Buying vacant land with cash step by steps

4 Replies

Hi All,

I am interested to buy a piece of vacant land in California (to use for my retirement years) which is priced between 5K and 10K, and I am planning to buy with all cash. The lot I wanted to buy is zoned for residential single family residence. I am an absolute beginner in buying vacant land and would like to get some suggestions. Due to my first time experience, there are many thoughts going through in my mind, and wanted to think out loud to get help!

1. Should I have a real estate agent to submit an offer? For house buying, it is a required step since, they can only write up an offer for a property. Is it the same for vacant land as well? If a buyer does not need a real estate agent, can he/she directly negotiate with seller for the purchase agreement terms?

2. I have learned that I should "at least" get a title search done. Should I do it before the offer is made or after the offer is accepted?

3. For the price between $5K~$10K property, should I buy a title insurance? I know you would say it depends on my risk appetite, but I would like to know what you would have done in my shoes?

4. Should I get land surveyed? If so, is it one of the contingencies of the purchase agreement? How do I go about getting the land survey done? 

5. If it were a house that I am buying, the closing cost could be significant, due to a lot of things getting added up in the process. How about closing costs for vacant land? Are there anything like "who pays what"?

6. What are the steps that I need to go through in the closing?

I would appreciate a bunch if you could throw some tips and answers for my concerns! Right now, I know nothing, but I know I wanted that vacant land. Thanks in advance!

Hey Kevin:

Not legal advice here...... by the way.

Not sure how to answer all of your questions but I think if this is your first time through the process it may be good to think about using an agent.

I put in an offer on some land that we have under contract and it took a long time and I accidentally left some stuff out in writing up the offer myself.

It wasn't a deal breaker and you can do it, though.

Just get a regular 'purchase agreement' that's in line with your state requirements.

What tripped me up was not having as much detail on who had responsibility for paying property taxes based on when the property closed.

Same thing on your #5 question, make sure closing costs are spelled out in exquisite detail would be my recommendation.  Grab an old settlement statement and use the same words and communicate something simple but that covers your bases... IE if you offer a buyer credit for closing costs make sure its clear that is comprehensive or any other specific line items you would pay for.

On #6, get a closing attorney.  There's really no good way in my opinion to handle the trust side of the closing without an attorney and they'll help you get through that.

On #2 there's ways you can do your own title research but I wouldn't want to rely on that especially if you plan to build on the land or sell it, ever.

#3 depends on what you're looking to do with the land and how much 5-10k is to you.

#4 depends on if there are important items close to boundaries, etc.  Or access questions, etc.  If not, no, you can wait on that IMO.


Remember, once you buy it you own all the issues.  I would evaluate if there is any possibility of any environmental issues.  Was there any prior use or prior structures that could have caused pollution to the property. 

Regarding Liability Insurance, check with your homeowners carrier. If the land is not developed at all (ie. no roads, utilities, etc..) it may be covered under your policy or you may be able to add it cheaply. If the land is in a differenct name (LLC, corp., etc.) you should check to make sure that does not affect it.

it depends on where this land is.

are you talking about CA high desert lots  or lots down in Lehigh acres Florida.. those are about the only lots I know that sell that cheap other than inner city mid west northeast were land has zero value because you can buy homes for less than replacement costs.

If its lot and block  you will have a definitive legal description.. if its in the boonies it will cost more to survey it than what your paying.

the big issue is size  most likely at 5 to 10 it has zero public utls maybe power.. is it big enough to put a well and septic on.. if its got a public water system will it perc..

title company will handle the pro rates that simple.. and title insurance is always wise.

but really need more info to make an intellegant response.


1. location

2. size

3. served by any public utls  water, sewer , power

4. topography

those are your basics

@Kevin Lin   Based on the price, I’m assuming the land is not in a sub-division with covenants and building restrictions already in place that will protect you now and in the future. That being said, the seller still has the duty to disclose to you if the subject property is located in earthquake zones, potential flood areas, or fire hazard areas, but that’s assuming they know. The way around that for the seller is making the contract state "as is" leaving you the responsibility to determine the land's fitness for a particular use. Just because it's zoned for residential doesn't mean you automatically have the authorization to put a house there. One of the biggest problems you may face is waste water. If you don't have public sewer access, then you must rely upon onsite disposal and that can be limited by the soil types on your land, the size of your parcel, onsite well for water, conservation area requirements, set-backs, and the county health department or State environmental department granting a permit for onsite septic. If you do have access to public sewer, then you still have to get a permit from the utility and pay a tap fee which could be expensive.

Another consideration is the path of progress and its impact on the surrounding land. You’re waiting until retirement, not knowing when that it is, the path of progress could bring positive or negative effects to your land in the coming years. For example, consider logging that could change the landscape drastically, or surrounding area rezoned from residential to light industrial or other use.  Some changes could make the land more valuable and you simply sell it, or the changes may disrupt your retirement plans.

Considering the small price tag, you probably don’t need a realtor, the seller isn’t likely inclined to pay realtor commission, and it’s probably not worth a realtor’s trouble. Land in my area represented by a realtor often has a 10% commission. For a 5-10k price, there’s probably not many realtors willing to put in the time to make so little. The title search and insurance should be done and clean title be contingent for closing. Again, the price tag is small, but relieve yourself of headaches down the road. As for a survey, you will easily spend $1000 if not more, especially if the land is out in BFE , heavily wooded, or has other difficult features. The metes and bounds should be on the existing deed registered with the county. Depending on the size of the parcel, you may be able to go there and find the corner markers simply by using the deed description, a metal detector, and estimate the distances with your steps. As for closing costs, you’ll likely be paying for it. For the closing, you can get an attorney to draft a purchase agreement, and take care of the whole process. In the end, you’re likely to be paying several thousand dollars in addition to the purchase price.  Good luck!