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Real Estate: Financial Considerations $$$Dan Auito Raw land as opposed to improved property is much more difficult to finance through traditional lenders. The main reasons are that it generates very little income, development costs can be expensive, there are no buildings or improvements that can be used as collateral, and it is often considered speculative. For those reasons mentioned we find that sellers are often our first choice regarding financing. It is typical for a seller of raw land to accept 10 percent down and the rest to be paid over time at a specified below market interest rate. This would be an example of an installment land contract. Other forms are contract for deed, mortgage and note and purchase money mortgages. In these cases, a real estate attorney usually drafts these contracts and a bank will act as an escrow agent to facilitate verifiable records of payments received. The seller often retains the deed until the property is paid for in full. If you want to investigate bank financing, then you may start out by offering 30 percent down with a seven-year mortgage, with the bank getting an extra percentage point over and above the current interest rates for standard loans. This may not be accepted, but it does give you a starting point to see just what they may be willing to do. If you plan on building on your land, then having a development plan with an appraised set of blue prints for the project will help the lender in justifying your loan. If you can use equity from other property, then paying substantial down payments may also be an option. Final words of caution here are to know values and don’t overpay. Always offer less when possible and research recent sales of comparable properties. The larger a parcel is, the cheaper it tends to get per acre. Ask an agent what an acre of land tends to go for in the area that you are considering; try to buy more than one acre. When buying residential lots, builders try to keep raw land costs down to 10 percent of the overall value of the project. If streets and utilities are already in place, then they will use 25 percent as their guideline. If you can combine or assemble parcels or achieve zoning changes with property, you have a good chance of immediately increasing its value. Always physically inspect the property and do your research before obligating yourself to buy it. And try using contracts with contingencies put in to protect yourself. In essence, these are really options that let you control the deal while you investigate and research the land’s potential to satisfy your objectives. Happy Hunting and buy the high grounds!
| RELATED ARTICLES Which Lamp should I choose With all the lighting choices out there, you may want to reconsider just purchasing a lamp for your lighting needs. Whether you are looking for interior lighting or outdoor lighting, you can find many options pretty easily. Lighting fixtures have become more then just a means for gaining light. They are stylish and fun. They can be useful, but also are decorations for your home. There are many types to choose from as well. Things to Consider when buying a Hot Tub or Jacuzzi Tub We recently purchased a new Hot Tub and Gazebo from Cal Spas in Minnesota.The purchase was not something we planned, just something that caught our eye when visiting the Minnesota State Fair.As a result we learned a few things that would have made our purchase smarter.In the end were pleased with the decision but its easy to say now that all the work is done.In this article Ill outline the information I wish I had considered when making this purchase.I hope it helps you in your decision. 10 Ways To Protect Against Mail Theft 1. Never put outbound mail into an unsecured mailbox, especially if it contains checks or sensitive personal information. Instead, take it to a U.S. Post Office branch or place it in a U.S.P.S. mail collection box. Bathrooms That Make You Go Ahhh New luxury and convenience items provide for the perfect home retreat Thinking of Remodeling Your Kitchen If you like to cook, or even if you just do it from necessity, having a homely, organized, and modern kitchen is probably important to you. Although, the traditionally kitchens are still out there, there are so many new, modern elements that can add luxury and class and convenience to any home. Kitchens have changed with the way humans have changed in the last few years. We have become more demanding of our time and having less of it to spend cooking. Many of us are on the move, always busy, looking for time saving methods. Then, there are those of us who are more interested in having a stylish kitchen, rather then workable. Others, prefer the look and feel of a country kitchen. With so many options out there and so much to consider, it is easy to become frustrated. Stitching Memories Sometimes, usual photographs look so common and boring. Converting your pictures into charcoal or oil painting is a welcome change but then, a lot of people have been into these crafts already that there are times when these portraits too, look clichéd. There could also be a time that a charcoal or oil painting of your photo does not look exactly the same as your original photograph. I have been a witness to several charcoal portraiture failure. Have you ever had your portrait done in charcoal in which the result didn’t actually look like your image Maximizing Space on a Minimized Budget Do you often have friends, family, or guests over for the weekends and are in desperate need of a spare bedroomAre you going nuts trying to figure out how to turn that extra bedroom that’s never used into an office, yet still wondering how to board guests over the weekendOr maybe you are running out of storage space and closets are now turning into no-mans-land The path of United States HDTV world The path of United States HDTV world: A brief on United States HDTV Prepare for Winter Before It Arrives Even though we are still enjoying warm weather and winter seems far away, now is a great time to begin preparing. If you do a bit at a time before winter hits the tasks are not at all overwhelming. Alarm Systems: Not Just For The Wealthy Anymore! Over the last 22 years that I have been involved in the security alarm industry, I have seen quite an evolution. Changes have not only taken place in what type of equipment is available, but also in how the consumer buys and use’s the equipment. Beautiful, Elegant Bathtubs that Spruce Up any Bathroom Bathtubs have become an important necessity of our daily life for many reasons. Who hasn’t enjoyed the comfort of soaking in a nice, hot tub at the end of a particularly hard day. They give washrooms a bathrooms a complete look; after all without them they look vacant. Bathtubs come in different sizes, color, shapes and material. How To Conduct A Home Inventory How To Conduct A Home Inventory Building Liner Ponds Surprisingly enough, it is usually in mid-summer that many gardeners begin to think about installing a small pond or water garden. Ponds dont need to be weeded or watered, and they can supply exuberant color in the form of water lilies and bog plants. Getting Your Local Channel I truly believe for most of us, getting the local programming is as important as getting those ‘big’ TV network for our home entertainment system. When it comes to television networks, local programming is an important issue to be considered. Of course you want those national channels for your primetime TV shows, but local programming is what keeps you stay connected with community in your area. Closing Up Your Container Garden All good things eventually come to an end and so summer is waning, even as autumn gives most of us a fresh start. Ill bet your summer container plantings arent really benefiting, though, from the "back to school-oh I love a clean notebook" boost and arent dying as gracefully as summer itself is. Youre going to have to help them through this! How to Sell Your House For Full Price How to Sell Your House For Full Price Without a Broker Change The Style Of Your Interior With A Minimum Of Costs The style of your interior depends for a great part on the decoration on the walls.Using the right picture on the right place can make your room look bigger.I experienced this for myself when I came in this business. I do sell reproduction paintings, you know. Maximizing Your Living Space Look to contemporary modern décor to maximize space. TORLYS Uniclic® Cork flooring, with its sensuous texture, can warm up a modern interior, preventing it from looking stark. Wildlife in Winter Ponds This may seem contradictory, but you want to leave a little bit of debris in the pond when preparing it for winter. Is A Good Bargain Worth Paying For Most of us love a bargain. But is it the joy of the chase or the joy of the purchase that really motivates us Is a bargain hunt without all the trappings of hard work, negotiation, bluff and counter bluff any fun at all |
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