How To Buy Land In California

‍Buying land in California is a bit of a process, but certainly doable for the average person. So how do you go buy land in California?

You can start the process of buying land in California by either arranging financing first or finding land first. If you plan to pay cash, the process might be a little easier. You’ll want to know about the area you are buying in to get the best deal possible. With or without a realtor, you can make an offer and buy land from the previous owner.

We’ll walk you through a few of the steps you’ll need to take to buy land, from finding the right place to getting the bank on board with financing. We’ll also discuss the role of a realtor and the Internet in finding land.

‍Finding Land in California

So we’ll start by saying that you can do this first step of finding land first, or secure financing first. Part of the challenge of working on financing before finding land is that you might not know what you can afford. A bank or your savings account could probably readily tell you your budget limits.

Anyway, here is how you can find land in California

Internet

There are many websites out there focused on real estate, ranging from homes to plots of lands. You’ve probably heard of homes.com, Realtor, and Zillow, all of which are known for home sales though you have filters to include just plots of land, and often let you choose which size you want.

You can also easily find land specific websites like LandWatch and many others that are focused more on plots of land, rural lots, farms, and ranches. Land searches might find this easier to use because there are fewer, if any homes on the site with more filters specifically related to land.

These websites often attempt to connect with a realtor too, if you don’t already have one. The Internet is a great way to find land in California without having to go to there yet and getting a good idea of what is available. We also strongly suggest you subscribe to at least one site’s emails.

Why? You won’t have to go back and visit the same websites again to find land, unless you have some changed preferences. Subscribiing to a site also helps you get to the land first, which isn’t a competitive advantage - it’s just normal in a competitive market.

Realtor

A realtor’s job is to connect people with real estate. Find one that is an expert on buying vacant lots and they’ll keep a look out for the right place for you, and might know about plots of land that aren’t listed yet.

If you are not comfortable using the Internet, a realtor is an excellent strategy to use as they’ll combine Internet research skills with knowledge from their job to help you find the right piece of land.

There upsides and downsides to using a realtor. The seller might not want to work with a realtor because the seller typically pays the realtor. We’ll go more into upsides later as we talk about offers.

Drive around

While the idea of driving around to find vacant land sounds like a potential waste of time and gas, it might actually be quite worthwhile. Not all land plots are listed on the Internet, and realtors might not even know about them. Some are just a matter of a sign on a fence. Taking different routes to and fro will expose you to more places where you could potentially find land.

Financing land in California

So we’ll say that this might be the first thing you do instead of the second. If you don’t know how much land you can afford, but you definitely don’t have enough cash in the bank to buy land outright, you’ll want to talk to a bank first to see what they’ll let you borrow.

Borrowing money for a land purchase is a lot more difficult than buying a home. A home has some development and value while banks see land purchases as risky. Our first suggestion is to find a local credit union or small bank that knows the area well and approach them about buying.

You’ll also likely need a substantial down payment - usually in excess of 30% of the land purchase, in order to qualify for a land loan. The down payment amount can be a challenge for some. Having excellent credit can help you reduce the amount of your down payment though we would suggest putting as much down as you can anyway.

Of course, if you are paying cash you won’t have to worry about any of this. Buying with cash can also speed up the buying process as you aren’t waiting for a bank to verify your income or prepare the loan. Some sellers prefer cash offers simply because they go faster.

Making an offer on land in California

Making an offer on land in Califoria larger involves drawing up documents offering a dollar amount and method of payment to the seller. There are also things to do behind the scenes, especially with bank financing, to make sure that the land is worth what you are buying it for.

Between making an offer and negotiating, these are the parts of the process you’ll most want a realtor for. While buying land isn’t as complicated as buying a house, you should be able to understand how to make a contract with the seller. If you don’t, we would definitely suggest a realtor.

Starting your offer could result in negotiation, especially if you are working with a realtor and want them to help you save money. Note that not every market or plot of land needs negotiation. If you are getting a really good deal, you might be better off keeping the offer at least at asking price to make sure no one bids more than you.

Closing the deal on land in California

At this point, you and the seller should be in contact with a title company. The title company does legal research on the land to ensure that the seller can legally sell it, and is responsible for ensuring that the buyers name get on there. We wouldn’t suggest trying to save money by doing this yourself because the cost of screwing it up is not worth it!

The focus of closing the deal will be on paperwork. You’ll be either signing loan documents for the purpose of have provided an escrow check ahead of time that is transferred to the seller. You’ll also receive sign paperwork indicating that the land is now yours (likely under lien from the bank).

How much land is there for sale in California?

Landwatch says that California currently has about 25,000 lots of land for sale. This might be low, because the best time of year to sell is in the spring and summer. We suggest checking consistently to see what numbers do.

This number will vary from website to website depending on how many listings realtors, banks and others are paying for.

Is buying land in California different from buying anywhere else?

Not especially! A California realtor will need a California license to help buy and sell in the state, but those rules apply to nearly all states. You might deal with more environmental factors as California legislature tends to carry more stipulations about land use as well as chemical and other testing, but everything else is normal.