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real estate expertise?
Old 11-25-2008, 11:13 AM   #1
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real estate expertise?

I am seeking a member with expertise in buying real estate. Specifically I am looking for advice on traps and pitfalls to avoid when making an offer.

I have found what I believe is THE parcel on which to begin my homestead/farm. I have drafted a proposal for purchase with owner financing, and have listed a few conditions at the bottom. (ie: 10 yr term, clear title, no pre-payment penalties, etc)

I was just hoping someone here might have been an agent or lawyer in an earlier lifetime and could maybe point out some things I am unfamiliar with. We've only ever purchased one property before, the one we currently live in. And that was 20 years ago.

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Old 11-25-2008, 11:22 AM   #2
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With owner financing, it never hurts to ask ... keep the interest rate low and fixed; heck, ask to defer payments for a year or two (or until you build). It's just a starting point of negotiations. Also think about whether or not you want taxes and insurance escrowed. Insurance escrow will not be needed if only raw land ... but the seller will want taxes collected monthly. If any piece is escrowed, make sure the payments collect interest.

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Old 11-25-2008, 11:24 AM   #3
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Just a couple: Since it is raw land (?) or even if not, if you plan to build new, be sure your specify a perk (Percolation) test to be conducted and specify what you require. I am assuming any buildings on or to be on would have to support a Septic Tank and field. Also if you must drill a well for water specify at what level you must hit water or if there is a well already there be sure it is tested to your satisfaction. Be sure any easements that exist (granted by a previous owner or taken by the Government can be lived it). Another item would be getting your own survey accomplished and make the sale contingent on getting any required governmental approvals needed to build what you plan.
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Old 11-25-2008, 11:37 AM   #4
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What about abandoned underground storage tanks for oil or gasoline? I don't know anything about the legalities but these can be a real liability in buying any property anywhere.
We had an abandoned buried heating oil tank on our lot and had it removed just in time, it was almost rusted through. There were 800 gallons of 30-year-old oil in there.
Bad news - it was expensive and difficult to remove from a tight spot.
Good news - the oil didn't leak (pollute the aquifer) and we were paid for it. It was still usable!
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Old 11-25-2008, 11:54 AM   #5
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Instead of looking at this as a real estate issue.
Look at it as a negotiating issue - how to negotiate what you want.
How to Negotiate - wikiHow
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Old 11-26-2008, 03:26 PM   #6
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Lets see:

Flood Plain
Does the property have good drainage?
Zoning issues that could prevent you from building what you want
Survey issues - encroachments, etc
Easements - pipelines, utilities, etc
Does the property have legal road access
Are the taxes out of control?
Any anticipated future land use changes in the area?
How are the neighbors? - anything that could affect property value
Water supply - how deep are the nearby wells
Sewage disposal - soils could affect type of system
Natural Gas?, or propane?
Electric service onsite? or expensive off-site connection

Get a real estate attorney - he/she can help with the offer and ?'s
Get a survey
Get a title commitment
Visit the county or other governing agency to see if there are issues
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Old 11-26-2008, 06:45 PM   #7
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Thank you all.
"Iron" Mike - Semper Fi
Jack of all trades; Master of none.
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Old 11-26-2008, 06:49 PM   #8
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"10 easy steps to FSBO your house"

Buying a House - Resource Center

Check your area's real estate websites (and realtor's blogs) to locate the official forms used by local real estate agents. The forms will have fill-in-the-blank boilerplate to help you think of other clauses or contingencies that you may want to attach to your offer. For example your purchase may be contingent upon you being able to obtain financing at no more than some max interest rate, or contingent upon the sale of your house by a certain date. You may want to include a clause about being able to obtain insurance (particularly flood insurance, if applicable) and what happens when the home/property inspector (or the soil engineer) finds problems.

What utilities do you already have? If the municipality brings out sewer or water or electric service to your area, are you required to connect to it and to pay the cost? Are there any assessments for maintaining the roads or bridges or other public/common property? If there's streamwater running through your property, do you have rights to use it?

And in your area-- what happens if historic artifacts or human remains are found on the lot? In Hawaii that sets off a whole chain of what a new owner would consider "bad" events.

I just read an excellent book on homesteading-- "Back To Basics". Reading it may give you ideas of other features you want on the property or things to watch out for. And if you build your own hydraulic ram, I want pictures!

If you haven't already, you should read Kitty's posts and her blog. You two might have a lot in common... or are about to.

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Old 11-28-2008, 06:13 AM   #9
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Nords, it was the original printing of Reader's Digest's book Back to Basics that originally planted the seed of homesteading in my mind. That was back in the early '70's. I've always been a voracious reader and Dad had picked this book up from his book club.

I'll check out Kitty's stuff. Thanks.

"Iron" Mike - Semper Fi
Jack of all trades; Master of none.
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