The Process of Buying Land: A Practical Guide

Introduction

Buying land is a major purchase that often involves more planning and due diligence than buying an existing home. This guide covers the typical process, what to expect, and practical steps to stay organized.

Before you start

Define goals and budget

Clarify what you want to do with the land (build a home, farm, hold as an investment, develop later). Set a realistic budget that includes the land price, closing costs, due diligence, and potential development costs.

Understand local rules and timelines

Research the local zoning, future plans, and permitting timelines. Some uses may require rezoning or special approvals.

Research and planning

Choosing a location and land type

Consider access, grade, drainage, soils, plus proximity to utilities and services.

Key questions to answer

What can be built on the property, what are setbacks, easements, and mineral or water rights? Are there flood zones, protected lands, or environmental constraints?

Financing options and budgeting

How land financing differs

Financing raw land often has higher rates and shorter terms than a typical mortgage, and may require larger down payments. Some buyers use cash, seller financing, or combined options.

Build a contingency budget

Plan for surveys, soils tests, permits, and potential development costs.

Due diligence

Title and encumbrances

Order a title search to identify liens, easements, or restrictions that stay with the property.

Access, utilities, and surveys

Confirm legal access, easements, and the availability of utilities. Hire a licensed surveyor to confirm boundaries.

Environmental and natural resources

Check for wetlands, flood risk, wells, septic systems, and any contamination or restricted uses.

Making an offer and negotiations

Drafting the offer

Include price, proposed close date, and contingencies. Common contingencies cover financing, due diligence, and surveys.

Earnest money and timelines

Prepare earnest money to show seriousness, and agree on a due diligence period for inspections and confirmations.

The contract and closing process

Contingencies and final approvals

Resolve all contingencies, finalize financing, and clear any title issues.

Closing steps and ownership transfer

Sign the deed, pay closing costs, and record the deed with the county to complete ownership.

After you close

Ongoing costs and responsibilities

Property taxes, maintenance of access, and any HOA or deed restrictions if applicable.

Special considerations for different land types

Raw land vs improved land

Raw land may require roads, utilities, and permits, while improved land may already have some infrastructure in place.

Water rights, mineral rights, and covenants

Rights can be separate from ownership and may affect future uses.

Common pitfalls and tips

• Don’t rely on informal information; verify with official records.
• Get professional help for title, surveying, and legal questions.
• Budget for hidden costs and timeframes that can stretch.

Quick checklist

• Define goals and budget
• Check zoning and permit requirements
• Verify access and utilities
• Hire a surveyor and examine title
• Review all contracts and contingencies
• Plan for closing and ownership transfer