Buying land?

Water!   To much or not enough.  Either way it's not good.  If you want to hunt it, stand in the middle of it and look for your shooting lanes.  I looked at a quarter and every way you looked there was a neighbors house or barn.  Somewhat of a concern for rifle hunting or bird hunting.  Good luck!

Loans are a little tougher to obtain when there isn't a "home.  You can typically expect to have to put 20% down.  You may want to check with the local banks of where you are purchasing as somethimes they will have special programs so you can get by with 15% down.

In NW part of the state you can expect to pay 1500 per acre that what it is going for up here. Pasture land was sold for 667 per acre. Some CRP sold this spring and brought 1100 per acre.  In NW ND a water well will cost 22.50 per foot  my 330 foot well cost 8877.00 this spring and that was hooked to the house.  east of 52 there is rural water but you have to pay to dig it in from the supply line

Cost of land aside, here is a couple other money things to consider.


1.  15% to 30% down is norm from the banks I have talked with.  As a first time land buyer, you will have to have the cash.  Don't think they will let you use the equity in your house to cover down payment side.

2. Even with morgage rates at all time lows, you are looking at 5%-7%.  The longest you can lock in is 5 years.  Most banks prefer to do 3 years after which time you are at the mercy of interest rates at the time the loan is up to finance your balloon again.

Even is you build a place on it, they will not allow you to put more than 10acres and the house onto a morgage, rest at terms stated above.

Now everyones credit, bank, and buddy may find different deals, but this is what I have found in my personal experience.

 

If you have enough equity in your house to cover the purchase get a home equity line of credit so yo can write it off.

Grizzly Bear Said:
Loans are a little tougher to obtain when there isn't a "home.  You can typically expect to have to put 20% down.  You may want to check with the local banks of where you are purchasing as somethimes they will have special programs so you can get by with 15% down.

Yeah still makes me scratch my head how land is worthless in the banks eye unless there is a building on it.

Depending on what part of the state you're in, I'd check if there is a 'Farm Credit Services' in your area.  They will take 35% down as noted by some above, but the interest rate for the variable rate is currently 3.9% amortized over 25 years.  Plus since they are a Co-Op, you get a 'profit' sharing check each year so the actual cost is even less - doubt you'll get one of these from any bank.

You can get a fixed rate of around 5.5%, but that's only locked in for 5 years I believe.

Goosefishmen (That's quite a name) is dead on.  It's quite a racket if you ask me.  That's just what I had to deal with when going through my last land deal. 

Tim Sandstrom Said:

Grizzly Bear Said:
Loans are a little tougher to obtain when there isn't a "home.  You can typically expect to have to put 20% down.  You may want to check with the local banks of where you are purchasing as somethimes they will have special programs so you can get by with 15% down.

Yeah still makes me scratch my head how land is worthless in the banks eye unless there is a building on it.

I honestly believe this is a ploy used to control the price of farm land.  If it starts going crazy it'll be really bad. 

Thanks for the info guys. Looks like I'll need to save up more!

Anything I've seen lately around here is up for auction.  I've wanted to do the same, BUT, you show up and bid against the guy with the biggest checkbook.  Some of them are so greedy they will go way over actual value, either an out of stater with big $$ or a big farmer that wants it.

LIke any investment, you have to run the numbers and understand the risk.  The numbers get a lot easier when you can pay cash.  and have a 10 CRP garantee. 

HUNT,

When I was in the hunt (same time as ole goose was) I had dug up all kinds of information, links, made copies, printed stuff, etc.  It has been awhile and I've lost most of that paper trail.  But the point is, call some banks, call the USDA, etc and find out what kind of programs may or may not be available.  I found a couple that were pretty darn sweet but the other end (the seller) kinda put a kibosh to me when the price of land jacked up well over 2,000 an acre.  That was stinging a bit.  So I got frustrated and just settled on being a damn city boy.  Grrr...

 

Goosefishmen Said:
Cost of land aside, here is a couple other money things to consider.


1.  15% to 30% down is norm from the banks I have talked with.  As a first time land buyer, you will have to have the cash.  Don't think they will let you use the equity in your house to cover down payment side.

2. Even with morgage rates at all time lows, you are looking at 5%-7%.  The longest you can lock in is 5 years.  Most banks prefer to do 3 years after which time you are at the mercy of interest rates at the time the loan is up to finance your balloon again.

Even is you build a place on it, they will not allow you to put more than 10acres and the house onto a morgage, rest at terms stated above.

Now everyones credit, bank, and buddy may find different deals, but this is what I have found in my personal experience.

 

That is pretty much spot on with my experiences. You will no doubt have to put cash down but like anything the better your credit and the more equity you have the easier it will be. Expect a short term loan for sure. 

kjs Said:

Depending on what part of the state you're in, I'd check if there is a 'Farm Credit Services' in your area.  They will take 35% down as noted by some above, but the interest rate for the variable rate is currently 3.9% amortized over 25 years.  Plus since they are a Co-Op, you get a 'profit' sharing check each year so the actual cost is even less - doubt you'll get one of these from any bank.

You can get a fixed rate of around 5.5%, but that's only locked in for 5 years I believe.

I think it depends on the use of the land. When I bought some a few years ago FCS was the first place I had in mind so I talked to them and they didn't want to offer me a loan. Mine was somewhat of an "investment" property. I wanted to buy the land for use somewhere down the road, build a place on it, etc and they didn't have a loan for me. I'm not sure if it had something to do with it not being ag related or what it was.

I f you ever want to build on it, you'll eventually need power, water and a driveway. Look for where existing utilities are...it can cost a bundle to extend a powerline or rural water a mile, even more to build a long access road/driveway. Need to also consider what might happen for development around you...future coal mine, wind farm, gravel pit, oil well or feed lot? Last but not least, drainage...is there a spot to build that will be out of the flood plain that also minimizes all the above costs? Good luck on making your dream a reality!