mowed field

The Costs of Settling Raw Land: What to Know before You Make an Offer

infographic describing costs to buy land costsThis post was originally published shortly after we purchased land and edited in 2020 to include links, photos, and hindsight.

by Beth

Buying land sounds like a great plan. Land is finite, so as the population increases, so should the price of land. That acreage you pick up for a song today could be worth an album tomorrow.

Or not. When it comes to figuring out what a parcel of land is really worth, a little homework can go a very long way. In our case, it helped us better understand the costs of our goals and adjust our offer to stay within budget.

Our Perspective

Land goals and topography come in infinite variety. What we’ve experienced in the Southern Appalachians may be extremely different from experiences in the Ozarks, the bayou, or the Sierra Nevada. Here’s more about us so you know where the advice in the post is coming from.

We shopped for land in the Southern Appalachians, so this post has a focus on features you encounter in misty, lower-elevation mountains, like steepness, rocky soil, and tree density.

We wanted land for an on-grid homestead. Flat, cleared space and access to utilities were important to us.

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We chose our county for its beauty and convenience to family, a National Park, and several cities. It also happens to be in the top 10% of economically depressed counties in the nation and has extremely light permit requirements.

This means we don’t know much about permits, codes, zoning, or inspections. In fact, I called the County Manager’s office to inquire about local code requirements, and the County Manager answered the phone himself. It’s a small operation over there. He said we could pay a building inspector if we wanted to but there isn’t one serving the county.

Lastly, we shopped for land as outsiders, meaning we had to learn not only about buying land but about the local landscape. We had to build contacts from the ground up. It did help to work with Realtors who grew up here.

Closing

#landgoals

Though it would evolve, we had a basic vision to direct our search for land. We wanted to be on-grid, build alternative housing style (geodesic dome), raise animals, hunt, maybe run a commercial business off the land at some point in the future.

LangshaninChickenTractor-4weeks

Land can have zoning that would preclude certain types of structures or activities. If you’re reading this, you may be thinking of escaping restrictions, but having some oversight isn’t always a bad thing. The same zoning that keeps you from having chickens keeps your neighbor from starting a strip mine.

In our case, there are no restrictions and no noise ordinances, so we chose land where the homesite would be buffered from future development as much as possible. We observe common courtesies (our yard is pretty, our dogs aren’t left outside to bark) and enjoy planning our land’s layout with total freedom.

Be aware that rural HOAs exist and can restrict livestock and commercial activities. A property’s listing should immediately clue you into whether any restrictions exist. Talk to your Realtor, and to neighbors if they’re available, and carefully read all documents to make sure your land comes with the level of oversight you want.

Land Pricing

Have you noticed that, in the same remote ZIP, you’ll see 1 acre listed for $60K and 80 acres for $100K? Why the price difference?

In rural places with cultural cache and natural beauty, unfortunately there can be a, “Let’s see if we can dupe cityfolk into paying X” approach. It’s common for sellers to list land at a hopeful price but be willing to take much less. It’s also common for people to list at an exorbitant price because they don’t really want to sell but will for the right amount. You’ll have to catch them on a good day if you want the price to come down.

There are plenty of more concrete reasons for the price variation. Aesthetic features increase value, like water frontage or a mountain view, and you can potentially save 5-6 figures if any of the following is in place:

  • Driveway – Not just a dirt track, but a graded, surfaced access road
  • Cleared, flat space – Especially if it’s southern facing; full sun is a commodity
  • Well – Be sure it’s tested for quality, in good working order, and not ancient, since wells have a shelf life
  • Septic or sewer connection
  • Power connection
  • House pad – It should be inspected to make sure it will bear weight safely, and it may not be in the place you want it, but if it checks out, a completed house pad is an asset

Meanwhile, the 80 acres for 60K may be steep, with a rutted driveway, zero cleared space, and more invasive than native trees. Not only could it easily cost $100K to build a driveway, run power, and dig out a building site, the area has been so logged that you’ll be fighting a battle against dangerous erosion for the rest of your days.

Learn BEFORE You Offer

The more homework you do pre-offer, the happier you’ll be with your land and what you paid for it. Here are some critical considerations that can alter your offer or even help you avoid purchasing land you can’t use.

The Almighty Perc
A “perc” or percolation test is the standard diagnostic for determining viability for a septic tank, and it’s critical unless your land hooks to a municipal sewer system, in which case, skip to the next section.

If there’s no city sewer and your land won’t perc, you can’t build a dwelling there. If land only percs in one area, you can only build at that area. Even if you’re planning an alternative or composting wastewater system, the construction of a new dwelling just about anywhere requires some form of septic permit. It’s a public-health thang.

Not planning to build? The perc is still important because the market value of the land – and your offer – will be reduced if the soil won’t perc.

How do you know if a piece of land will perc? It is possible to eyeball with some soil types. Sandy soil is best. Our land sits over sandstone and limestone, and everybody who walked it with us was so confident it would perc that we didn’t hire a professional to confirm before making an offer. However, we did make our offer contingent on a successful perc at our chosen building site (the one with the view of the Smokies).

If you don’t have a sense of confidence from basic soil observation, google “perc test [your county]” and pay someone to confirm the land will perc prior to making an offer. It’ll cost a few hundred $, but is too important a step to skimp on.

Power
Running power can be expensive, especially if your land isn’t near a road or existing line. To determine costs to power up your land, call the local utilities company and ask a representative to walk the acreage with you for an assessment, along with an overview of their pricing and finance options. They can point out obstacles such as trees, rocks, and right-of-way access to help you factor in excavation costs.

planning with the power guy

Do this before making your offer. If you aren’t planning to be on-grid, your offer should still take power into account, since land without easy grid access will have lower market value.

In our case, to stay within budget, we reduced our offer by $20K after learning the potential cost to run power to our land.

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Water
If your land doesn’t already have an established (and working!) well or connection to municipal water, costs for safe water access can add up fast.

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In our area, people do still hook to springs for their water supply, with the costs being a few spools of HDPE water line and excavation to dig the line into rocky soil below the freeze line. The catch is that you have to have rights to that spring, or somebody will cut that line as soon as you put it in.

You can source water elsewhere and carry it to the homestead. People who do this say it’s one of the fastest paths to homesteading burnout. Water is a heavy, constant, pressing need, and money spent on access is well spent on the quality of your life.

Since no water system was established on our land, we reduced our offer by another $7K, not enough to cover the cost of a well but a comfortable middle-ground for our budget. If you plan to hook to municipal water, estimate the cost by balancing the quotes from 3 excavators to trench and run water line.

If it sounds like a lot of work to walk your potential land with 3 contractors prior to making an offer, homesteading will be too much work for you. Real talk! This is just the beginning.

If you decide on a well, there’s no such thing as predicting the cost, but there are ways to identify a price range. Have 2-3 licensed, respected well companies out to provide quotes (poorly installed wells can cost much more in the long run, so this is another place not to cut corners). Talk to neighbors about their well depths and what they filter and treat for.

If you’ve never commissioned a well, see our well story for an idea of what to expect.

well drilling trucks drilling a well in east Tennessee

Right-of-Way and Access
If your acreage lacks direct access to a road, make sure that a right-of-way has been surveyed and deeded to your land. It should not only be open to you in perpetuity; it should give you the right to run utilities up this route if necessary.

The italics are there because this is so important. Get this in writing and make your offer contingent upon it.

Here’s our right-of-way in all its glory. May not look like much, but access is everything. Our future home will be 1/4 mile up this road…if construction trucks can get to it.

December woods

Confirm there’s a current survey in place. If not, propose the seller have one completed. Surveys are vital to protecting your rights as an owner, and there ought to be one on file before they sell the land to you. It’ll cost them a grand or more but is a legal necessity, so walk away if there’s no survey in place and the sellers won’t work with you. That’s shady.

If your right-of-way isn’t graded and surfaced, you could be looking at a massive cost, but it’s another necessity. Consult 3 excavators for quotes to grade and crown a long-term driveway into your property.

Prepare for sticker shock depending on length, drainage, and obstacles. Excavation is expensive, even if you do it yourself, because equipment and gas are expensive.

Here are our guys helping us clear kudzu and dying trees for power up the right-of-way, with healthy trees flagged. Years later, the persimmon on the right is still dropping fruit for happy wildlife.

excavator

Easements, Zoning, and Restrictions
Zoning can protect you as much as it can restrict what you’re allowed to do with your land. We were sensitive to restrictions because we’re planning to build a geodesic dome, raise animals, hunt, and want the flexibility to change our minds about any of that. Maybe we’ll dig an earthship into the hillside or start a commune. For better or worse, our land has no zoning, so all decisions are up to us.

standard land listing
Standard land listing

The downside is our neighbors are zoning-free as well. If you’re in a similar situation, you may want to seek land with natural barriers like mountainsides and woods around its perimeter to block your view of future salvage yards.

The online listing for a property should note whether there are any restrictions or zoning to ask about. Either way, ask the seller’s agent and/or your Realtor to confirm in writing what the zoning and easements are for this land.

Oh yeah: easements. This is someone else’s right to your land. Have you ever seen a City erase a chunk of someone’s yard to expand a road? Easement. Our right-of-way is an easement, too. It cuts across the land of 3 other owners. Of course, they use it as their road, too. Easements can be bad, benign, or beneficial. Sometimes you’ll receive royalties for resources pulled off your land, like oil or gas.

Some easements, like mineral rights under the ground, can be exceedingly difficult to track down. They may have been sold off so long ago that the seller doesn’t realize another entity had rights to their land. If this is uncommon in your area, you may choose not to worry about this, but if the cost of a piece of land is suspiciously low or you know of other properties in the area that have been logged or mined out from under the owners, here are tips:

  • The easiest thing to do is to look on the deed for the term “fee simple,” meaning the land is being sold as one parcel from core to heavens.
  • Ask everyone who will listen if the land has easements: the seller of course, the Tax Assessor’s office, the title company who does your title search for the closing, etc.
  • With patience and an eye for bad handwriting, you can try your own chain-of-ownership search through decades or centuries of titles at your local Register of Deeds – or find a title professional friend who will play Sherlock for you.
  • Invest in the title insurance at closing. It’s cheap but will pay off anyone who comes out of the woodwork years later and says they have rights to your land that your closing’s title search didn’t reveal. Be aware that title insurance usually won’t cover extras like mineral rights, so it’s still worth doing the extra research if you live in an area where mineral rights are often severed from surface rights.

Environmental and Geological Considerations
A quick check with the Tax Assessor or a website like this one should confirm whether a parcel sits in a floodplain and let you adjust your decision or offer accordingly.

Even if there’s no flood threat, look for clues about drainage issues from creeks, like sinkholes, which can be expensive in the future. Here’s how we know.

That link describes the story of an unexpected sinkhole that tried to eat our driveway 2 years after we bought the land.

men standing on edge of sinkhole

We were alert to the fact that sinkholes are common in our region, so we did gamble one large expense to confirm the solidity of our chosen homesite. The driveway was one thing, but the homesite was totally another.

There was one spot on the acreage we knew we wanted to build on. It has the best buffer, sits on the side of a peaceful field, and has an unobstructed view of the Great Smoky Mountains National Park. If that site were un-buildable, the land wouldn’t have been as attractive to us. We made an offer before testing the site for sinkholes, but it was contingent on whether that site was buildable. This means that, if whatever diagnostics we paid for identified a sinkhole or other issue, we could withdraw our offer and get our earnest money back.

Geotechnical drilling for soil engineer

The diagnostic we chose was pricey: $3,500 for geotechnical drilling and analysis by a soil scientist. Realtors, along with the geotechnical drilling guys, looked at us like cuckoo birds, but we were determined to be certain. Plus, the resulting detailed, 15-page geotechnical report will tell our builders how much concrete is needed for our foundation and how deeply to dig, which may result in savings there and when we insure the home.

Even if it doesn’t, since Chris and I are so invested in living in a safe, sound home, the knowledge of how to do the foundation right was worth it to our souls.

We also had a geologist named Barry from the State Department of Environment & Conservation come out (for free) to inspect the sinkholes around the property and give his opinion on whether they might open up more or if litter disposed there decades ago is an environmental concern.

A free consult like that won’t usually result in official approvals but can help guide your offer and other decisions. Along with giving us a strong thumbs up on the perc status of the land, which was reassuring, Barry gave us confidence we weren’t up against environmental hazards or urgent costs for litter removal. He provided a number for the state’s sinkhole expert in Nashville, who spoke with me for 30 minutes about sinkholes in Tennessee, and that was fascinating. Barry also provided fun topographical maps and information about the ground underneath us.

Other environmental concerns can include plantlife. We had one obvious problem area; see below. This kudzu was surprisingly easy to get rid of, by the way. It would come back if we let it, but weekly mowing is enough to keep this…

KudzuField-10-01-16

…looking like this:

red metal polebarn home on a field

A forester can help you identify invasive plants that may be less obvious than kudzu but will need management over time.

A farmer or permaculture expert can tell you where what might grow. A stream conservationist can give insight on groundwater issues. How deeply you journey into the discovery process depends on how important these aspects of the land are to you.

One last tip: become friends with the friendly folks in your Tax Assessor’s office! In rural areas especially, they can be part of that local body of knowledge who provide ongoing, important insights about your property. They are true land experts. Speaking of which…

Taxes
Your Realtor and the local Tax Assessor should be able to share what kind of taxes your land will have, if you’re worried about it. Is the land within annexed area, or will you be exempt from city taxes? What taxes will there be for any structures you inherit, including that shell of a rickety shed? Do you qualify for tax breaks based on the size or location of your land?

Tennessee has the Greenbelt, a tax break for owners of 15+ acres with certain features. Pay a local forester to walk your acreage and write a report that says you qualify, then submit that to your assessor’s office.

talking with the forester

Forester Freddie, who works our area, loves trees. He’s generous with his time and gave us all kinds of tips for caring for our natives long term.

Taxes are taxes, but research may help you find some breaks.

Tools and Supplies
Remember that different topographies may require different tools to maintain. Any significant acreage will have you wanting a truck, heavy-duty chainsaw(s), barn, tractor, tiller, gravel, fencing, shed, grass seed, and on and on. And on and on.

1977 f150 with Club Car golf cart in bed

That won’t change your offer, but if you’re eyeing a piece of land at the top end of what you think is your budget, be careful. It’s a safe bet that unexpected costs will begin the moment you sign closing documents.

In Conclusion
In our case, 2 weeks of research, estimates, and speaking with local experts let us better understand our land’s value and our budget, which helped us make an offer that was luckily reasonable to all parties. We added specific contingencies that provided adequate time to research the land as the loan processed. The hard work let us come to the closing table with a feeling of confidence that this first major step off the cliff was the right one.

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