If you are considering purchasing farming or agricultural land, you want to first make sure that this is the right decision for you. There are a number of factors to consider before you dive into the process and it is important that you take the time to really explore and consider all of them. In addition to what will be discussed here, you also want to ensure that any companies that you are working with to learn more or to secure your land, are reputable, such as Western AgCredit.
Make a Complete Plan in Advance
Purchasing farming or agricultural land is a major undertaking, so you have to be realistic and approach the opportunity knowing what to expect. It is imperative that you take the time to learn more about this type of land and what is involved with securing it. The first part of the planning process is finding the land that best suits your needs and what you desire to purchase this type of property for. Once you figure this out, you want to plan for the buildings and necessary land development.
With the larger plans now determined and out of the way, you have to think about the small elements that are necessary when you are operating this type of land. Common examples include livestock and all of their related expenses, equipment, machinery and staff to help you in the daily operations of your property. You also have to plan for elements, such as paying taxes, making improvements and other expenses that are not monthly, but still needed on a relatively regular basis.
Figure Out Your Financing Needs
Most people who are looking to purchase farming or agricultural land are going to need to get some type of financing in order to bring this to fruition. The first step in this part of the process is looking at the finance companies in your area, such as Western AgCredit, and making sure that they have the financing options that you are going to need.
To start this part of the process, you want to meet with a loan specialist who is knowledgeable and experienced concerning financing for farm and agricultural property. They will be able to help walk you through the process while ensuring that you are properly informed every step of the way. This type of professional will aid you in exploring your options and they will dig deep into your finances to make sure that the financing choice that you choose is going to be the most beneficial for you.
One very important element is considering the type of loan that you might pursue. At the most basic level, there are long-term loans and intermediate-term loans. Long-term loans are usually in place for more than 10 years, while intermediate-term loans are usually in place for up to 10 years, but might also be as short as 18 months.
Explore the Land You Are Interested In
Now that you have a plan and you understand the basics concerning the financing, it is time to start looking at the property available where you want to make a purchase. It is imperative that you work with a real estate agent that is familiar with this type of property. Some of the most common benefits of working with a real estate professional throughout the process include saving you money and time, ensuring that you know the area, being able to evaluate the property and having specific market knowledge.
When you are looking at what is available, you want to make sure that you get a complete list of what is included with the property. For example, some sellers might only be offering what cannot be moved, including the physical land and the primary structures that are on the property. However, others might be selling livestock, equipment and other items that can help to make daily operations easier. You have to weigh the costs to determine if having such elements included is the smartest financial choice.
If you are planning to use the land to grow food and plants, you must have all of the needed information concerning soil drainage and the type of soil. You can have an expert come out and do an inspection to aid you in getting this information. Remember that not all soil types are going to allow for easy growing, so you simply want to make sure that you know what you are getting yourself into.
Securing the Property That Meets Your Needs
The final part of the process is getting the property that best fits your needs. You want to make an offer on the property that you are hoping to secure. Your real estate agent can help you to determine a price that is fair for all parties involved. Remember that negotiating can be a good thing so do not shy away from this.
Once someone accepts an offer that you make, it is time to get the loan process rolling so that you can get the necessary financing. Once the loan is approved, your lender will make sure that the property is appraised to ensure that the true value correlates with what you are paying. You will then tackle all of the closing tasks that are necessary.
Once the financing is set and ready to go, you want to insure the property. This is considerably more complicated than residential insurance, so you want to work with a company that specializes in farming and agricultural policies. They will be able to help you to determine the needs of your property so that it is adequately protected.
You can see that there are a number factors to consider before you start the process to purchase farming or agricultural land. With this information, you can make a more informed decision. Make sure that you take your time with this process because this is not something that you want to enter into lightly. Once you are ready to take the plunge, make sure that any companies that you work with to help secure your land are reputable and working with your best interests in mind.