If you’re like me, you’ve probably really needed to get away from it all for the past two years.
White sand beaches and exotic towns are a paradise for some. But my family and I enjoy the simple pleasures of serene lakes, rustling prairie grass, and peaceful woods.
In May, my partner and I decided to take the plunge and acquire a small recreational lot in Pine County where our family could camp, hunt, and just relax.
Our dream was common. Recreational land sales this year in Minnesota and a handful of other states will match or exceed last year’s near-record high, estimates PotlatchDeltic, a logging company that remains on top of the market.
Brett Anderson, adviser to real estate firm Brainerd Close-Converse and LandRadar.com, said demand for recreational land has increased, including with early buyers from the Twin Cities, as people seek to escape lockdown conditions . “Finding a 40- or 80-acre property where they can take their masks off was a good option,” he said.
Here are some things I learned during our land buying process and advice I wish I had before we started:
Know what and why you want to use the land
The first step is to really think about how you’ll use the land, said Jim Nelson, founder of family-owned Timber Ghost Realty in North St. Paul. Is it for hunting? Fishing? Do you want to build a house on it one day? If you eventually want to build on the land, you’ll need to explore things like zoning, utilities, and soil conditions.
What times of the year would you like to use it? What kind of animal and tree species would you like to see there? Would you consider a cheaper river property rather than being on a lake? How far can it be from the house? The further away the Twin Cities are, the cheaper the property is likely to be.
Look in winter
Many people buy their land in the spring or fall, but winter can also be a good time to look, Anderson said. With bare trees and frozen wetter areas, you can get a better view of the landscape and it can be easier to walk around. Since there was still snow on the ground when we looked at our property, we could see that the area was getting a lot of wildlife from all trails and droppings on the ground.
Ask lots of questions
In Minnesota, recreational land sellers don’t have much of an obligation to disclose information about their properties. So buyers should try to understand as many of a property’s risks as possible by asking questions, Anderson said. “You don’t have to buy the land if you don’t get a satisfactory answer before signing a purchase contract,” he said.
We texted with the seller and his realtor on a fairly regular basis about everything from problematic wetlands to the smell of fertilizer from a nearby farm. It never hurts to ask and I was grateful that I was able to learn so much before buying the property. Many counties have digital maps that can provide information on wetlands, soil types, and other valuable data. Mobile apps like onX Hunt are also useful and show property lines.
Remember to ask questions as you go through the various stages of the paperwork process. A day before closing, we inquired about an error in the closing documents, a decision that saved us $1,000.
Use a real estate agent with real estate experience
We did not use a separate real estate agent to represent us and ended up having the seller’s agent facilitate the transaction. Our own agent probably would have saved us some money. It’s helpful to use an agent with actual experience selling land, as the process can be quite different from residential. Anderson’s LandRadar.com offers a toolkit of helpful resources, including a checklist for land buyers.
Make sure the details are spelled out
Our deal nearly fell through over a disagreement over a deer stand. The seller said the shed and a deer stand were to accompany the property. Late in the process we learned that he was referring to a second deer stand on the property and not the larger, more expensive one that was prominently displayed on the lot. Make sure you and the seller specify exactly what items and tools will remain on the property. Bargain for things like chainsaws, lawnmowers, wheelbarrows, and utility carts. It can end up saving you a lot of money and time in the end.
Determine accessibility before finalizing
Our land is on a poorly maintained dirt township road. Accessibility determines usability, how many seasons you can enjoy your property, what you can bring to it, and how easily it would be possible to add utilities.
For us, we knew we wanted to put an RV on the lot, so the road had to be good enough to haul our trailer. We also checked with a portable toilet company before closing the deal to make sure they could get a truck on the road. If we couldn’t have had the toilet serviced, we wouldn’t have bought the property.
Explore different financing options
Seasonal cottages and recreational land don’t qualify for conventional mortgage programs, according to Tom Willie, branch manager and vice president of Northview Bank, based in Finlayson, Minn. A recreational land loan is a product that banks can keep in their own loan book instead of being sold to Fannie Mae or Freddie Mac, which often happens with home loans, Willie said.
Banks that finance land purchases have different rates and terms. Some banks do not finance land at all, or only do so in a certain area. Some lenders also offer land or lot loans to buyers of vacant land who want to eventually build new homes. Down payments will usually be a bit higher, up to 35% of the overall price. But Northview has funding for as low as 10%, Willie said. Good credit is important, of course.
Obtain a survey and/or an assessment
A certified survey will provide the most information about restrictions, easements, covenants, rights of way and property lines, Anderson said.
If you are paying cash for land, you do not need to obtain a land appraisal. But I found our property assessment very helpful in making sure we made the right financial decision. The appraiser reviews the land purchase, analyzes market conditions and walks through the property to identify unfavorable conditions. Our appraiser’s analysis of comparable land sales was also very helpful.