7 Towns Where Land is Free

As small towns suffer from a continuing flight from rural toward-more urban living, some economic development groups and governments in these troubled areas have chosen to stay and fight.

As with the homesteaders of the 1800s, the new pioneers must not be the faint of heart-they can't be the type to shy away from the trials of building a home from the ground up, or the lack of Starbucks on every corner, or unpaved roads...read the rest of the story HERE.

See a slide show of all 7 HERE.

New Richland is a town of about 1200 in southern Minnesota, 75 miles from the outskirts of the Twin Cities, offering lake recreation and many fine churches. If this sounds like home, then consider a free 86’ x 133’ lot on the Homestake subdivision on the northwest side of town. Those who claim lots must build a house on the property within one year.

New Richland, MN

Buying Land with Existing Improvements

Hello Carl,

Your website has been a huge help. Thank you for all you do.

My wife and I have found a lot that has had a foundation and basement poured
on it.

The original owner of the lot was not able to complete the project.

The lot has been purchased by a home builder; he is currently selling “as is”.

The home builder commonly works in an area about 45 miles away. He is
selling this lot with the basement around the same price as other lots in the
area.

We feel that this could be a huge opportunity to save money.

We have a set of plans that were to be built on the basement. We were wondering what
we should look at before making this purchase.

We are planning to have our concrete contractor to take a look before going forward.

Do you have any other suggestions?

Thanks! K. & A.

Hi, K & A

The fact that you already have a concrete contractor tells me that you are serious and raring to go.

Even if your concrete contractor thinks it looks OK, you should still have it inspected by the local building inspector, and by a structural engineer (SE). An SE should only cost a few hundred dollars. You can find SE's in the Yellow Pages under “Engineers-Professional-Structural" or through ServiceMagic (click on Architects & Engineers, then click on Engineer - Structural).

Unfortunately, damage to concrete in an unprotected and unweighted (no house on it) foundation from freezing and heaving earth can remain hidden for years, and the foundation is the most important part of a house. Make the SE inspection a purchase contingency to the seller. In, fact, the seller might (should) pay for it.

Get a market analysis from a local Realtor as to the lot value “as is”. You need to see if you are paying too much for an empty lot in that area.

The “as is” basement has absolutely no value to add to market value, but you have wisely given that basement full value by building the house that it was designed for.

Get a Title Insurance Policy with “no exceptions” at the time you buy the lot. The seller should pay for the policy. This should protect you from any potential liens from unpaid subcontractors or suppliers, breaks in the chain of title, etc. that may be floating out there.

Before you make a final decision to buy the lot, get a separate market analysis from that local Realtor as to the value of the finished value of the house and lot together to be sure you are NOT overbuilding for the area.

Before you make a final decision to buy the lot, run a (several) cost analysis on what it will cost to build the house.

Go to my "Getting Started" page, and using the "Cost to Build Calculator", plug in the answers to the questions. When you have finished, you will have an estimated (approximate) total cost to build your new house in your zip code.

Then, and only then, if the “numbers work” would I make my decision.

You might want to read my “Buying an Unfinished House”.

Sounds like you may have found a good deal.
Good luck,

Carl

Buying Land Without a Real Estate Agent

My husband & I are looking at buying land that is for sale by owner (so no
real estate agent is involved).

If we make an offer what would you suggest the contingencies be with the deal? (Perk test, title insurance, survey...?)

Also who typically pays for these, the seller or the buyer?

Thanks,

Shannon

Hi Shannon

Everything in real estate is negotiable...everything!

In a buyer’s real estate market (now) the seller usually pays for everything.

As the market shifts to a sellers market, the negotiating power of the buyer shifts in favor of the seller.

A perk test, title insurance and survey are just a few of the contingencies I would want.

Other contingencies I would insist on (in no particular order) are;

• A guarantee it is a buildable site as evidenced by obtaining a building permit BEFORE paying for the land
• A guarantee of construction and/or permanent financing, or land financing*
• Potable water is guaranteed
• Assurance that my house design will fit the site to my satisfaction (need that survey)
• A soil analysis
• The location of the septic field and tank (and the well) as required by the local health /building inspection departments
• Everything else that’s on my Checklist for Buying Land
• As well as anything else you can think of or that concerns you

Land represents a healthy chunk of money in building a new house.

Don’t cut corners in the process of buying.

There is a lot of work involved in buying land.

Mistakes and omissions can and do occur, and rectification, if any, can be costly and/or time consuming.

I would not dream of buying a piece of land without professional help…not even a piece of land in a subdivision.

The use of a Real Estate Lawyer and/or a buyer’s agent (Realtor) to act as a facilitator and a source of recourse if things go bad is wise.

You don’t need but a couple of hours with an attorney to draw up and review a buy/sell agreement.

And, a (Realtor) buyer’s agent should be willing to work for you at a greatly reduced (negotiated) fee. In return for their fee, they should save you a bundle of time cutting through red tape and gathering information.

More importantly, a Realtor, through their access to their local MLS (Multiple Listing Service) can pull up comparable land sales and help you determine if you are getting a good deal.

Remember, I learned everything the hard way.

Here are some additional articles I have on www.byoh.com that you should find helpful:
• Land Surveys
• Land Surveying-Placement of Your Home
• Buying Land Tips - Soil Analysis
• Buying Land to Build On
• Is it a Buildable lot?
• Is it a Buildable lot? – Part 2

Best of luck,
Carl

* Since there are NO real mortgage financing, or loan guarantees, you should hold off paying the seller for the land until the actual closing of your mortgage or loan…EVEN IF YOU PAYING CASH FOR THE LAND!

Advantages of Buying Land in a Development

Hello Carl!

Thank you for all your wonderful resources! We are in the process of buying a lot to build our first home on so it's nice to have a resource like this where all my questions can be answered in one place!

I have one question regarding a boring test. I read the response you gave Rob C. in the question titled "Buying Land Tips - Soil Analysis."

You mentioned that you need a boring test if you're in an area where there is not much development around. We have found a lot in a cul-de-sac with a house to the left, the right, and at the back. Is a boring test still necessary?

There is also a high water table on this lot since it is across from a lake, how will that affect our plans to dig a basement?

Thank you for your website and all your help!
Melissa

Courtesy of Vulcan Waterproofing.

Hi Melissa,

A basement in an area of high water tables is often called an indoor swimming pool. That's a (bad) joke.

But seriously, unless the lot slopes enough to build a walkout basement, I wouldn’t build anything below grade, including a crawl space.

As for the boring test, it's probably either been done or a geotechnical investigation may have been done by the subdivision developer.

One of the (many) benefits of buying a lot in a development is that all the expensive and often exhausting “development” work; surveys, geological surveys or geotechnical investigations, topographical maps, roads, sidewalks, water or well analysis, sewer or septic perk tests, electric, gas, cable, etc., (ad infinitum!) has been done for you.

That's how subdivisions get approved by the state and local authorities.

So, a building soil analysis for the entire development should be “on file”.

If not, the seller should pay for one for your lot because the presence of a high water table and nearby lake makes me suspect of the solidity of the subsoil.

I would want one.
Carl