How To Purchase Land For A Homestead Or Farm

This is how I purchased my land, you’re welcome to try it. This method assumes that the buyer wants to build their own cabin on their property.

  • Navigate to zillow.com
  • Type in your location.
  • Remove the boundary and zoom out.
  • Next select the ‘More’ button. Scroll down to ‘Lot Size’ and select ‘5 acres’.
  • Then select the ‘Any’ button and change the ‘Price Up To’ to 100,000 (your gonna need to type it).
  • Sort by ‘Lot Size’.

Start searching for plots of land that meet the following criteria:

Needs:

  • Large amount of trees(enough to build a house/cabin with)
  • Be at least 5 acres(but no more than 150, sweet spot around 20)

Wants (not required but help a ton) in order of amount of benefit provided:

  1. Running water
  2. Pond or lake
  3. Not on a mountain
  4. Cheaper price
  5. An actual livable house(in which case trees are not needed)
  6. Busted or abandoned house

Some examples from the search above in order of amount of difficulty(easiest to hardest):

Financing

Since the majority of these properties are lot/land, you cannot finance it like you would when buying a house. Most banks wont finance, but there is most likely a farmer focused bank or lender that will finance lot/land if the land is larger than 5 acres(this another reason why its gotta be bigger than 5 acres). Buyer must provide anywhere from 25%-35% down-payment dependent on state, my state required 30% and a credit score of at least 700.

I attempted to go the bank route and was denied because of my mediocre credit score(college loan bs). I asked the realtor if there were any other options for purchasing the land, and the realtor suggested ‘seller financing’. Seller financing means the seller will take out the loan from the bank, and the buyer(you) will pay the ‘mortgage’. The enticing thing about ‘seller financing’ is that the buyer can negotiate any payment plan they want, meaning instead of being forced into a 15-30 year mortgage(with interest) by taking out a loan with the bank you can set up a payment plan to pay off the land as fast as you are able to, in my case this was 3 years. It also means you are not indebted to the bank, the seller is. This is significant because it means a bank cannot leverage you into using expensive contractors, expensive surveyors, requiring expensive insurance, and/or requiring tedious surveys. The drawback of ‘seller financing’ is that you need to make it worth the sellers time, in other words you can’t drastically negotiate the asking price. Normally this is not an issue, offer asking price or slightly below the asking price, with seller financing and a payment plan that you can handle. Going thru a bank may mean that you can offer much less than the asking price but it also means you’ll be locked into a 15-30 year mortgage with interest which will eventually end up costing you far more than if you just offered the asking price but with seller financing and a payment plan.

Land With A House vs Land Without A House

Assuming you are planning to build your own cabin/shelter, you’ll need to learn how to use a chainsaw. Felling trees is only difficult when the surrounding power lines and houses need to be accounted for. Fortunately this is not an issue on a large piece of land. This makes felling trees with a chainsaw much easier for an amateur or beginner. Using a chainsaw is exhilarating, if you like getting your hands dirty, you’ll love using a chainsaw.

If you are not planning on building your own cabin/shelter and wish to purchase land with an actual livable structure on it, then the prices will drastically increase. For an example if the ‘easiest’ property above had an actual house on it, instead of 84,500$ the price would most likely be anywhere from 400,000$ to 1,000,000$ depending on the size of the house. Land is incredibly cheap without an actual house on it, but with a home on it, you need some serious dough.

If you are a carpenter, a mason, construction worker, handyman or just want to learn something new I highly recommend buying land with hundreds to thousands of trees on it, and building the house yourself. You’ll save hundreds of thousands than if it has a house on it. You’ll also learn countless new skills like felling a tree with a chainsaw or ax, basic carpentry, dowsing for water, digging a well, chopping firewood, growing food, raising farm animals, hunting, trapping, etc. Another great thing about building your own cabin/shelter is you don’t have to follow any building codes because you are not indebted to a bank mortgage which requires home insurance which requires the home to follow expensive and arbitrary building codes. Why buy home insurance if you built the house yourself and are surrounded by thousands of trees that can be used as lumber. If something happens to your house, build another one…

3 Comments

  1. Waiting for a post to reveal what your cabin will look like.

    Like

  2. Paul McPherson

    Oh, they offer plots, too, and not only built houses? I thought they only offered already built options, while the only site I had seen that had an extensive unbuilt plot section was tranio.com . But yeah, it’s often more interesting to look for land than for a house if you want to live in the countryside, and then to build something there!

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  3. […] require less space than a small garden but will still provide you with eggs and meat for a decade. Here are some helpful tips for buying land that I’ve posted about […]

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