Purchasing Land in California | Do's and Dont's

Dated: June 3 2023

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Buying land in California can be an exciting and rewarding adventure with tons of possibilities. With its breathtaking scenery and endless recreational activities, there is something for everyone to explore here. From hot-air balloon rides above Temecula Valley to skiing in Big Bear or Lake Arrowhead, the Inland Empire provides a unique escape from the hustle and bustle of the surrounding L.A and O.C life.

At the same time, buying raw land involves a lot of consideration to make sure you’re making the right decision for your future.

When considering purchasing land, it is important to weigh the various benefits and costs associated with such an investment. While a house is typically purchased in order to live in, land purchases can offer a variety of other possibilities as well. Land can be used as a long-term investment or may even be used to launch a business.

However, there are several issues that potential buyers should consider before investing in land. Purchasing an empty lot may leave you subject to certain zoning limitations which could prevent you from erecting a home on the property. Additionally, ordinances and covenants may also apply to the land which further restrict development possibilities.

It’s important to assess the location of any potential land purchase since this will affect both the cost of the initial purchase as well as the value of the land in the long run. Furthermore, buyers should make sure to take into account any associated costs such as surveying fees, title searches and taxes. Utilities and access to roads also need to be investigated since these will likely affect development potential. Additionally, assessing water supply availability (wells, City, County supply) is a must before investing.

Finally, it’s important to find out if there are any easements or rights-of-way assigned to the land which may restrict building possibilities. Also make sure that flooding isn’t an issue in the area prior to purchasing a lot; this could have major consequences down the road.

With that in mind, here are some do’s and don’ts when it comes to buying vacant land:

Do

  •  Work with an experienced real estate agent who is knowledgeable about the area you’re interested in. They can help you find the perfect piece of land while keeping your best interests in mind.
  • Have your finances in order before you start looking at properties. It’s important to have your down payment ready and understand what documents will be required during the closing process.
  • Take any necessary utilities and road access into account when assessing each property.
  • Look into local incentives that may help make your purchase more affordable, such as tax credits or other discounts offered to landowners, the U.S. Department of Agriculture (USDA) or Hard Money Loan / Construction Loans.

Don’t

  • Expect to get a loan easily for an undeveloped piece of land. Because the land isn’t ready for a build and there may not be specific plans to build or use the land just yet, a lender doesn’t necessarily have a solid guarantee for the investment. Raw land is more of a “TBD” investment –Because of this, you can expect to pay a higher down payment on a loan, up to about 50%. Many buyers opt for cash transactions instead. If you need financing, look into loans through the U.S. Department of Agriculture (USDA) or Hard Money Loan/ Construction Loans. Larger Down Payment
  • Skip environmental tests if needed — this could cause problems down the road if not done properly.
  • Forget to have a survey conducted on the property before purchase. It’s important to make sure there are no issues with boundaries and that you know exactly what you’re buying.
  • Assume that you can have the land rezoned. This is a lengthy process and may not be possible at all depending on local zoning regulations.

If you’re considering buying land in California, remember that it can be an exciting journey but also involves many considerations and decisions along the way. These steps will help ensure that you make a wise investment when it comes to purchasing vacant land in the IE. Making sure you understand all of your options and have the right resources on your side will help ensure that you make a wise investment.

View Current Land Parcels and Possibilities below!

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Andrea Murray

Broker / Owner At RE/MAX Empire Properties and Team Leader of The Murray Team! We don't just sell homes; we build relationships. We understand that real estate is not just about square footage and pr....

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