The SECRETS of Buying Land they Didn’t Tell YOU.

Summary

This video script offers essential advice for purchasing raw land, emphasizing the importance of due diligence. It covers key steps such as reviewing deed restrictions, conducting land inspections, understanding flood zones, and ensuring legal access. The speaker warns against common mistakes, like overlooking inspection periods or ignoring taxes, which can lead to costly consequences. The summary also highlights the value of a real estate agent in navigating the buying process and the necessity of being proactive in researching the property's surroundings and potential impacts on insurance costs.

Takeaways

• 📝 Conduct due diligence when buying land to avoid common mistakes.
• 📑 Obtain a copy of deed restrictions and covenants once an offer is accepted.
• 🔍 Perform a land inspection to identify any issues that could affect the property's value.
• 🏞️ Check for restrictions on waterfront properties, such as the need for permission from the U.S. Department of Corps of Engineers for docks.
• ⏳ Use the inspection period to gather all necessary information about the property.
• 🚫 Be aware of the time frame for inspections and research to avoid last-minute issues that could lead to losing the deposit.
• 🏡 Understand the restrictions and covenants to know what can and can't be done on the property before investing further.
• 📈 Research neighboring properties to anticipate future developments that could affect property value.
• 🌊 Ensure the property is not in a high-risk flood zone that could lead to expensive insurance premiums.
• 🏘️ A real estate agent can provide valuable guidance and representation without any out-of-pocket costs.
• 📊 Get a survey and flood elevation certificate to understand the property's relation to sea level and potential flood risks.
• 🚫 Avoid purchasing land without proper access, as it could lead to being landlocked and needing servitudes.
• 👢 Walk the property to identify any encroachments or issues not visible in the survey.
• 🌳 Be cautious of environmental factors like standing water, bug infestations, and proximity to amenities.
• 🏦 Remember to pay property taxes to avoid losing ownership due to tax sale.
• 🏡 Consider the emotional aspects of buying land, such as school districts, grocery access, traffic, and crime rates.

Q & A

What is the first step to take after making an offer on a piece of land?

Once the offer is accepted, the first step is to get a copy of the deed restrictions and covenants.

Why is it important to inspect the land before purchasing it?

Inspecting the land is crucial to ensure there are no issues that could hinder its value after purchase, such as restrictions or potential encroachments.

What should a buyer do if they want to put a boat dock on waterfront property?

They need to get permission from the United States Department of Corps of Engineers before making any modifications to the water.

What is the recommended timeframe for conducting inspections and research on a piece of land?

It is advisable to conduct inspections and research during the inspection period, typically 10 to 14 days, after the offer is accepted.

Why is it a mistake to delay research until close to the closing date?

Delaying research until close to the closing date can result in losing the deposit and potentially being sued for specific performance to the contract, which can be costly.

What is the potential legal consequence of backing out of a land purchase after the inspection period?

A buyer can be sued for specific performance to the contract, which may result in having to pay up to 10% of the purchase price of the property.

Why is having a real estate agent beneficial when buying land?

A vetted real estate agent with experience can represent the buyer's interests without any out-of-pocket costs and help avoid common mistakes.

What is the importance of finding out what is going on next to a piece of land being considered for purchase?

Knowing the future developments or properties adjacent to the land can impact its value, as amenities like stores and gas stations can increase property value.

Why is it necessary to check the flood zone status of a property before purchasing?

The flood zone status can affect the cost of flood insurance and the property's eligibility for a mortgage, which are important considerations for long-term ownership.

What document is required to determine the elevation of a property in relation to sea level?

A flood elevation certificate is needed to determine the elevation of the property, which is crucial for assessing flood risks and insurance costs.

What should a buyer do to ensure they have legal access to their property?

They should obtain a survey to identify any servitudes or easements and ensure they have the necessary permissions to access their property.

Why is it recommended to physically walk the property before purchasing?

Walking the property helps identify any potential issues such as encroachments, servitudes, or unexpected features like a cemetery, and ensures there are no surprises after purchase.

What is one common mistake people make after purchasing land that they should avoid?

Forgetting to pay property taxes is a common mistake that can lead to the loss of the property through a tax sale.

What should a buyer consider regarding the proximity of their land to essential services like fire hydrants and police departments?

Being close to essential services can lower insurance costs, which is a benefit to consider when evaluating a piece of land.

Outlines

00:00

🏞️ Due Diligence in Land Purchases

This paragraph emphasizes the importance of due diligence when purchasing raw land, regardless of its type or location. It advises buyers to make an offer and, once accepted, to promptly obtain deed restrictions and covenants. The script differentiates land purchases from house purchases, highlighting the need for land inspections to identify potential value-hindering issues. It also mentions the necessity of understanding local regulations, especially for waterfront properties requiring permissions from authorities like the U.S. Department of Corps of Engineers. The speaker warns against delaying research until the last minute before closing, as this could result in losing the deposit or even facing lawsuits for specific performance, which could cost up to 10% of the property's purchase price. To avoid such pitfalls, the paragraph suggests engaging a vetted real estate agent who can represent the buyer's interests at no out-of-pocket cost.

05:03

🌊 Understanding Flood Zones and Surveys

The second paragraph focuses on the importance of understanding flood zones when purchasing land. It explains the different flood zone categories and advises against buying in high-risk areas where flood insurance could be prohibitively expensive. The speaker also discusses the necessity of a survey to determine the property's exact boundaries and to identify any servitudes or encroachments that could affect property rights. The paragraph warns of the potential for being 'landlocked,' where access to the property requires crossing someone else's land, and the need for a servitude agreement in such cases. It also stresses the importance of walking the property to identify any issues that may not be apparent from a survey alone, such as encroachments or property boundaries.

10:03

🚨 Avoiding Common Land Ownership Pitfalls

This paragraph outlines common mistakes made by new landowners, such as failing to pay property taxes, which can lead to the property being seized and sold by the local authorities. It also discusses the importance of being aware of the property's proximity to amenities like fire hydrants, fire halls, and police departments, as this can affect insurance rates. The speaker shares personal anecdotes about the consequences of forgetting to pay taxes and the process of redeeming property after a tax sale. Additionally, the paragraph touches on the emotional aspects of buying land, such as considering the impact on family life, including school choices, shopping, traffic, and crime rates.

Keywords

💡Due Diligence

Due diligence refers to the research and investigation process performed to verify facts about a property before making a purchase. In the context of the video, it is crucial for buyers to perform due diligence to avoid costly mistakes. The script emphasizes the importance of reviewing deed restrictions and covenants, conducting land inspections, and understanding what can and cannot be done on the property.

💡Deed Restrictions and Covenants

Deed restrictions and covenants are legal conditions or limitations placed on the use of a property, often found in the property's deed. The video script highlights the necessity of obtaining a copy of these restrictions early in the buying process to ensure the buyer is aware of any limitations that may affect the property's value or usability.

💡Inspection Period

An inspection period is a specified time frame during which a buyer can conduct various inspections and investigations on a property before finalizing the purchase. The video script mentions a typical 10 to 14-day inspection period, during which the buyer should gather all necessary information about the property to make an informed decision.

💡Setbacks

Setbacks are the minimum distance that a building or structure must be from a property line, often specified by zoning regulations. In the video, the concept of setbacks is used to illustrate the importance of understanding local building codes and restrictions, which can affect where structures can be built on a property.

💡Flood Zone

A flood zone is an area designated by flood maps as being at risk of flooding. The video script discusses the significance of flood zones in determining the property's risk of flood damage, the cost of flood insurance, and the potential impact on property value and mortgage eligibility.

💡Flood Elevation Certificate

A flood elevation certificate is a document that certifies the elevation of a building or structure in relation to the base flood elevation. The video mentions this certificate as a critical tool for determining the cost of flood insurance and ensuring that a property meets floodplain management criteria.

💡Real Estate Agent

A real estate agent is a licensed professional who assists buyers and sellers in real estate transactions. The video script recommends working with a vetted real estate agent to navigate the buying process, emphasizing that they work in the buyer's best interest and can provide valuable insights and support.

💡Multiple Listing Service (MLS)

The Multiple Listing Service is a database used by real estate agents to list, find, and sell properties. The video script explains that the MLS is a resource for determining property values and marketing properties for sale, and that the listing company pays a real estate brokerage to bring a buyer for the property.

💡Encroachments

Encroachments refer to structures or items that extend beyond the property boundary onto another's property without permission. The video script warns about the potential for encroachments and the importance of identifying them during the inspection period to avoid future disputes or legal issues.

💡Servitude

A servitude is a legal right to use another person's property for a specific purpose, such as access. The video script discusses servitudes in the context of accessing a property that may be landlocked, emphasizing the need for permission from neighboring property owners to create a legal right of way.

💡Landlocked Property

A landlocked property is one that cannot be accessed without crossing another person's property. The video script describes the potential issues with landlocked properties, such as the need for servitudes to access the property legally, and the complications that can arise if access is not properly established.

💡Property Taxes

Property taxes are taxes paid to a local government based on the value of the property. The video script cautions buyers about the importance of paying property taxes regularly to avoid losing ownership of the property due to tax delinquency, which can lead to the property being sold at a tax sale.

Highlights

Importance of due diligence when buying raw land.

Differences between buying land and a house, including the need for land inspections.

The necessity of obtaining deed restrictions and covenants after an offer is accepted.

Potential issues with waterfront properties and the need for permissions from authorities.

The importance of the inspection period for land purchases, similar to house buying.

Consequences of not conducting research within the inspection period, risking the loss of deposit.

Risks of being sued for specific performance to the contract if inspections are delayed.

The role of a vetted real estate agent in avoiding costly mistakes.

How the multiple listing service works and its importance in property valuation and marketing.

Mistake of not researching what's adjacent to the land, especially for vacant properties.

The impact of nearby amenities like stores and gas stations on property value.

Understanding flood zones and the implications for property and insurance costs.

The requirement of a survey and flood elevation certificate for properties in flood zones.

The potential complications of landlocked properties and the need for servitudes.

The importance of walking the property to identify encroachments or other issues.

The risk of overlooking property taxes and the potential for property forfeiture.

The emotional decision-making process involved in choosing a piece of land.

The importance of considering factors like schools, grocery shops, traffic, and crime rates.

The potential for lower insurance rates due to proximity to fire hydrants, halls, and police departments.

The need for thorough research and preparation before closing on a land purchase.

Transcripts

when it comes to buying a piece of raw

Land There are countless mistakes that

people make the good news is they can be

avoided it doesn't matter if it's

waterfront property like this one or

just a bunch of land out in the country

there's things that you got to do you

got to make sure that you do your due

diligence you hear me say that all the

time you got to make sure that you do

your homework so the first thing you'll

want to do when you find a piece of land

that you really like of course make an

offer but once the offer is accepted the

first thing you need to do is get a copy

of the deed restrictions and Covenants

now look buying a piece of land is

totally different than buying a house

when you buy a house you're going to

have your inspections and do your

inspections but land it's the same way

so what I mean by that is you want to do

an inspection on the actual land itself

you'll want to make sure there's nothing

on that piece of property that can

hinder the value after you purchase it

now look if it's in a neighborhood you

need to get your restrictions and

Covenants and all of that if it's on the

water and you want to put a boat dock

you better make sure that you can

actually put a boat dock you see your

property will go down into the water but

unfortunately you've got to get

permission from the United States

Department of Corps of Engineers to put

anything in that water and look you do

this through your inspection period so

if you have an inspection period just

like you're buying a house but you'll

typically have 10 to 14 days of which

you can get all of this information and

the number one thing you need to do is

restrictions and the covenants because

you've got to know what you can and

can't do on that property before you can

spend any more money and any more time

on it now look here's a huge mistake

that people make when they buy land they

don't realize that they have that time

frame that they can do an inspection

they can do their research on the

property what happens is they don't do

their research until maybe a week or two

before closing at that point it's too

late and here's what I mean by that you

buy a piece of land you want to do your

research you want to make sure that

there's no restrictive covenants you got

to know setbacks if you're going to

build a house can you put temporary

housing on the property you don't want

to wait to the last minute you don't

want to wait till a week before closing

because that's how you lose your deposit

but it's way more expensive than that if

you don't buy that property you see if

you decide to not buy a property after

your inspection time frame that you've

given in the contract you can be sued

for specific performance to the contract

now listen I'm not trying to scare you

but you can be sued up to 10 10 percent

of the purchase price of the property so

if it's a 200 000 piece of land you can

be sued for twenty thousand dollars now

if you don't think a frustrated property

owner won't sue you then think again

I've had it happen to clients of mine

where they literally didn't do all of

the work that we advise them to do and

they decided to not go through with the

purchase of the property or quite simply

the seller hired an attorney

took them to court and yes you guessed

it they went to court they lost cost of

money and the seller was awarded

close to thirty thousand dollars

don't let that happen

now look the best way to avoid that from

happening is quite simple

with a real estate agent

a vetted real estate agent who has the

experience will not cost you any money

out of pocket and they're working for

you in your best interest why it doesn't

cost you anything out of pocket it's

simple so here's how it works when a

property is listed for sale gets placed

in what they call the multiple listing

service the multiple listing services a

real estate agent database that real

estate appraisers and real estate agents

use now they use that database to

determine values of properties and they

also use that database to Market

properties for sale so it's pretty

simple the homeowner pays the listing

company to sell their property the

listing company pays a real estate

brokerage to bring a buyer for that

property so

have somebody in your corner represent

you working for you and listen it's done

this way all over the world and it

doesn't matter if you're buying land

commercial property investment property

it's important to have a good real

estate agent now I don't care who you

use we have agents all around the

country all around the world Canada you

name it and that's why we always say if

you need help you need assistance you

can reach out to us you can go to

contact wayne.com I'll put it right here

on the screen that's a simple free

little website you can put in your

information when you

you know we reach out to you and match

you with the agent that best fits

exactly what you're looking for

now another huge mistake that we see

people make is not doing their work to

find out what's going in next to you if

there's vacant property around you

chances are it's going to be something

someday now look when it comes to a lot

of things you want them you want big box

stores grocery stores gas stations

that's going to increase your property

value every single time simply because

people like to be close to amenities

they just want to be left alone

now it's not enough to just do your

survey do your research and of course I

always talk to neighbors around you but

you want to make sure that the

properties not in a crazy flood zone

there's different flood zones there's a

b c there's X you want to make sure your

property that you buy is in a flood zone

it's not going to flood often now look

it's okay to buy a property that's in a

flood zone believe it or not there's

different flood zones as I mentioned but

you also want to make sure that it's not

in a crazy high flood zone where it's

going to cost you seven or eight ten

thousand dollars a year just for flood

insurance so depending on where you live

you can be in a flood zone but flood

insurance is not required you see if you

have b c or X flood zones you don't have

to have flood insurance on your property

it's not required by a mortgage lender

now don't get me wrong some states are

different the State of Florida for

example they're mandating that every

single homeowner in the state of Florida

have a flood insurance policy on their

property period now with b and c flood

zones it's not required by a mortgage

lender to have it but if you're in flood

zone a

right here on the water you're going to

have to have flood insurance

even if you don't have to have it

the only real way to know what your

flood insurance is going to cost you've

got to have a survey and you got to have

a flood elevation certificate the flood

elevation certificate will show you

where your property sits in reference to

sea level so what can be an absolute

train wreck is if you don't get a quote

for insurance based on the size of the

house or the type of the house the

mobile home that you're going to put on

the property because if you don't and

then you put something on the property

and you try to get a home loan a

mortgage on that property you may not

even be able to get a mortgage on the

property that you're just building or

the worst case scenario your flood

insurance is so expensive that you can't

even qualify for the house and look

doing this work doesn't take a whole lot

of time but you want to make sure you do

this work before you close on any piece

of property because the last thing you

want to do is wait to the very last

minute and find that you can't even buy

the house that you're looking to put on

the property you can't even get a

mortgage for the home that you literally

just built now when you buy a property

oftentimes the land has been surveyed

but don't get me wrong I've sold them

many of properties contracted to many

properties and there's no pins on the

corners there's no meats and Bounds

there's never been a survey on the

property so the last thing you'll want

to do is close on a piece of property

and have somebody come knocking on your

door or hunting you down and basically

saying hey I own a portion of that

property you never want to close on a

home and all of a sudden you find out

that someone has a right-of-way going

across your property to access their

property so have you ever heard of the

term being landlocked yeah believe it or

not there's land out there all around

the country that is locked in in other

words there's no way to access it

without Crossing someone else's property

and the only way to cross their property

legally is to get a servitude now

servitudes are easy to do it's a

two-page document it can be written up

by any attorney however you got to get

permission from the people that own the

property that you need to cross to get

to your property and look usually this

is not an issue we just closed the

transaction on a piece of property and

the seller said that's quite all right

the buyer said that's quite all right

and the neighboring property owner said

I'll be glad to sign a servitude to

Grant you permission to cross 20 percent

of my property to access your property

but unfortunately that's not always the

case see some people aren't as nice some

people aren't as cordial some people

aren't as friendly my grandmother always

said you catch more flies with honey

than my vinegar

some people just don't know that now you

do a survey you know where your meats

and Bounds and the size of the property

the survey is going to see and show you

if there's any servitude on the property

granting someone access across your

property or you have to have access

granted on the property that you're

buying but look that two grand

it's going to give you hey how's it

going that two grand is going to give

you peace of mind knowing that no one is

encroached upon your property see even

though you have a survey on the property

you definitely want to walk the property

because you just don't know if someone

else's fence or garage or shed or

chicken hen house whatever is on your

property now you're doing all this work

and I know it's work it's worked but

here's the deal if you find that there's

a servitude or encroachments or anything

like that you can make the decision not

to buy the property and basically get

your money back or if you still wish to

purchase the property at that point it's

the responsibility of the seller the

person that you're buying the property

from can do the work to make sure the

servitude the easement and everything is

cleared away so once you take possession

of it no worries and this is why it's

important to go trekking through the

woods because you never know on the back

side of your property it's going to a

join a cemetery now there's nothing

wrong with the cemetery believe it or

not there's some of the most quiet

peaceful places to be neighbors too but

here's a little FYI reminder if you will

and I've just learned this from my own

personal mistake when you go to walk

across a bunch of land and property like

that I don't care what time of year it

is you got to get you some good bug

spray and don't walk that property

do not walk that property in shorts

don't make it any easier for the bugs to

get you with a good Lord split you wear

some pants some high socks shoes boots

walk around that property make sure

you're sprayed down with bug spray

you'll thank me later oh what he was

afraid of so look when you're buying a

piece of land you can't be afraid to get

low with the ground you're going to look

for spots that may be holding water

because spots that hold water

never turn out good

but don't get me wrong there's certain

water

like the water you got to drink or take

a bath with that's the water you want on

the property but it's not the end of the

world

can always dig a well so look water can

be a good thing you got to drink it you

got to take a bath with it and it's

certainly beautiful to look at

especially if it's clear blue water but

it's also really important to know that

if you're close proximity to fire

hydrants and Fire Halls and police

departments your insurance is actually

lower not just your homeowners but your

auto insurance now one of the biggest

mistakes that people make after they buy

the land they have the land they own the

land it's quite simply

not paying the taxes and look it's not

that they don't want to pay the taxes or

they don't have the money to pay the

taxes it's quite simply if you didn't

get anything in the mail you just forget

to pay it now you would think paying

your taxes how hard can that be and on a

vacant piece of land your taxes are

typically not that expensive but

unfortunately people just simply forget

about it now I've had this happen true

story to clients where they buy property

from me they call me two years later and

they say Wayne we forgot to pay the

property taxes and look if you don't pay

you don't stay they take your land the

city the county they take your land and

they take your land

and sell it so quite simply what happens

is they sell your property they sell

your property the highest bidder and

oftentimes that's Pennies on the dollar

or the value of the land this means that

they sell the property and you no longer

own it they own the property

but there is a way to save it you see

when you own a piece of property and you

buy a piece of property at a tax sale

you lose your house at a tax sale

there's what they call a right of

redemption you get to actually redeem

your property so buying property knowing

you're going to live there is an

emotional decision very much so where

are your kids going to go to school

where you're going to grocery shop how

bad's the traffic what's the crime just

do all of that and know that whenever

you buy that property

it's gonna be yours for a while