A Step-by-Step Guide for Purchasing Land in Iowa
1. Securing Financing
Obviously, cash is always the easiest option when it comes to buying any acreage. However, for most this is not an option, so you'll need to look into a land/construction loan. Securing finances ahead of time is a must as it benefits you in several ways and should be the first step in your real estate search. First off, it familiarizes you with the process and can help alleviate any surprises you may have been unaware of ahead of time. Another big benefit is that sellers will take your offer more seriously if they see that you are pre-approved. So, where do you start?
Most of the time in rural purchases the best lender will be a local lender that understands the area and will be much more willing to offer a loan:
1. Farm Credit System specialize in rural transactions, with vast resources specific to rural land purchases. Some good local options are:
2. Local Bank or Credit Union in the county that you are going to buy land from. Not only will these lenders understand the area but they will have relationships with local surveyors and appraisers which can expedite the buying process. Great options are:
3. National Bank chain - These can be an option but community banks and credit unions are much more likely to offer land loans than large national banks.
2. Finding an Acreage
Call or text me at 515-229-5642 or fill out this quick form for real estate listing alerts and I can set you up with a search matching your criteria and we can start scheduling showings as soon as you wish. That being said: Always get a buyer's agent. Even it is not me, get yourself a buyer's agent so that you can make sure you have knowledge on your side when it comes to the local market, contracts, etc. It is of no cost to you to have a buyer's agent as the seller generally pays for this service out of their proceeds.
3. Offer & Contract
In hot markets, offers go above and beyond the asking price. However, often seller's know this and list their property too high. Make sure your realtor knows the current market and can get you a fair price.
Inspection option period---the specific number of days you will have to review the property, this is usually 10-30 days. 10 days is the norm. During this time any inspections you wish to have done need to be completed.
Closing Costs---2-5% of overall transaction. Normally, the buyer pays for the actual closing costs but this is a subject that absolutely can be addressed and negotiated (like EVERYTHING in real estate!)
Closing date -be aware of extra constraints as you may need to allow a little extra time for such things as land surveyors and appraisals as they are often in high demand. It is not the norm but sometimes during peak times in a hot market rural dates can sometimes be pushed out 45-60 days, so be aware.
4. Property Inspection
This is a great opportunity to assess the land and make sure that it will suit your needs, purchasing land sight unseen is never recommended. Get on the land, look at it and see if it is right for you. If there's no house on the property you will get to skip the septic inspection but I can connect you with any resources for any inspections you'd like to have performed.
5. Rural Surveys
Rural surveys are not the same as those done in the suburbs. Rural surveys are meets and bounds. Most lenders will require a recent survey as well as a title company will require the survey. In most instances, the survey will have already have been done before the seller lists the property.
6. Title
Title Commitments is a commitment for title insurance. The general turnaround time for this is 2-3 weeks to get a title commitment back.
7. Closing
This is where you sign the final paperwork and pop the champagne!
Ready to get moving? Contact me today to get started or head back to searching acreages for sale in Iowa!