Raw

What to know when buying raw land

Raw Land - a piece of property that has not been developed and remains in its natural state.

Buying Raw land can be difficult to get mortgages on compared to residential homes as there is more people wanting to purchase a residential home than any other type of property. Buying raw land can be marketable but lenders at least do not want to admit it. For this very reason, most banks want a larger than normal down payment for raw land purchases. Raw land usually commands a higher that average interest rate.

A few things to consider before buying raw land is:

"Accessibility to the land". Raw land can be attractive but can be trapped behind other properties causing developing the raw land to be a nightmare. Are the roads to the land large enough to get large trucks onto the land?

"History of the land". Do not assume anything when it comes to purchasing the raw land. Ask the seller and research about it. If you see a hill, check if it is natural or man made. Consider the items that might also be buried underneath. This will affect how you build your property. You also have to find out if it is even safe to build a structure there.

"Consider the work to be done". Most of the time, raw land purchasers fail to consider the expenses for preparing the land. Bear in mind that lands need to be prepared before you start building a property. Will you need a bulldozer to level the land? Are there big rocks you need to move or grasses you need to cut. You might also need to clear some trees and shrubs. Consider all these activities when calculating your expenses.

"Find sources of water and electricity". Remember that you will need water and electricity in order to live comfortably in that area. If it is an isolated land, you might have difficulty finding a clean source of water. This is one of the most important things you need to check. Bear in mind that without water, it would be impossible to live there. Electricity lines should be able to reach the land as well. Although you can use solar energy, installing its system is very expensive. How far is it from the nearest power source? What are the requirements you need before you can have power in that parcel of land.

"Familiarize yourself with the local building codes". You probably want to purchase the raw land because you want to build your dream home there. Before you get too excited, you might want to ask some of their building restrictions. You might not be allowed to have a pool or a two storey home.