Buying an empty plot of land is very different from buying an existing home. The mortgage process is different, and of course, choosing the property can be different as well. When buying a plot of land, it's helpful to know in advance what you're looking for, and what your priorities are. Doing extensive research and working with an experienced real estate agent can help. Here's what you need to know.
Challenges to Expect When Buying Land
Buying land isn't usually as competitive as buying an existing home, but it does come with its own challenges.
Securing a Mortgage
Securing a mortgage for an empty lot can be a lot harder than buying an existing home. Many banks hesitate to loan money for an empty lot because the empty lot provides little leverage in the event that the buyer defaults on the mortgage. A buyer who purchases a home and moves into the house will have a powerful incentive to continue paying the mortgage, even in times of financial difficulty. It is not so with a buyer who owns an empty plot of land.
Banks that do loan a buyer money for an empty plot of land will usually require a larger down payment and a better credit history than if the buyer were purchasing an existing home. Buyers who are not sure if they'll be able to qualify for a mortgage for an empty lot should first start talking to lenders before making an offer on a property.
Determining What Lot to Buy
Determining which piece of land to buy can be a challenge, because most empty lots will quickly start to look alike. Buyers must know what they want in advance of looking at lots, to make it easier to rule out unsuitable properties.
How to Ensure a Smooth Purchase Process
There are many things a home buyer can do to ensure a smooth purchase process.
Know What You Want
Making a wish list is one way that a buyer can make it easier to identify which property they want. Some factors to consider when making a wish list includes:
- Driving distance to work.
- View of surrounding land.
- Size of the lot.
- Proximity to businesses, schools, churches and neighbors.
- Environmental noises.
Knowing exactly where they want the plot of land to be and what kind of amenities they're searching for can make buying a lot much easier for the buyer.
Get an Environmental Test
Before making an offer on a lot, it's important for the Evergreen home buyer to get an environmental test done on the property. The environmental test will tell the home buyer whether the property is safe and whether there are hazards for the home buyer to avoid or have remediated after purchasing.
Buying Land? Work With a Real Estate Professional
If you're thinking about buying a plot of land for a home that you'd like to buy, an experienced real estate professional can help. A good real estate professional can show you different plots in the area where you'd like to make your purchase, and can help you negotiate a good price.
Working with a real estate agent will help ensure that the transaction will go smoothly and as efficiently as possible. For more information about buying an empty lot, contact an experienced real estate professional in your area.
Justin Havre is the top producing REALTOR® with RE/MAX First, Canada's very first RE/MAX brokerage. Calgary real estate is his passion; Justin specializes in Southwest & Northwest Calgary homes for sale. He can be reached at 403.217.0003 or contacted through this site.