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Buying Land

Title Insurance

Okay, so you are about to buy land and are excited about the future! Land can provide financial security, shelter, recreational opportunities, peace of mind and a host of other possibilities! But before you make your move consider a simple, inexpensive way to protect that investment… Title Insurance. Title insurance is the single most effective tool to defend your rights to the land you own. 

Before you purchase your land you will have an attorney research the “Title”. The title is the legal record of the property’s history of ownership, rights, and easements. Title insurance protects you against any defects in the title that may have occurred in the property’s history. These defects can include, but are not limited to the following:

 

Fraud and/or Forged Documents

Easement issues

Clerical errors

Undiscovered mortgages

Legal claims by spouses or children of previous owners

 

You can purchase title insurance at the closing. Have the closing agent review the policy with you at that time and discuss any exceptions to the coverage. It is a one time fee with no monthly premiums. As of this writing, title insurance runs about $3 per thousand dollars of the purchase price with a minimum of $100. 

Buying land is a big investment. Protecting your investment with title insurance is a smart decision.

Owner Financing Maine Land

Buying Maine Land with Owner Financing

As a buyer of Maine land, you might want to consider owner (seller) financing your purchase. With owner financing, a bank isn’t involved in the sale. Instead, the buyer and seller make the arrangements themselves by drawing up a mortgage and promissory note setting out the interest rate, schedule of payments, and the consequences should the buyer default their obligations. With only two players involved, the advantages of owner financing can be a quicker and less expensive transaction. When the seller finances the sale the deal closes faster, as there is no waiting for the bank loan officer, underwriter and legal department to approve the sale.

Closing costs are typically much lower for a seller-financed sale. Without a bank participating, the buyer can avoid the cost of application fees, points, appraisals and a host of other charges that lenders routinely charge during the financing process. You can literally save thousands.

Owner financing usually runs for a fairly short term with a balloon payment coming due at the end of the period. Monthly payments can be tailored to fit the needs of both buyer and seller. The theory­­­­ is that the buyer will eventually refinance that payment or have the cash at a future date to pay off the loan. One to seven years is a typical range that a seller may be willing to owner finance your property. 

Many banks offer great financing on homes but are not comfortable financing land. Thus, they frequently demand large down payments and high-interest rates. Some banks do not even offer land loans. Many buyers may have the down payment required but lack the ability to obtain bank financing for other reasons. Employment history, recent job changes, etc… can influence a banks willingness to work with a buyer. In a sale involving owner financing, the seller may be willing to take on risks that a bank would not consider. This doesn’t mean that people with poor credit can jump right into an owner financed transaction. The seller will most likely want to review your credit as well and will want to feel assured that you will repay the loan as promised.

In summary, the benefits and rewards of an owner financed transaction are worthy of your consideration. For some, owner financing is the only way they can start to realize their dream of land ownership. For others, it is a great way to transition into a purchase with ease and low up-front costs. As with all real estate transactions, we encourage you to seek professional advice from a real estate attorney and/or an accountant to help you evaluate your options and execute the transaction properly.

Click to view Maine properties for sale with owner financing!

Rick's Real Estate 101: Covenants – What are they?

Covenants (often referred to as “restrictions”) are privately placed rules that act as a guide to future use and development of land. They are incorporated into the property deed or recorded as a separate document at the registry of deeds. One primary motivation for establishing covenants is to maintain or enhance the economic value of a property. Two terms you may come across are “burdened” and “benefited” land. Burdened land is the land that the covenant applies to, while benefited land is land that benefits from the restrictions placed on the former. In the case where the same covenants apply to a group of properties, then that property would be both “burdened” and “benefited”.

 

 

Property without covenantsAre Covenants Good or Bad?

If you want to have complete freedom with your land in Maine and do not care what others around you do, then covenants may not be for you. If you hope that surrounding properties are developed in a fashion that is compatible with, or not averse to, enjoyment of your property, then covenants might be good. But the real answer is this: If covenants coincide with YOUR intended use or vision, then covenants might work for you. Remember, the covenants you have on your property may be the same for those surrounding you. This should serve to protect the value of your land.

 

 

Keep an Open Mind

At Swift River Properties we sell land with and without covenants. We encourage you to keep an open mind about them. Like most things in life, we feel it is good to consider multiple options in order to make the best decision possible. Ask questions and apply what you learn to your unique situation. It's your future. Make the best of it!  

What To Consider When Buying Land in Maine

 

Where to buy property in MainePurchasing land is one of the most special and unique investments you will make in life. You can clear the trees, install a driveway and build your dream home, but the features of the land such as topography, watercourses, and exposure, are fixed. Land is immobile and indestructible; you can’t move it or tear it down to build a new piece. This is why you must start by asking yourself “what is most important to me when buying land?

 

Location

Whether you’re searching for land to build your primary residence, second home or hunting camp, location is one of the most important factors to consider. How far would you like to be from shopping, family, grocery stores, or your work? If you’re looking for a place to call home, these factors may be some of the most imperative to consider. However, if you’re looking for a seasonal home, maybe distance from your favorite lake, state park, hiking trail, golf course or snowmobile trail are important factors to consider. After all, Maine is Vacationland and being a little further away from life’s conveniences can be a breath of fresh air.

 

Features

Maine is known for its vast number of lakes and ponds, miles of coastal shoreline, babbling spring-fed streams, remnants of rich farmland and glacial scarred landscapes. Before you start your search in earnest, identify one or two features you just can’t live without! Do you want to wake up to mountain or water views? Do you want to be on a lake, pond or river? Is deeded water access versus ownership the right choice for you? Create a list of what your ideal land features are and establish a budget.

 

          Factors in buying land in Maine Maine Waterfront Property

 

 

 

 

 

 

 

 

Other Factors                                                          

Other than location and features, consider factors such as the presence of utilities, solar exposure, road access, taxes, financing, etc… Do you need to be on the grid or are you looking for a property with solar exposure? Do you need to be on a town maintained road? Is financing available? What is your budget for taxes and mortgage payments? These can be difficult decisions to make upfront but can save you time in the long run.