20 QUESTIONS (AT LEAST) YOU SHOULD ANSWER BEFORE BUYING (OR SELLING) RURAL LAND NEAR HOUSTON

Land comes in a lot of different types, locations, uses, sizes and improvements. Buying your own piece of rural Texas is usually quite a bit more complicated than buying a home. The following questions represent a minimum level of due diligence. If you are the buyer, hopefully you will engage a knowledgeable buyers representative to help you complete the checklist. If you are the seller, you will be getting requests for many of these items.

1. Address. This sounds obvious but some vacant land doesn’t have one. If the property you are interested in doesn’t have an address check with the county about getting one. They might ask you some questions about the improvements you plan to build.

2. Ownership. This might be more complicated than you think. Start with the last deed. Another place to check is the County Appraisal District. This will tell you who pays the ad valorem taxes and where the bill is sent. Who are the people behind the trust or LLC that own the property?

3. Legal Description. The legal description will be required for the earnest money contract. I like to add the county appraisal district (CAD) parcel ID to the legal description as well. This is another reason to get a copy of the most recent deed.

4. Most recent copy of the deed to the property. Covers all of the above plus more. Possible description of liens, leases, easements and all owners.

5. Survey. Eventually, if you are going to purchase a property, you will need a survey of it. If you are going to finance the purchase, the lender will require a survey. Ask the owner if they have one. If there is no survey, the party responsible for the cost is negotiable. Ask the surveyor to include any easements affecting the property.

6. Access. Many properties do not have legal access. If the property doesn’t have access, you probably want to cross it off your list. The best access is frontage with a driveway from a public road. It might be important to you if the road is asphalt paved or all weather (good base but no pavement). The next level of access would be via a driveway from a private road. Many subdivisions are developed with private roads. Find a document indicating the property has legal access. Finally, if the property does not have frontage on a road, obtain a copy of the easement or fee strip document providing accessibility.

7. Location. Gather as many locational aids as you can. Your buyers representative can help with this. Examples would be plats, photographs, aerials, road maps showing property location, school district boundaries, GIS maps showing property boundaries, floodplain maps, wetland maps, etc. The CAD website is a good place to start. Other websites include the Google Earth App and mapright.com. Drive the neighborhood. The various land listing websites are just the beginning.

8. Stage of Development. Any particular tract you may be interested in will range from raw acreage to a highly developed residential site. Site improvements, or the lack thereof, is the difference of properties along the continuum. Site improvements include utilities such as electricity, water, septic, natural gas or propane gas, phone and internet service. Some tracts will have driveways, roads, ponds and fencing in place while others will not. Very generally speaking, raw acreage will be located further from a city or town while a highly developed residential site will be closer to a community and often situated within a rural subdivision. Typically raw acreage will be a larger property priced lower per acre while a more developed site will be smaller and the per acre price will be much higher. Before buying raw acreage, budget how much it will cost to install all necessary site improvements by contacting contractors in the area.

9. Site Improvements. Installing site improvements will usually involve engaging contractors such as land clearers (ponds, driveways, roads, culverts, and clearing brush), water well drillers, septic installation and fence builders. Check with the county for any regulations associated with these improvements. Driveway and culvert requirements may be regulated by the county or state and require a permit. For purposes of this post, buildings such as homes, barns and sheds will not be addressed.

10. Electricity. The availability of electricity is paramount. Make a visual inspection for poles situated either on the tract or in the road right of way in front of the tract. If they are not immediately available to the tract, contact the power provider and verify that power can be extended to the property. If power must be extended from another owners’ property, an easement across their property will need to be obtained. They are not obligated to provide service to you.

11.Water. Water is usually provided by one of three ways; a local city or other governmental authority, a rural community water system or a water well situated on the property. If water is provided by a public entity, contact them regarding availability to the property. If there is an existing water well talk to the owner about the capacity (gallons per minute), purity of water, depth of well, type and age of pump and whether or not it is cased. If there is not a well on the property, a drilling contractor will need to provide a bid.

12. Septic. There may or not be a septic system on the property. If there is no house, probably not. If there is one on site an inspector can determine if it meets county requirements. If not, a septic installer must be hired to get plans approved by the county and install it.

13. Other Utilities. You will want to check on services such as phone, internet, natural gas or propane gas. To be sure these utilities are available, call the local provider.

14. Easements. Easements are quite common and affect land in different ways. You certainly want to know about any easement situated on a property you might be interested in. They are almost always recorded in the County Clerks office and can be abstracted. The title commitment generated at a closing will give notice of any easements. You probably want to know about them earlier than closing. A physical inspection of the property will reveal most major easements such as pipelines and power lines. A survey may show the locations of easements.

15. Leases. Agriculture and timber properties often have leases. Some leases are recorded in the County Clerks office but not always. Ask the owner about any leases that are current. Consider whether you will be able to receive lease income if you buy the property.

16. Ad Valorem Taxes. This information is available on the County Appraisal District website. Tax amounts and rates are published as well as whether there are any agriculture, timber or wildlife exemptions. The various taxing authorities are also listed to include school district. The assessed value for land and buildings is included. Often the most recent deed is referenced.

17. Restrictions. Even properties outside of a city can have restrictions often from the county. Local ordinances may include setback requirements, zoning, driveway permits, ground water conservation districts, floodplains (FEMA maps), wetlands, and environmental guidelines. If a property is situated within a rural subdivision, there are probably a number of restrictions.

18. Minerals. An abstract showing status of mineral ownership can be obtained by hiring an abstractor or landman. This is probably not necessary unless the property is large. Generally speaking, there are two rights associated with mineral ownership, royalties (income) and surface control in case of drilling. It is very common in Texas for the mineral rights to be separate from the ownership of the land.

19. Annual Operating Costs. Estimate how much it will cost to own the property you are considering. Try to get a good idea of the monthly cost of each utility, property insurance (liability), ad valorem taxes, upkeep of fences, mowing, pond maintenance, and so forth. These items are in addition to mortgage payments.

20. Comparable Sales. Ask your buyer representative to research some actual sales of properties similar to the one you are interested in. I don’t think a brokers opinion is necessary at this point. Keep in mind that prices paid for land vary widely on a per acre basis. Compare the sale property carefully to the property you are considering and make adjustments for differences. Each individual property is unique.

SUMMARY. The above items absolutely need answering in order to avoid costly mistakes. Other questions will arise. The due diligence may seem daunting at first but your buyer representative can save you a tremendous amount of time. The above discussion applies to the properties you have selected as serious candidates not every property that is for sale. Driving the neighborhood will provide much needed perspective. Take a road trip with the family. Get to know Houston’s backyard.

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Allen Realty Advisors represents buyers and sellers of fine quality rural land near Houston. We specialize in weekend retreats, country estates, farms and ranches, recreational property and investment land. Our market area is generally within 100 miles (two hours) of Houston.