You have saved a big amount of money in your savings account. It is now time to get down and buy a piece of land in cash.
The starting point sometimes can be so overwhelming and it might get tougher when due diligence is required to successfully close the land deal.
There so many benefits of cash purchase as you won’t be beholden to a loan and its interest from your financial institution.
Although there is no blueprint to follow in making cash purchases for land, we have compiled some proven steps that industry experts recommend.
1. Consolidate all the cash
The first step is perhaps consolidating all your funds into one account. If you have in the stock market or forex market, it is advisable that you withdraw and have them in the most liquid form which is cash.
Perhaps you will need to consider talking with a financial analyst to advise you on the tax implications of withdrawing such funds from those accounts.
Having all your cash in one bank account makes the closing of the deal smooth.
2. Obtain proofs of funds from the financial Institutions
What you need to have next is a bank statement or in some cases have a letter from the bank indicating that you can afford to pay up to a certain amount.
This letter is often sent out together with the letter of offer.
3. Find your land
The fun part of “window shopping” for land begins. You can utilize referrals from your friends, or use real estate companies that do listing of plots for sale.
“Location, location, location is key in real estate. You locate land in a place where there is developed infrastructure or where development in the area is fast-growing, is a sure bet on land appreciation in value,” Says Reuben Kimani, CEO username Investment limited.
You can work directly with a real estate company that has developed the land property. This is by far the easiest and safest way to buy land with cash.
4. Find the offer
Once you identify the land you are interested in, you are supposed to send an offer letter with a bank statement or bank letter.
You are supposed to send earnest money to show the seriousness of your offer.
5. Choose settlement agent
Even though this is a cash purchase, it is important to have a settlement agent who will be their fiduciary agent over the transaction process.
In some scenarios, the settlement agent act as an intermediary between the land seller and land buyer.
A settlement agent can be your attorney as they understand the land clause and contractual clauses better.
6. Do the site visit
Now you are now almost getting things done. You are supposed to organize a day to tour the land in person so that you can know how your land will be looking like on the ground.
During the site visit, you can have a list of questions to ask the seller that you think is important.
7. Take part in a title search
A title search is a very important step when buying a piece of land. You participate in doing the title search as it will tell you who the exact owner of the land, easements on the land, and if there are any liens on the land.
8. Consider a land survey
You have verified the rightful owner of the land, the next thing you need to do is consult a land surveyor to ascertain the size of the land and mark the boundaries properly.
Some parts of the land couldn’t be usable because of easements that exist on the property. For instance, the land you want to pay could be 40 acres, but because of the public right use of ways, you can have 39.5 acres being actually size that you can use.
9. Secure check for payment
In the land purchase or any property that involves a large amount of money, a cashier’s check is only used. Neither do personal checks is accepted nor cash accepted.
So when ready to purchase, you will need to do an arrangement with your bank to ensure that the money is in the accepted check.
Now everything is ready, you are now ready to complete the payment. You will need an identification card and other documents that your settlement agent will ask you to come with.
10. Do title deed transfer
Once you have made full payment, you will need to start the processing of the title deed transfer. This will be the final step in your land acquisition process.
11. Come to the closing
Finally, you are now Landowner! Did you want to use the land to build your home or for your family? You can go ahead and start doing whatever use you intend to use. You are free from a loan!