Working with buyers is always a gamble – nothing personal guys. I’ve spent literally years working with buyers only to have them call on a sign and write a purchase agreement with another Realtor. It happens. I don’t lose sleep over it… anymore.
Some people just don’t realize that I can sell any listing even if it’s listed by another real estate agent. It doesn’t matter whose sign is out front. If you drive by a sign or see a property on a web site – that’s fine – just tell them you’re already working with a Real Estate agent and I can set up the appointment and write the Purchase Agreement. It’s how I get paid back for gas and chips. If it’s not my listing I become your Buyer’s Agent (sounds like 007). As a Buyer’s Agent I represent you.
So if you don’t see what you’re looking for on this web site just let me know. I can hunt statewide AND agent-wide for just what you want.
No Surprises On Property Taxes
People looking at a property ask me, “How much are the property taxes?” Quite honestly, it doesn’t matter what they are. Wow, that was harsh. It doesn’t matter BECAUSE as soon as the property is sold the taxes are going to go UP. Really.
Remember in the 80s when they put property tax caps on everything? Once a property is sold that cap comes off. It’s fair game for Uncle Sam. If the person selling the property has owned it for 30 years their tax bill will be MUCH lower than what the new owner will pay. Taxes are based on Taxable Value NOT State Equalized Value. Make sure you know the difference.
Also keep in mind that if the current owner lives at the location they pay a lower tax because it is “homesteaded”. If you purchase the property and it will not be your primary residence you will pay a higher rate.
There are a couple different ways to find out roughly how much you will pay in property taxes:
- Call the township assessor
- Go to Michgian.gov Property Tax Estimator
Land Contract Vs Bank Financing
Yes, there are Land Contracts available but you need to think about a few things…
Most owners require a significant down payment, a good credit report, and an interest rate equal to or higher than a bank. Short term contracts are common which can equal a higher monthly payment.
It is pretty important that you get an attorney to draw up a Land Contract. I have actual knowledge of people buying a home on a Land Contract and making on-time payments for a few YEARS. What they didn’t know is that the people they were buying the home from WERE NOT making THEIR payments. That’s right, the people who they supposedly where buying the house from still had a mortgage on the home. The new owners never knew about the problem until the sheriff showed up on the porch to foreclose on the home.
Another consideration… if you own property on a Land Contract usually the owner will not allow you to make any changes to the property. If you are hoping to clear a few trees for a food plot or to put up a barn for your toys, you may need the owner’s approval.
Why do some owners require a large down payment on a Land Contract? Because if a buyer defaults on the Land Contract they want to make sure their costs are covered.
When people ask about a Land Contract I generally mention that banks will finance vacant land. Some people don’t know that! Vacant Land financing has only been around 10 years or so. There are many banks that will finance Vacant Land. Check with your bank. One bank that offers up to 30 year financing is Greenstone Farm Credit Services. You can check them out at Greenstone.
Are There Ever Vacant Land Repos?
Yes – BUT not like you see in the home market. Below is a brief explanation as to why we don’t see as many foreclosures in the Vacant Land market from November 2010 by Dave Troyer who was VP–Facilities at Independent Bank.
“Banks, or at least my Bank, does not write down vacant land value until they have to by regulation or rule. My management feels that vacant land has no real reason to reduce in value since there is nothing on the property to depreciate and as the old saying goes “they aren’t making any more land”. But, there isn’t a whole lot of demand for vacant land right now either since people can pick up land with a home on it for so very cheap.
By FDIC regulation, if a bank holds an ORE property in its portfolio for 1 year they have to get a new valuation of the property and write down the book value to that amount less any costs to liquidate the property or have a documented reason why not to write down to that value.
Luckily for the bank, there have been so few sales of vacant land that most appraisers cannot certify or justify substantially lower values than what the properties are currently on the books for, so we have been able to hold the values where they are.”
From time to time I do get bank owned properties and that information will be included in the property description. Vacant Land foreclosures exist but not in the quantities you see in the home market. In the latest recession Vacant Land seems to have held its value better than the housing market.
When looking at property understand that a Realtor is not guaranteeing the property measurements. That is why you often see +/- when referring to acreage. Keep in mind that price is not negotiated at “price per acre” so a discrepancy in acreage won’t generally change the price. If a survey doesn’t exist you may want to consider having one.
Zoning Ordinances And Building Codes
Big plans for your new property? Make sure the township is as excited as you are. Things like campers, pole barns, square footage requirements, animals per acre and a number of other land uses can be regulated by local ordinances. First hand information is your best argument if there is ever a dispute.
Purchase Agreement Is A Binding Contract
You finally find the perfect property and write a Purchase Agreement (PA). Remember… once the PA is signed, it is a binding Contract. If a buyer changes their mind about buying the property (for any reason other than something written in the PA) and tries to back out of the purchase it is considered a breach of contract. The buyer can lose their deposit or can even be forced to honor the contract through legal action.
Earnest Money Deposit
An Earnest Money Deposit (EMD) is required from the buyer once both buyer and seller have agreed on price and the Purchase Agreement is fully signed. $1,000.00 is an average amount for an EMD. The check will be deposited and held in my Brokers Escrow Account until closing at which time it will be applied to the price of the sale. The EMD check will need to be made payable to Hunting 4 Land LLC.
I advise my clients to have all paperwork pertaining to the sale of property reviewed by an attorney.