Buying Hunting Land — Part 3 of 3

A Beginners Guide

The first installment of this series discussed the preparations before you begin a property search, which you can read here. Part two discussed the steps and tips to help define your property search criteria and methods for evaluating properties against them, which you can read here. After reading those, you will understand the basics to identify a property for purchase. Unfortunately, that’s the easy (and most fun) part of the process. Next, you need to actually get an agreeable set of purchase conditions in place with the seller and begin working to finalize the transaction. While this can be stressful, knowing the process helps minimize the anxiety and increases the chances of a deal.

Negotiations

There are numerous styles of negotiating an agreeable set of purchase conditions with a seller. I would recommend leaning heavily on a qualified Real Estate agent for advice. I have seen several deals go bad because buyers wanted to get a better price and made an offensively low first offer. A lot of times the sellers are so offended they won’t respond, or worse yet they’ll respond with a higher price than originally asked. On the other hand, I’ve seen some cases where the seller had been trying for quite a while to sell the farm, and accepted the offer because they were just ready to move on. Knowing as much about the seller’s situation as possible will help guide your strategy.

Doing some homework at the county court house (or online assessor page) to find out how long the seller has owned the property, what they paid for it and when, who it was purchased from, any improvements that have been completed, any maintenance issues that may be present, why they are selling, and other pieces of background information will help you better understand the seller’s position. If it was an investment property for the seller, you can use some comparable sales date (ask your agent to assist with this), to better understand what similar properties in the area are selling for. Its likely they wouldn’t (or shouldn’t) have spent so much on the property that they couldn’t re-sell for a price similar to others in the area. However, if its been in the family a while, sentimental value is very hard to put a figure on.

Another point to consider is whether there are other current offers (or were there in the past). If you’re in a competing offer situation, this may dictate how long you want to extend the seller to review your offer.

Do some digging on the assessor’s site and work with your agent to determine the best place to start. Just be forewarned of the risk associated in asking the seller to accept a substantially lower price than they are requesting.

Structuring the Deal

In the market I serve, there are far more buyers than there are quality properties available. So, its wise to assume you aren’t the only one interested in a particular property, especially if its new to the market. If it has been on the market for a while, there are likely obvious reasons for that. For example, if it’s a small acreage intended for building a home, but 90% of the land is in a flood zone….it won’t sell very fast…..if at all. Or, it could simply be over priced for the area. Regardless of the case, when you have finally found the property you want, the goal is to write an offer that the seller is agreeable to.

Aside from purchase price there are numerous other factors to consider in your offer to purchase a property. There might be many other concerns for a seller than just the sale price. Here is a list of points that may make your offer more attractive to the seller:

1. Contingencies — These are sometimes looked at as road blocks to a deal. One example of a contingency is financing. If you have an Approval letter from your bank which allows you to make an offer without the delay of financing approval, your offer will be much favored over someone’s who isn’t. Just be clear with your lender on what gates need to pass before you will actually have the funds for the purchase. For example, if they require an appraisal (they will), you might want to include that as a contingency so you’re not left on the hook for a farm and no funds to back it up. Again, your agent should be able to direct you on how to cover yourself in this situation.
2. Earnest Money — In today’s market, you can anticipate needing 25–40% down to purchase raw undeveloped land. You can look into using equity for some of this, but regardless, it much more than that required to buy a home on a small lot. If you’re ready and willing to make the purchase, your Earnest money deposit expresses to the seller your level of intent. I always suggest 5% of the purchase price down as Earnest Money. This will go toward the purchase price and your down payment with a lender as well. But it shows the seller you are serious about your offer, more so than someone who comes prepared with a much smaller amount.
3. Closing/Possession Date — It might not be appropriate in all situations, but being flexible on the closing date (faster or slower as needed) can be a benefit to the seller. If they live on the property, removing their belongings might take some time. Generally on or within 45 days from accepted offer is typical, but given the sellers and extra few weeks might get your offer accepted. Its another opportunity to suggest a lower asking price, close within 30 days, and offer them free tenancy for a couple months as needed. Again, this might not be feasible, but consider it as an option. Just be sure to speak to your insurance provider about your responsibilities in this scenario.
4. Allow the seller to retain farm tenancy— If the property has some tillable acres on it, the seller might be concerned about their future income after they sell the farm. Assuming the new buyer doesn’t let them continue to rent the farming rights, they may need to rent other ground to still earn a living. Ensuring them a 1 or more year lease in the future might make the deal more attractive. Consider letting them farm the land for “free” for a specified period, in exchange for accepting a lower purchase price.
5. Use of Facilities — There might be grain bins, stock yards, equipment sheds or other facilities that the seller would benefit from using for a few additional months. Consider whether allowing them to continue use after closing would be a benefit and how you could include that into the agreement.
6. Hunting Rights — If the transaction occurs mid hunting season, it might be a burden for the seller to find a new place to finish out the year. Find out their concerns in this regard, and work to include concessions to allow them to finish out the current archery, or firearms season after close of the transaction. Or, consider leasing them the remainder of the year. Again, speak to your Insurance provider about any risks to be concerned about here.
7. Time to Respond — Everyone is busy these days, and sitting down to review a multi page offer that will have a significant impact on someone’s life can take some time to process. I always suggest buyer’s allow the seller enough time to respond to the offer if they were in the same situation. Sometimes that means a couple days, but the situation will really dictate that.

After you’ve made an effort to structure an attractive offer for the seller, waste no time getting it formalized in writing. Your agent can help you write the offer in standardized Offer for Purchase forms and submitted to the seller. You will need to submit the offer with an Earnest money check and understand that it will be deposited upon Acceptance of the offer.

The seller may accept, counter offer, or reject your offer. If you worked diligently with your agent to come up with a reasonable offer, it isn’t likely the you will be rejected. A counter-offer is common, and will outline any changes the seller requests to the agreement. Once everyone is agreeable, the contact is signed and you are well on your way to being a new property owner.

After Acceptance

Once the deal is agreed upon, you lender will order the appraisal, inspections and survey’s will get scheduled, sellers mortgage release obtained, and in Iowa we have abstracts that get updated and reviewed and title opinions created. All of this has to occur before closing, which typically takes about 30–45 days.

At closing, you’ll likely review a closing summary that shows where all the funds are being distributed, there will be documents signed and filed with the county recorder, checks distributed or funds wired, and at the end of it all you will have just successfully purchased your first piece of hunting land.

As mentioned before, its a long process, and it isn’t quite like buying a new car. You’ll likely ride the emotional roller coaster along the way, but it is well worth it in the end. Nothing can compare to owning your very own place to share the outdoors with family and friends. While this is a simplified overview of the process, I hope you’ve learned some helpful tips for buying your first piece of hunting land. Good luck and hunt safe.

Chuck Johnson is a Certified Land Specialist with Mossy Oak Properties, Licensed to sell Real Estate in Iowa.

For questions contact Chuck at: CJohnson@MossyOakProperties.com

If you have a request for an article on any subject relating to Whitetail Land Acquisition, Management, or Hunting, please submit it to:WhitetailFactory@gmail.com

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