So you found the vacant land you want to buy. You plan to make a good investment and potentially build someday in the future, hang onto it, hand it down to the kids, or resell it when its retirement time. So the big question is how to buy land in Idaho. Here is our big things for you to consider as you move forward on a property.
One of the first things you want to confirm is that you can use the ground as you intend. That is going to take a good trip to planning and zoning and making sure that its zoned the way you need and that what you want to build fits on it with all the proper setbacks etc.
Also double check the county/cities future plans for the area if you are not planning on building anytime soon.
Utilities: What is connected and what can be connected. And roughly figure out what it is going to cost. If you are buying a lot in town make sure that you can connect to all utilities. A good example of that is Spirit Lake Idaho where the moratorium is on the sewer hook up until the end of time or so it appears. You may be waiting a long time to do something with a lot that has a road block like that. Double check if the roads are not in that you don’t have to put the road in if you build. Or run the utilities. That might be okay if you are a developer but not effective if you are one person taking on a future development.
If you are buying Rural land you may have to / want to do a perc test to make sure your ground is suitable for septic. And you a may need to plan on how you are getting water either community served or a well. You may want to read our blog on perc testing and utilities. We also have some info available for you on wells in the area and how to check on those. And a source for how much water you need out of those wells. In our article wells and how to evaluate your needs.
You might want to take a look at our contract series if you are not familiar with Idaho contracts so you know what to expect during the process. Agency is very important so you know who is working for you. We did write that series more towards the residential market but many parts of it are similiar and just as important to vacant land. As the contract for both shares many parts.
Probably the most important part of vacant land purchase is to really pay attention to your title committment. I can’t begin to tell you how many people buy problems. Ingress and Egress, and easements are the main things that get a lot in trouble. Especially if you buy with cash. As no lender is looking over your shoulder to protect themselves.
There is not a ton of banks out there willing to loan on land. Frankly only a very small handful. And then the hoops to jump through as anyone knows to get a loan right now is not easy.
So here are the options: Cash of course is king: But- don’t have the cash?
We have a few options on our Finance page.
Traditionally a credit union or a land specialist company like Northwest Farm credit are usually your best bet. They all usually require at least 20% of the purchase price down plus your closing costs.
Most are also requiring a Perc test if you are not connecting to city sewer.
Your other option is to hopefully find someone who has their land paid off that doesn’t mind carrying the paper. There is a good handful of them available also. You will usually pay a little more interest then you would if you finance it but that sometimes is what it takes. Especially if you’re having a hard time qualifying for a land loan.
Most sellers that are going to hold paper usually require at least 10% down and up to 20% down maybe even more just depends on their situation. And yes its always negotiable but you want to be prepared for worse case scenario. They usually need enough to pay their closing fees, Realtor fees etc. You will also have closing costs so add that little extra into the equation.
Buying vacant land is a great investment opportunity for you though.