Buying Your Homestead

While I have owned land for many years, it has only been in the last few years that I have been serious about homesteading. In light of the recent events surrounding the Corona virus and the shortages in food and basic supplies, it has firmed my resolve to be more self sufficient. Thankfully I have enough room to raise animals and grow food.There are many ways one can be more self sufficient, but I will save that for another post. This post is about buying a home or land to start your farm or homestead. As a Realtor, these are the questions I ask when helping a client or looking at land for myself.

So you want to farm or homestead and don’t know exactly where to start. There are a few things to consider when buying a home or land for your homestead. No matter if you are buying a home on a quarter acre in the suburbs or a 100 acre farm, there are some basic things you need to know. Each person is unique as are their needs in a home and land. I have put together a list of questions you will want to ask when looking at properties. While not all encompassing, they form a framework to help you make a more informed decision.

  1. Location and Budget – Ideally, where would you like to live and how much can you spend? We all have our dream property, but in reality, most of us have a budget. I always advise my clients to talk to a lender and find out how much they can afford and what type of loan they qualify for.  It saves time and possibly the heartbreak of finding the perfect home and then not being able to afford it. Your budget may also dictate your location as generally the closer you are to a larger city, the higher the price of land.
  2. Type of Property – Are you looking for land only, a house and land or a house on a suburban lot? If you are looking for land only and plan to finance, you will need a different type of loan, a land loan. If you then plan to build a home you will need a construction loan. Does the property have utilities in place or access to them? Water, electricity, septic or sewer. How high is the water table, is it cost effective to have a well drilled? It can be very costly to bring utilities onto a property so don’t dismiss the land with a mobile home. It likely has all the utilities in place and you could live in it while you are building or using the land and if you decide you do not want it, it can be sold and moved.
  3. Floodplain – Is the property you are considering in a floodplain? If the price seems too good to be true, it might be in an area that floods. This is not necessarily a deal breaker. If the property is completely in the floodplain, you will be limited as to use, unless you want to pay a high price for homeowners insurance. However, it could make a great hunting or recreational property.  If only a portion of it is in the floodplain, you can build on the land that is not and graze animals on the part that is as long as you have a safe place for them in the event the land does flood. How do you know what is or is not in a floodplain? You can search the FEMA page.(Note that not all areas have floodplain mapped by FEMA) In my opinion, the spring rainy season is the perfect time to look at land as standing water and flooding are more evident.
  4. Restrictions – How will you use the land and does the property you are interested in prohibit that use? This prohibition could either be due to city or HOA restrictions, or outside the city limits, there may be deed restrictions on the property. If the property is within the city limits, you will, at a minimum, have to abide by city ordinances regarding limits on the number and types of animals you can keep. There may also be restrictions on growing food especially in the front yard. Be aware, if you buy a home with an HOA (Home Owners Association) you will be under even more restrictions. Outside of city limits, you need to see if there are and deed restrictions on a property. This can encompass a number of possible restrictions including, House – size, exterior materials, and type. I have seen a lot of restrictions on mobile homes. Animals – What types and how many are allowed. Use of the land – Do you plan to use it for agriculture or operate your business from your home. Can you park your work truck or store materials on the land? Listing agents do not always disclose restrictions. You will need to do your due diligence on these matters. Make sure you have a long enough option period in your contract so you and the title company have enough time to research this.
  5. Tax exemptions and land use – If it is a large enough piece of land, does it have an agricultural exemption and if so, what kind? Is the exemption for cutting hay, animals, bees or a wildlife management exemption? If you do not plan to use your land for the same purpose, you could lose the tax exemption. Along with this, see if you can find out the past use of the land. If you plan to have an organic garden or farm, I would recommend having the soil tested. If it was used for hay production, there is a good chance synthetic fertilizers and pesticides were sprayed on it. If possible, talk to the sellers. Most Realtors discourage this but  a chatty owner unknowingly can be a wealth of information to a buyer. (This is also true with talking to neighbors.) Do you want a large garden or to have a farm? If the property is heavily treed it can get very costly to clear.
  6. Other considerations – Depending on how you want to use your land, here are a few other things to consider. What type of soil does it have? What is the average rainfall and is it evenly distributed throughout the year? Proximity to what you need – Is it close to schools, hospitals, gas station, or grocery store? Drive the surrounding area and look at aerial maps to see what surrounds the property. If the property is landlocked, is there a deeded easement to the land?

This is in no way an exhaustive list of what you need to know when buying homestead property. These are the key points I look for when purchasing land for my own use or when working with a client.

Once you find the property you want to purchase, ask yourself; “How do I feel about this property?” Buying a house or land is not just a business decision, it is personal and emotional. For most, this is a huge financial investment, so always trust your instincts when making the final decision.

 

Let me know your thoughts. If you are looking for a home or land and are in Dallas/Fort Worth area please email me at livingwell.farm.tx@gmail.com. I will be happy to help you in your search. Not in the DFW area?  I know great agents throughout the US and Internationally that I can put you in touch with.

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