Four FAQs First Time Land Buyers Ask Realtors

Real estate transactions are important and can be complex if not handled expertly and professionally. 

As a first time buyer, it is therefore pertinent to ask the right questions and conduct your research before venturing into it.

There is a saying that ” whoever asks the right questions, does not miss his way”. So, in this article, we will be answering Four FAQs that first time land buyers ask their realtors.

Question 1: 

What should I consider when choosing the location of the land?

Answer: 

First things first, your intentions for the land should guide you. 

What is your reason for purchasing the land? 

Do you want to buy and build immediately or to boost your property portfolio? whether for short or long term? 

If you want to buy and build, what are you building?

Commercial property? Residential? Or even for agricultural uses? 

These are the questions you should answer before you determine the location of the land. 

Another consideration is Land Use. 

Land use is the categorization of land based on what can be built on it and what the land can be used for.

There are many different categories of land use. The most common uses are residential, commercial, agricultural, recreational, and transport. Generally, there are a few fundamental pointers on how to determine the location of your ideal property. 

You should consider the;

Terrain

Topography. 

Availability of access roads. 

The level of development in the area where the land is situated.

Question 2: 

What do you mean when you say “encumbrances” and is it important to sort this out before purchase? 

Answer: 

Encumbrance in real estate refers to any claims, liens, mortgages, or other legal restrictions that affect the title or use of a property. These encumbrances represent outstanding debts or obligations on the property and can restrict the owner’s use or transfer of the property until they are paid off or resolved. 

Examples of encumbrances include a mortgage, a tax lien, an easement, or a restrictive covenant. A mortgage or when the land has been used as a collateral for loan, is a common type of encumbrance that allows a lender to place a claim on the property. This ensures that if the borrower defaults on the loan, the lender has a claim to the property to recover their investment. 

When buying a property, it is essential to ask your vendor for any encumbrances on the land. Any liens or encumbrances must be sorted and cleared before the property can be sold or transferred to a new owner. Some encumbrances can affect the value of the property or limit the potential use of the property, so, sort them out before closing on the sale.

Question 3: 

Is it necessary to get a survey plan as one of the documents you will receive when you buy a land?

Answer: 

Yes, it is essential to get a survey plan from a registered surveyor to ensure that the land is not encumbered and that it matches the description provided by the vendor. This helps to avoid issues like boundary disputes and land grabbing.

Every real estate agent worth their salt knows that this document is one of the most important documents you will need as the buyer and should not wait to be reminded to get it prepared. 

Question 4: 

What documents will I receive from my vendor after purchase of land?

Answer: 

For the purpose of simplicity, there are at least the four fundamental documents you should look out for after purchasing a property. At Velox Real Estate Limited, we ensure that these documents are made available for you after purchase of any property from us.

1. Payment Receipt: You are given a payment receipt after making payments for the land, to prove that you – the buyer has made a payment and to confirm the terms of the sale.

A payment receipt is a legally binding document that serves as proof of payment made by the buyer to the seller for the transfer of ownership of the land. This document includes information such as the details of the transaction, such as the amount paid, date of payment, payment method, and other relevant details.  

2. Deed of Conveyance:

After completing the payment for the land, a deed of assignment or conveyance is signed by the parties involved.

This Deed of Conveyance is a legal document used to transfer the ownership of the property from one person or entity to another. 

It is an essential part of the process as it serves as proof of transfer ownership rights from the seller to the buyer. The deed shows the necessary details of the property, such as boundaries, acreage, and any physical structures present on it. The document also states the circumstances under which the transfer of ownership is made, the price of the property, and any additional terms agreed upon by the parties involved. It is typically signed by both parties, witnessed by two people, and notarized to make it legally binding and enforceable.

3. Survey plan:

A survey plan is a vital component of any real estate documentation. 

It is a detailed drawing that accurately depicts the boundaries, measurements, and physical features of a piece of land. 

Having a survey plan is essential for several reasons. Firstly, it helps to avoid boundary disputes with neighboring properties. 

By clearly defining the property boundaries, it identifies any encroachments or unauthorized structures on the property. 

This information is crucial when purchasing real estate, as it allows you to assess the property’s condition and ensure that no legal issues arise after the purchase. 

4. Contract of sale:

A contract of sale in real estate is a legal document that outlines the details and conditions of the sale between the buyer and the seller of a property. 

This document sets forth the terms of the agreement, including the purchase price, payment terms/plan, details of any deposit made, any contingencies or conditions of the sale, inspection period, and other relevant details. 

It is typically drawn up by the seller, but both parties are expected to review it carefully and negotiate any details or conditions that need to be changed before it is signed. Because, once both parties agree to the terms, they sign and date the contract to make it legally binding. 

Remember the saying that he who asks questions never misses his way?

So ask, ask again and again.

Good luck.