Looking to buy some land adding to my current lot

[georgewe4]

Hey folks,
I have been given the chance to buy some land that is located directly behind my house. I currently have a 1 acre lot. There is 7.1 acres located behind me that is up for grabs. A neighbor of mine sold their house. They had a 2 acre lot that backed up to this land just like my house does. They sold their house with the option of the land going with or without the house. The new owners decided not to take the land. The land is land-locked. If I was to buy this land, I have the advantage of the land no longer being land locked. If I ever decided to sell the land I could make acces to the 7+ acres allowing the new owners access.
If I buy this land. I have no intention of adding it to my property. I would leave it seperate. If I sold my home, I would also give the new owners the option of house with extra land or without. I have no intention of selling for a very long time. I want to get a seperate loan. The land is being offered at 35,000. I have not made a counter offer of any kind. It is currently being leased by a local farmer for about 700.00 a year. The taxes run about 100.00 per year. I would be getting a loan to buy this land.
I have no intention of doing anything with this land. It would remain as is. The town here was interested, but....no money at the moment. Another neighbor, whose house backs up to this land also was interested, but no money. He would like to use it to run his 4 wheelers on. Its very quiet here currently. I personally don't want that noise from sun up to sun down. Nothing against 4 wheelers, I would love to have one but all day noise is excessive. He would take it that far.
How does banks usually work this? How much money down is usually required? Term of loan?

 

[BandAid]

Can you refinance your current mortgage (if you have one) and take an extra $35k out to just buy the land out right,I am probably doing this so I can build a garage,my loan now is $130k and I am taking a new loan out for $175k,that extra $45K will go to Garage/Driveway and pay some bills...:smile: I would snatch that 7acres up super fast(only $35K) what a deal....

 

[John Larkin]

If you do purchase the land I think it would be wise to do as you said: make access to it via your lot. I would do this on the front end. It could also lower the taxes on your current homestead since your lot will be a little smaller. That would be a positive to your overall tax bill. Just make sure it is zoned for residential and find out if adding the access causes you to be responsible for any future utility tie-ins. The city or county would be able to tell you all the details. It'll be a tedious, multi-step process.

One thing: the farmer leases 7 acres for $100 each per year? That sounds cheap.

Here's a mortgage calculator:
15 vs 30 Year Mortgage Calculator

 

[Turbo Indian]

if I'm not mistaken it's hard to finance land alone. I believe for a land purchase most banks require about 40% down payment. 35k sounds to be a good deal, but if the other land owners that border it do not have the $ for the land, then I would offer a good bit less. reason being it is land locked & the current owner does not have many options.

 

[Grumpy]

if I'm not mistaken it's hard to finance land alone. I believe for a land purchase most banks require about 40% down payment.

YUP... Banks want HOUSES not land ..

 

[georgewe4]

One thing that I plan on doing is offering less....How much? I don't know yet. 40 % is a lot for me to put down at this point. I am trying to think of another way to do this. I don't have much equity in my home at this point, especially with home values here in Ohio. It's not great here right now. We have lived here 5 years.
The people that own the land- she was the realtor that had our house listed. We bought our place through her. She was great to work with, I have no complaints. The land is land-locked. I don't know of anyone that would want it other than someone whos property borders it. From what I was told, no one else has the money. Has anyone ever heard of leasing land to buy? I was thinking about seeing if I could lease for a few years, maybe up to five years. A certain amount of money each month, with of course interest. All money other than the interest would be applied to the purchase price and at the time of getting a loan or paying for it I would pay the remaining balance. If I default then they keep the money. The money that is paid by the farmer goes to them until final payment and transfer of deed. I'm not sure who would pay taxes on the land.... It has been suggested that whatever the farmer pays to use the land should be applied to our balance... Im not sure about that. By doing this, I'm not sure if I can talk them down on price.
Any thoughts on this idea?

 

[BLACK6PACK]

See if the realtor will hold the note. She gets good interest and you don't have to qualify for a loan. Its the same as lease to buy, but instead of a very minor amount going to principle it starts taking quite a bit off from the beginning.

Just need a basic contract, and she can put a clause in there that if you don't pay for 3 months, she gets the land back and all money paid to that point.

 

[chadly]

See if the owner is interested in an option. Tell them you will put down $1000 now that will go towards the purchase price later. Then put a contract together that will sell you the property in X years at X price. This gives time for the real estate market to turn around. In a few years you should have some decent equity in your home and the land value should go up while you got the low price locked. During this time you have no liabilities to the property. In a few years if things are still slow and you change your mind you’re only out $1000.

 

[georgewe4]

Good stuff here. I plan on talking to them (the owners) after I talk to a few lending institutions. Hopefully by the weekend. They are both very busy people. She really has her stuff together, I'm sure that we can work something out. I don't think they will come down on price much if at all doing the financing this way. Oh well, I will try anyway.