We want to help you understand how to wisely do your due diligence when you buy a ranch or farm.
And don’t forget, we are here to help you pick and purchase the perfect tractor when the time comes.
Time to get started.
When you are considering the purchase of a ranch, farm, or rural land --- you need to know what you don’t currently know.
You need to be very wise when purchasing and ask a lot of questions.
There are some very specific questions that you must ask before you close the deal. That’s what we are going to cover in this brief article. This will help you assess the property as well as determine if the purchase is right for you.
Some of the basic questions you need to ask and get answers to include:
What is the purchase price?
What additional costs are going to be incurred to make the parcel livable or construction-ready?
Does the proposed land meet your personal requirements?
Can you use it for whatever you want to use it for?
What would be required to adapt it to your needs?
The key is to make a list of your wants and needs and then check them off as you get answers.
There is a lot to consider before purchasing land for a farm or ranch.
Answer questions such as:
What are your goals?
Are you interested in gardening, farming, raising livestock, or a combination?
What is the topography?
What will it cost to make the forest into a pasture?
Will you have to renovate the field?
Is there enough water to irrigate or is it a sub-irrigated pasture that needs no irrigation?
Are there trees and bushes on the land?
Are the trees marketable timber?
Can you use the wood in an outdoor wood furnace?
How is the light?
What is the slope of the land?
What kind of sunlight does the land get?
Is it on a hill, or behind a hill --- so it gets significantly less daylight?
There are always things to consider. For instance, north slopes tend to be cooler. They can lose up to four weeks of a growing season compared to comparable parcels with full sun access.
Are there structures on the property?
Are there sheds, overhangs, an old barn, or remains from a corral? Some stands are worth a lot of money.
Determine if any existing structures are usable for what you want to do on the land. If they aren’t usable --- what is your financial estimate to make them usable or to remove them?
Let’s discuss soil.
What kind of soil is on the property? Is it fertile and deep, or hard pan? What can you grow in it? Will you be able to use the soil to plant in the ground or will you benefit from raised garden beds and composting? What will you need to do to get the soil quality you want?
You can even take soil samples and have them analyzed. It is pricey though.
Have you considered planning?
Here we are referring to city, county, and state issues. Some parcels may appear to have no issues until you apply for a permit or pursue a development project. And then all sorts of things may show themselves.
Before you purchase any land, go to the county planning office and meet with a planner. Ask the planner to look at the parcel(s) you are considering and then ask if there are any concerns about the properties. Are there any apparent issues that would prevent you from using the land in the way you intend?
Find out what is required for development and building. This may involve some form of master planning or site planning. This is a good thing because you will have to think through what you want to do.
Ask them about the process for obtaining a building permit (if you intend to build on the land). Discuss this with a person knowledgeable in construction --- who can point out anything unusual.
If there are issues, get an understanding of what it might cost you. Also, find out how long it takes for the county to issue the required permits or perform inspections.
Should you investigate any red flags? Yes. Find out what they are and who you need to contact to get specific resolutions.
Ask --- “Are there any designated wetlands on the property?” If there are, you will have some specific building setback requirements.
Are taxes paid up to date? This is very important --- yet often overlooked. This might require costly professional help prior to the actual purchase.
Next, you need to examine some potential legal challenges.
Let’s start with water rights.
This issue isn’t about whether there is water in the well. It is if you have the legal right to drill a well or use water on the property for activities above and beyond personal use.
What rights do you have for irrigation? What rights do you have for livestock watering?
Water for personal consumption is not usually an issue, but you need to make sure you can irrigate a field if you intend to do that.
What about property boundaries?
Is there a recorded survey? If so, get a copy from the county. Verify it with boundary markers. Talk to adjacent neighbors with existing fences and ask them if the fence lines match their understanding of the property lines. Walk the property. See if there are any other fences that might infringe on your future use. If they have been there for a while, they could pose a legal boundary issue.
If there are any potential issues or critical boundaries to be verified --- have a property survey done. Then put in the property corners. Prospective buyers often omit this step. Evaluate your level of comfort and security vs. the cost of the survey --- which will be thousands of dollars.
Look at an aerial map of the land on Google Earth. This can be an eye-opener. The county assessor maps also can be a great resource. Have a clear sense of the property lines. Rural property lines, while very important, are not exact. A small discrepancy on a 20-acre parcel is not nearly as important as one on a standard city lot.
What about easements? This is huge.
Are there any recorded easements on the property? There could be an easement for the electrical company to put a future 25,000-volt power line through the center of your property. There could be an easement for a new natural gas line. It could be for a power line. Do you need to get through a neighbor’s property to access yours?
If there is an easement, is there a maintenance agreement?
Do you have legal access to your property?
If you access your property directly from a county public road, you have clear access.
If it is from a private access road, or if it crosses over a private parcel, then you must find out if the access use is recorded. Does the county recognize this as the legal access for the parcel?
Determine whether additional work and funding is needed to upgrade the road to the required county standards.
Talk to the owner of the property that owns the road --- and see what their understanding is. If it is a road used by multiple parcels, determine if there is a Road Maintenance Agreement. This will determine who is responsible for routine and special maintenance of the road. When the road needs more gravel, who pays? Who pays for winter plowing? Who does the work?
Many rural areas have a homeowners’ association fund for maintenance. While these can be well-run funds --- be sure you know the fees in advance.
How about rural property utilities? This has blindsided many buyers.
What power is onsite or nearby? What is the power company’s estimate cost to bring power to where you potentially want to put your structures? Should you bury the power or run it overhead on poles? Buried power is less likely to be affected by wind, snow, and ice.
Do you need or want three-phase power? Some utility companies provide it --- and some don’t.
It is needed for heavy-duty shop applications such as welding equipment.
Have you checked into phone service, cable service, cellular service, and internet access?
Sometimes phone service can be run in through the power line --- but is a different utility from the power company.
How close is a telephone wire to the land? Same with cable, cellular, or internet. This can be costly. Get all the information from your local providers.
Have you checked into the available water supply?
Is water available onsite or nearby? A strategy for obtaining water is vital. This may be one of your largest risks.
If you are buying a developed property --- test and inspect any existing well(s). There are many companies that can quickly and inexpensively test well capacity and the water quality. This will give you a clear understanding of existing water sources.
If there is no acceptable source of water, you must arrange to dig or drill a well. Drilled wells are common. Neighbors or a local well-drilling company can give you an idea of what, where, and how much water might be obtained by drilling. There is no guarantee. Some sites have water. Some do not. Costs of wells/pumps could be from $3,000 to over $25,000.
Surface wells are the same as dug wells. If there is water near the surface, this could be one of your options.
Let’s move on to sewers.
Is a public sewer available? Is there an existing system of septic tank and drain field? If yes, you should inspect and test them. If none exists, a new septic system must be installed.
Your local health department can help you find a designer and installer. The design will be based on the kind of soil that is used for the drain field.
Next, beware of wet ground. This could cause significantly higher costs for the system.
And finally, you need to have existing homes and structures inspected. You must have a clear understanding of their condition. This will provide you with the basis to estimate any additional work you may have to do to make it livable and/or usable for your purposes.
If any are condemned --- the county may require you to either repair or remove them. In a case like this, you may decide to have the seller remove it from the site prior to closing on the property.
By wisely doing your due diligence, you will be able to sleep better knowing that you have examined this major purchase and you are ready for any next steps. Or you may choose to simply walk away.
There are additional considerations that are property-specific as every property is different.
Hopefully, you are now ready to start asking questions as you begin the buying process.
If you need any further help or have any questions about buying a farm, tractors, or anything else, please contact your dealer, local mechanic, or call us at 602-734-9944. Please ask about our current new and used tractor supply.
Team Tractor Ranch - #1 Tractor Dealer in Arizona. We sell and service most major brands of tractors including Yanmar, Kubota, John Deere, TYM, Mahindra, Kioti, Case, New Holland, Massey Ferguson, Ford, Deutz, Case IH, Farmall, International Harvester, Branson Tractors, LS, Shibura, Claas Tractor, McCormick Tractors, Valtra, Solis, YTO, Montana, and Nortrac.