- Be cautious of anyone selling land “FSBO” on a commission. If they’re selling on commission, that probably means they are not the owner of the land and they need to be a licensed realtor. Ask them for their realtor’s license number. If they don’t have one, they are likely “practicing real estate without a license” and you’ll want to steer clear for a number of reasons:
- It’s illegal.
- They’re not held to the standards put in place for realtors who are trained to properly represent buyers and sellers.
- Since they’re not the actual owner, any promises they make to the buyer may not be honored by the actual owner later.
- They don’t really provide much value to the buyer as they usually only meet you once to show the land.
- Their commission increases the price. Their commission is often 7-10% of the sales price. By talking directly to the owner, you should be able to cut them out and lower the asking price by that amount.
- Make sure background checks are performed on buyers. Especially if you’re buying in a development with multiple tracts.
- Some people have such a bad criminal history that they can’t even rent an apartment, so they often turn to owner financed land with no background checks as their last resort.
- When someone is “renting” land as a last resort, they often do not have any pride in ownership and end up trashing the property. Lowering the value of your nearby land.
- When a company or individual doesn’t scrutinize the buyer’s information, it’s easy for someone to buy land under a false name (or a relative’s name) in order to hide from “the law”.
- Make sure there’s some sort of plan for private roads.
- Ideally, someone living in the development, who owns a small tractor, will usually volunteer to grade the roads occasionally. They usually try to get donations from other owners whenever new gravel is needed. It’s always good to help these volunteers out as it usually doesn’t cost you very much and it keeps up the value of your property.
- If a developer still owns a large number of tracts on a road, it would be in their best interest to improve/maintain access to their tracts to make them more accessible. If a company is neglecting to maintain access to their properties, that may be a sign that they’re just hoping to sell to someone who doesn’t realize what they’re getting into. When buyers eventually realize that they can’t physically access their property, they’ll often give up the property, the developer will keep their payments and sell the land to a new unsuspecting buyer.