether the land is worthy of investment.
If the land is located in a rural area and you are planning for agriculture, don’t forget to check the productivity of the soil. Many agricultural areas and their prices are derived from their soil, so make sure it’s fertile.
Review Price Trends
At times, the real estate market of a specific area is high because the difference in supply and demand varies between each market. When supply is low and prices are going up, investors consider that the value of particular land is increasing and it’s the right time to invest.
But when this trend is ending and investors try to resell their properties, the price curve comes to its original position and may give a loss. Hence, it is beneficial to review price trends and purchase land accordingly.
Checkout for Release Certificate
Sometimes, sellers acquire a loan from a bank by mortgaging or pledging their land. Prior to purchasing, the buyer needs to confirm that the seller is now free from the loan and paid back in full.
Typically, you can check a release certificate from the bank, to determine whether the land is free from all debts.
Local Laws of the State
It is essential to regulate under the state laws when buying vacant land. Also, check that the land is free of all the restrictions and the whole real estate transaction is done according to state law.
Power of Attorney
When you are buying land from the person holding power of attorney on the behalf of the owner, the documents should be closely examined to assure that it is the same property that‘s being sold.
Furthermore, you may need to sign certain documents in a timely fashion and, If not done in a timely manner, this may cost extra charges.
Permission approvals
If you have some plans for your land such as the construction of buildings or specific structures, it is advisable to verify whether the necessary permissions, approved plans and NOCs are in place. You may receive a setback of road widening, heritage rules, faulty structure after buying the land.
There are several of these particulars to check off before purchasing land. You merely can’t visit a “one-stop-shop” to access all necessary information regarding the land. Besides the seller, realtor, title company, and escrow officer, you are the main person as a buyer to ensure comprehensive due diligence, which you can do by considering all the above-discussed points.
