Here are some tips to follow for buying property with little or no money when you are ready to start looking for your piece of ground.
1. Have some money. I know this sounds contradictory, but you really are not buying with little or no money. You are buying with little or no money all at once. The term earnest money refers to the part of the deposit/down payment you give with the offer. It says to the seller, “Hey, I am serious about want ing this property.” You need to have this. Give up a summer of eating out at your favorite restaurant, and you’ll have $500 in no time. Anything less than $500 looks like you are dealing from a weak position; anything more makes you look too eager.
2. Look for listings that have been on the market for a long time. A seller who has not sold his property after a year or more on the market is more likely to be creative with you than the seller whose property was listed last week.
3. Look for OWC (owner will carry) or OMC (owner may carry) in the listing. Either way, this means that you will not have to go through a bank. If the seller has done this before, he may not even require a credit check. He will be holding the first deed of trust on the property, and that’s all he really needs. If you default, he is first in line to get the property back.
4. Ask for a delayed closing. The worst thing the seller can say is no, but he may be willing to delay closing past the typical 30–60 days. Any amount of time he delays is more time for you to get the rest of the funds you need to close. Time really is money. Also, use this time to search for the property lines and corners. If you can find the pins at all the corners, you may not want the added expense of a survey.
5. Ask for unlimited access to the property before closing. This tactic usually works well with raw land, but don’t expect it to work with a house or cabin on the property. Unlimited access will allow you to camp out on the property while you save more money for closing.
6. If the property has a cabin or a house on it that is unoccupied, ask the seller to rent it to you for six months and have 80 percent of the rent go toward the down payment. This tactic has also worked for me when purchasing houses. In the past, I have also negotiated for 100 percent of the rent for six months to be applied toward the down payment. That’s like living rent free for six months!
7. Know what you are willing to compromise on but ask for it all. You never know — you just might get it.
8. Remember the statute of frauds. Simply put, this legal principle means that anything and everything you think is a part of the deal must be in writing and signed on the offer/contract. If it isn’t in writing, it means nothing. I have had dealings with both honest and dishonest real estate agents. Trust none of them. Even an honest agent can make a mistake that ends up costing you. Have an outline of your offer with all the points of concern written out and double-checked before you make your offer.
9. Review the contract to be sure it covers all these points before you sign it.