13 Important Questions to Ask Before Buying Land Real Estate

Even if a piece of property seems perfect, there are a lot of questions you should ask before you take out that checkbook. There’s so much you need to know about a property that a seller might not tell you right away. These twelve questions cover the most important topics for land owners to know about so that you can make sure the land is worth your hard-earned cash.

1. Is the Land Under Any Conservation Easements?
Conservation easements prevent land owners from planting, clearing, or hunting on certain areas of land to protect the natural resources. While the easements are good for the environment, it can be bad for you. Ask your seller if there are any conservation easements on the property, and if so, how they affect how much of the land you can use. Be sure to ask about how the bodies of water on the property could be affected by the Waters of the United States Rule (WOTUS). While it is currently being proposed that the rule be delayed to allow for proper review of the definition of what constitutes ‘Waters of the US’, it still remains uncertain what the future will bring (learn more about WOTUS here: https://www.rliland.com/two-year-delay-wotus-rule-proposed). Also, make sure to take into consideration that flooding or contaminated water can prevent you from using huge sections of land.

2. What Will the Taxes on This Property Look Like?
If the property is already in land-use before you buy it, your property could qualify for serious tax breaks . Different states and counties have different rules about what types of land qualifies for a tax break program. For example, in the Albemarle county in Virginia, agricultural land must consist a “minimum of five acres and must meet prescribed standards for a bona fide production for sale of crops and/or livestock or be in an approved soil conservation program”. Check with the local Commissioner of Revenue to learn about what tax breaks your land qualifies for.

3. What Rights and Titles Are Included with This Property?
Rights are the benefits you get from a property as its owner (road access rights, mineral rights, development rights, etc.). Titles are a bit trickier (check out these The Top Three Title Issues). A title is a bundle of rights in a piece of property, such as exclusive possession and access easement. Since many titles are passed down from owner to owner, they may be out of date or overly complicated. If there are titles included with your property, consider hiring a title attorney.

4. Do I Have Access to Electricity/Wi-Fi Everywhere on This Property?
It’s very common for properties to have large ‘dead’ zones with no electricity or Wi-Fi because the owner didn’t ask about it beforehand. Just because the property has access to a powerline does not mean you can use it.

5. Are There Any Environmental Hazards I Should Be Aware Of?
You might think that you would be able to spot any deadly environmental hazards just by walking around a property. However, many environmental hazards can’t be seen by the naked eye. They can range from toxic runoff in the water, leaking underground pipes contaminating the soil, and improperly stored chemicals from previous owners. Having an environmental hazard on your property can be bad for your land at best, and put you at risk for serious health issues at worst. Remember, the seller is not obligated under law to volunteer any information about environmental issues unless you ask in most states.

6. Has the Soil Been Tested for Percolation Rate?
The soil percolation rate lets you know if the land can absorb water from a septic system. If the land hasn’t been tested, it is important to hire a soil scientist to study the topography, types of soil, and the soil’s ability to absorb water.

7. How Is the Property Reached?
There are two main ways to access a property – do you know which your property has? A frontage road is a local road that provides access to private properties. These add to the value of a property. A deeded access is a two-party system where the landowner (who doesn’t have reasonable access to his property) and a nearby neighbor (who does have a means of access) reach an agreement about right of way. If your property is accessed by a deeded access, you need to find out as soon as possible what the agreement is and if necessary, sit down with your neighbor to see if anything about the deeded access has changed.

8. Are the Boundaries of the Property Clearly Marked?
This is one of the most important questions to ask. If you plant on land that is not yours, even if you didn’t know about it, you could face lawsuits. If there is any uncertainty about the boundaries of your property, ask if a survey of the land has been done recently. A recent survey will be able to show you clear and up to date boundaries on your property.

9. How Does the Water Drain from the Property?
Water drainage can impact what you grow. Some properties dry quickly, while others stay wet most of the year. If you don’t know about the drainage and plant the wrong crop, it could drown or dry up your produce. Also, poor drainage around buildings can cause permanent damage and mold.

10. Is More Than 70% of The Property Sloped Suitably for Growing and Harvesting Timber?
This tip comes from Accredited Land Consultant Jonathan Goode, ALC. If you are looking to buy timberland, this question should be at the top of your list. Why more than 70% of the land? Timber requires a lot of land, so by having the majority of the land suited for growing timber, you’ll be making the best investment for your future timber business.

11. Where Are the Nearest Wood Mills?
This is an often-overlooked issue for timberland buyers. There are some properties that are so far away from wool mills that the cost and time it would take to get your wood there would be a huge drain on your budget, lowering your ROI.

12. What’s Going on With the Other Properties Near Me?
It’s a good idea to be in the know of what’s happening on the land near you. Are properties near you in the process of development? Have there been environmental issues or hazards with your neighbors? This will help you get an idea of what to expect from your own land.

13. What Is The Property’s Highest and Best Use?
The Appraisal Institute defines highest and best use as follows: “The reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible, and that results in the highest value.” Considering the highest and best use of the property is a must before making a purchase because it can impact the value of the land based on different uses of it.

If you are satisfied with the answers to these twelve questions, there’s a good chance you’ve just found the perfect property.

About the Author: Laura Barker is a Marketing Assistant Intern for the REALTORS® Land Institute. She graduated from Clark University in May 2017 and has been with RLI since October 2017.