1: Find out how much of the land is in wetland/floodlands.
(Same parcel, one mapped with FEMA/wetlands layers, the other using contour/soil maps. Notice the soil map indicated a differing soil type at the low area. Approx 40 acres lays in wetlands/floodlands, that much can make a significant difference in price).
Resources to calculate floodlands on a parcel:https://www.fema.gov/flood-maps. If it’s not mapped with FEMA, do more research. Id.land has great mapping for wetlands and floodplains too. If all else fails, pull up a contour map and soil map. Wetlands tend to gather more silt and have differing soil types. If the contour map has a lower area along with differing soils, it’s likely it will hold water during a rain. It’s important to find floodplains and wetlands so you can price accordingly. For example, If land in a certain area is going for $3k/acre for farmland or ranchland, and a property close by has a $2,000/acre price tag, you may think that’s a good deal. However a little more research shows 50% is in wetlands, so when it rains, a runoff “river” is going through your property. Often wetlands are unusable unless you want them for waterfowl hunting. A lot of properties have wetlands/floodlands, which isn’t necessarily a bad aspect (holding tanks, ponds) but you want to ensure you’re not just buying a lake. It’s also important to locate wetland and floodplains if you plan on building structures. Insurance for a structure built on a floodplain will be significantly more expensive. Key takeaway: don’t buy floodland/wetlands at the same price per acre as non-wetlands. And make sure you don’t build in wetlands unless you love paying higher insurance premiums (psycho).
2. Don’t dismiss water:
(Texas Water Development Board has an invaluable Map Viewer to check out wells in the area)
More so pertaining to wells. Even if your property doesn’t have a well, it’s good to find wells in proximity, find out their depth, production, etc. In Texas, the wells that are not grandfathered in will likely have been recorded here: https://www3.twdb.texas.gov/apps/WaterDataInteractive/GroundwaterDataViewer/?map=sdr
Wells drilled at 80 feet will be a lot less expensive to drill than ones drilled at 300 feet. The well reports generally have the well servicer included. Give a few of them a call and ask about water production in the area. Ask what a new well will cost. Make sure there’s even a water aquifer to drill into. If there isn't, don't pay the same price for as land that does have water well capabilities.
Groundwater district: A lot of properties are located in Groundwater Districts, which puts restrictions and laws on certain well drilling activities, water usages, etc. It would be wise to research these restrictions by Google’ing that water district, usually their website has the restrictions posted on the website. Being in these districts will come up on title. You want to make sure these restrictions will not interfere with your planned activities.
Also, it never hurts to get a groundwater quality report. Well water quality isn’t regulated, and if you plan on drinking from it, it would be good to know someone didn’t throw some excess Roundup in your well. An inspector can often send off water samples for you. Also it’s worth noting if water rights have been severed from your property. If they have, you may not have the right extract water on your own land. Check TexasFile.com and search the property owner and the previous transactions for that land to see if they have been retained or severed. Concerning water ways, river frontage, and lake frontage. Is the water navigable? If it is, are you aware the general public may use the river, and are you ok with it? Find out if any water frontage allows for public access.
3: Don’t overlook access.
Access comes in many forms. If you have a paved state highway bordering your property, you may not need to worry, but what about a dirt road? What’s the condition of it? Is it going to get sloppy during a rain or snow? Does the county maintain it?
And consider easements: oftentimes a property has a dominant easement on another property in order to get to it. And sometimes it won’t be clear what the stipulations of the easement are because it's recorded with the other property. It’s essential to research– what if your easement requires you to trim all the trees off it, or to put down caliche, or what if the easement isn’t only for you, but goes through your property and is accessible to others also? What if it has an expiration? What if there is a clause that states you need to pay thousands a year to keep the easement? The same goes for your property. Does it have an easement on it that other people will use? Are you ok with that?
A good title company will find dominant easements on your potential purchase. But if your more curious about easements on surrounding neighbors that might effect you, use a mapping software (like Id.Land) to find the parcel owners. You can then search courthouse records on TexasFile.com.
Key takeaway: research easements, find out the condition of dirt roads and who maintains them, don’t pay the same price per acre for bad access as someone would for great, paved
access, research all the easements that come on your property or that come with your property.
4: Don’t dismiss how close utilities are.
(Google Earth is your friend)
Even if you want the most remote, untouchable land possible, it’s important to factor in if there is electricity, gas, internet, rural water lines, internet, etc. Most properties benefit from the bare minimum of electricity, especially if there’s intention to build a homestead, or hunting camp. Don’t forget, most water wells run off electricity too. Bringing electric lines and poles can add up quickly as companies charge by the linear foot to install. And something else to consider, even if an electric line is close, but does not border your property, do they have an easement to cross another’s property to get electricity to your parcel? Will it even be possible to bring electricity to the parcel? How much will an utility easement negotiation with a neighbor cost?
One of the best ways to find an electric line in my opinion, is Google Earth. Zooming in on county roads, looking for the shadows of electric poles is helpful. But not all electric lines are above ground. You can also look for the closest homestead or establishment and try to trace back the power lines and measure how many feet it would take to hook up to your property. Calling the regional electric co-op to figure pricing and feasibility to run eclectic lines to your property can help too. They often have their own maps we don't and can give better idea to electric lines.
You can also find out if Broadband internet is available on the land here:
Broadband Map Research: https://comptroller.texas.gov/programs/broadband/outreach/maps/bdo/
Finding out whether a property has a gas line is a little more tough. A little common sense helps. Super remote places usually don't but checking the bar ditches of county roads for "gas line" signs and meters can help. If you're sure there's no gas line, call around and see what the cost of a propane/butane tank rental will be, or even if a company can service to you.
5: Negotiate Minerals when you Can.
(TexasFile.com is a great resource all around, and can help anyone find severances, mineral deeds, etc.)
I find it’s pretty common for a seller to assert they are retaining all the minerals they own upon sell. But I also find they are a lot more negotiable than you think if you try, and they do this to help them negotiate the price of the land. Ask what percentage of the owner thinks they own (unfortunately most landowners are guessing, or wrong). Even if there’s no oil and gas production around, try to negotiate as much of the minerals to convey with the property. Any fraction or percentage of the owned minerals can be negotiated, unless 100% of the minerals have already been severed. It costs nothing to own minerals, and maybe in the future some new technology could discover a sea of oil under you. My great grandpa had no idea oil was under his dirt farm but kept a portion of the minerals, now my aunts and father get to enjoy mailbox money after oil was found there.
If you are making a mineral play, and knowing the amount of minerals the current owners have is important, a freelance landman can often do this for you for $500-$1000. Well worth it. Like I said, most owners do not know with certainty what percentage they actually own, and title companies often will not give a warranty on the minerals.
6: Get title commitment/ insurance.
I see more and more smaller parcels selling to consumers without going through a title company. It's absolutely not worth the risk to buy land outside a title company. If there is some sort of cloud or encumbrance on the title that was not disclosed on the purchase, the title company will make the buyer whole through their title insurance. Title companies have experts to ensure you receive a clean and marketable title. When you avoid title companies, you don’t have title insurance, and if you receive a bad title, its on you, and it’ll be hard to sell. Most title commitments are paid by the seller anyway. Avoid buying land without a title commitment.
7. Research similar properties have sold for in the county
(Lands.com can be helpful, if you pay for a subscription there's more info, however this can help you get started. The problem is Lands.com won't tell you when it sold, or for how much. But often times if you click on the broker's website they'll have some more data on that property for you.)
Finding comparable sales (or comps) is an art AND a science. It's important to do so however, unless you want to overpay $/acre and immediately be in a position of loss. If your neighboring properties are selling for $3k/acre, and you bought yours at $4k/acre, it's going to take a while for appreciation to catch up to a "break even".
The trick is you want to find properties that have sold recently, usually sales from less than a year ago (20 years ago land was half the price as now). Similar size properties that have sold are a must too (10 acre sales are not comparable to use for an 800 acre property). And, they need to be of the same use. Compare ranch sales for a ranch, irrigated farm sales for an irrigated farm, CRP sales for CRP land, etc.
You also will want to add or subtract improvement value. Does a comparable sold farm match the one your looking at in every way, except it has a $1m home? Of course that's going to skew the price per acre-- you'd need to subtract the improvement value before calculating price per acres. The more sales, the better the data. And don't just trust the listing agent's comparables. They have an incentive to sell the property for the highest $/acre they can, for them and their client. Lands.com has the ability to search Under Contract and Sold properties. Personally I don't like using Under Contract properties as so much can wrong before its closed, but it can help frame the data. You can also call up a land broker and just get his opinion of price per acre in general for the area. Farm credit agencies also have their own data bases of off market sales, and might be able to share some comparable data too.
Feel free to call or text us, anytime: 806-853-SELL (7355) God Bless, Corey Zant
Broker/Owner of Veritas Real Estate Co