Make an offer on the land

[tiffanymariko]

Make an offer, but start low. A down payment for raw land generally falls between 20-50% of the overall price, and many lenders expect you to have made a down payment before they consider granting you a mortgage loan. Do not be afraid to bargain with the seller. You can significantly reduce the overall cost with successful bargaining. Your offer should include an option on the land for a small fee, so that you have the opportunity to do due diligence before completing the purchase. Essentially, this will put the land on “hold” for you while you do your inspections. Alternatively, your offer can include a closing date (the date on which the purchase is completed) far enough into the future to complete the due diligence process.

• Your offer should also include provisions allowing you to walk away or buy the land for a reduced price depending on the findings of the due diligence process.
• Cheaper properties make more financial sense when it comes to raw land as land tends to appreciate as it's developed. Look for relatively low-cost options that meet your needs as a buyer.
• Inquire as to particular property tax savings programs in the state you're buying if you plan to leave the land undeveloped for a significant period of time. These plans can save you a lot of money long term, as taxes and payments are reduced over time on uncultivated land.