Officially Land Owners!

So- it’s official!  We own Land!  Just over 8 acres of dirt, rocks, and trees!  Oh ya, and the occasional deer, chipmunk, and squirrel… and probably other creatures of the wood!

It was a little nerve wracking to say the least, but the one thing I can say is: I couldn’t have done it without Mike.  He’s been my security blanket throughout this process- there to reassure me and to make me feel much more at ease.  I was freaking out a little bit when we were just trying to close the first time.  Mind you, our lawyer didn’t see the paperwork until the day before Thanksgiving and then it was right when he was leaving for the holiday.  The closing was supposed to be the following Monday.  We got to push it back about a week and a half because of it.

So- what’s the paperwork you’ll see??

For one- no matter if you are doing a private sale or not- you will see a purchase and sales agreement in the beginning.  This confirms your interest in the property and it always has a check of some amount attached.  When we were looking at a different piece that we really liked, we signed the paperwork and gave a $1,000 good faith deposit.  This ensures that we aren’t just screwing around and that we are truly interested.  Too many people get to that point then back out, making it harder for the seller to sell the property while your interest is there.  The good faith payment is lost if you don’t follow a few steps. 

In our case, the steps were to get financial backing- and it had to be in the form of at least 3 denial letters- to prove that we tried several means.  We had a really hard time securing a personal loan for the first piece (and it must’ve been fate, frankly!).  We were told- we didn’t have enough credit history, that I was at my new job for too little of a time, and we were also told at one point that our debt to income ratio was too high…. ??? Really?  I still crab about this because I could’ve been unemployed for at least a year and still covered all my bills- AND Mike’s.   It’s not like we both owed a butt load of money to anyone and our credit spending is minimal.  We even tried to have Mike’s Dad cosign with us- and we were still told we didn’t have enough credit history- when we inquired about what they meant, we were told it wasn’t the right type of credit.  Apparently, there’s different types of credit now.  All they had to say is that they weren’t loaning and not put the blame on us.  It was ridiculous!

Anyways! I digress!

Since you know that we didn’t do this through the traditional means, I’ll tell you about what we saw as a private sale purchase.

After the Purchase and Sales Agreement, we also had several forms. 

The Real Estate Transfer Tax Form:

This form has information about the seller, buyer, lot, and price that the lot is being sold at.  The State also has a tax rate that it employs when property is bought and sold.  This is usually split between the seller and the buyer.  So- we had to sign off on the tax and on the information that was there- to make sure it was accurate.

Exhibit A

Exhibit A may be called other things as well, but this is usually an explanation of the lot that you are purchasing.  It has quite a bit of terminology that, frankly, I don’t understand or care to.  It seems mumbo jumboish- but always make sure that it’s the correct piece! 

HUD

US Department of Housing and Urban Development.  This is a document with all costs and a breakdown of the costs.  Your final down payment and closing costs are all listed on that.  Our closing costs included things like the Tax from the Transfer Tax Form,  Title Charges (for the title search, which is always done before a piece is bought or sold!), Title Insurance (if you opted for it- and we certainly did- you just can’t be too careful!  You could lose your property if years down the road someone finds out that there was a lien on the property- so spend the $165 or whatever it costs- it’s worth it!), The Deed Recording Fees and Mortgage Recording Fees.  A lot of this information goes to the town and state so that it’s all updated in the records as to who owns the property.  Those are just a few things- we also had lawyer fees of course.

Department of Revenue Administration Inventory of Property Transfer

This document also has seller/buyer information along with more detailed explanation of the property.  It tells what type of property (residential, commercial, etc), if it’s Land Only (which ours is),  what kind of features it has (is it waterfront property?), if there is a structure on the property, etc etc.  It’s just a necessary piece that also gets filed with the state.

Tax Proration

We saw this form, but I have no idea if you will too if you are going through a bank or traditional means!  I’m sure you will see something like it.  The Tax Proration document is a document outlining what taxes has been paid for the current 6 months (because usually tax payments are due every 6 months).  In our case, we had to pay a fraction of this since the seller pre-paid the taxes for the land. 

Title Insurance Offer

The title insurance offer is the form that tells you exactly how much your title insurance will be.  I must say- no matter what- I recommend getting this.  It’s not too expensive and it’s a 1 time fee.  So what, you pay 150-250 bucks or whatever… at least that covers you!  As I explained previously, it’s worth not losing your land or house because of an issue found later down the road.

We also had the following since it was a private sale.  I honestly can’t say that you will EVER see something like this, but I have no doubt that you will see something similar if you are borrowing from a bank… and it’ll probably have a lot more legal mumbo jumbo than ours did!

Mortgage Deed

We had a Mortgage Deed, of course, because it was a private sale.  This sale is also “financed” by the seller.  So we are paying the seller on a monthly basis for the land.  Since we had such a hard time with the banks, we were lucky that this individual opted to do this with us.  Of course it helps that he works for my Dad and Mike’s Dad use to do some construction work for him. 

Promissory Note

As the name implies, this is a note that promises payment to the loan holder (in our case the seller).  It tells how many payments, what the payment is each month, when the payment is due, and the terms to payment, like what happens if you default.

Warranty Deed

This is just a document we received that said that we were purchasing the land from the seller.   It was pretty basic really.

That was all the documents we saw.  If you went through the Traditional Means, I’m sure you would see a lot of the same things I saw plus more.  Banks tend to flood you with paperwork- and sometimes I find it tedious to read all the fine print- but remember this: it’s worth reading because you never know what can injure you!

In the end, we signed all the paperwork- and now the property is officially ours!  After quite a few months of banging our heads on our desks, we finally did it!  I hope this is the hardest part.  Even Mike’s Dad mentioned several times that the economy being the way it is has made it near impossible for us to accomplish such a feat.  Fortunately, we found someone that really wanted to sell his property and was really willing to work with us and finance it for us! 

So- us not getting the other piece was fate.  The piece we just bought is nicer, in a better location, and has more usable land!  The other piece was 12 acres… the one we just bought was 8.  Just enough to not see your neighbors- YAY!

Now comes the fun stuff… like… picking out your kitchen cabinets! Too many choices coming!  I’ll keep you all informed!

Closing Documents and Thoughts

Ok- so we are so close to signing, it’s actually pretty scary!  All these feelings flooding in- excitement, nervousness, sadness, happiness.  It’s all part of it I suppose!

Anyways- so we got all this paperwork to look over before the signing actually takes place- which is tomorrow.  I noticed on one of the pieces that Current Use was underlined (which was in the tax document that I had requested to see before the closing).  I had to question it because we were told that the property was not in current use, plus it was on the paperwork that the seller uses to list the property.  I was quite frankly upset at first because I thought the wool got pulled over my eyes.

Fortunately- I decided to ask the question… to get it clarified- and the Title company told me that it was underlined because it was a question to double check on their end and they did let us know that the land, is in fact, not in current use, which obviously makes me happy because you do have to pay taxes when the transfer occurs to take the land out of current use.  This is usually 10% of what the value of the land is (or what you are buying the land at).  I’m sure that in different states, this is different- but in NH it’s usually 10%.  We simply don’t have that extra at this point since we have literally drained our accounts.  I’m on edge and nervous, but I know and keep getting reassured, that this is the best investment we could possibly make.

They’re right… even if we sit on the land for 5 years and not build at all, we could sell the property for twice what we have paid, I have no doubt.  I’d rather build a house though- even though that means mortgage and financing.  I’m ready for that part of my life to begin though!

I’m happy we are buying land and building.  At least this way, the land is ours, the house is what we want it to be- and it’s part of our lives that will help both Mike and I grow with each other.  I love that he wants to do this.  I love that he wants to put a roof over my head and build something to what I want.  Simply said- I love how much he loves me… but I still love him more! J

That aside- I should mention that we have had house building plans (blueprints) for quite some time.  We had designed and “built” the house on Chief Architect.  Mike is very talented when it comes to this.  He was getting frustrated with me for a while because I had no input.  The only two things I said is that I wanted a porch and I wanted cathedral ceilings in the Dining Room and Kitchen.  He built those in! 

As time went by, and as we continued to look at and design the house, we started changing things to make more room.  Our Master Bedroom is not huge, in fact, it’s pretty much the perfect size.  Our Master Bath, however, was TINY.  I asked him to move it so that it was on one side of the house, instead of separating two rooms, and then make the other room larger.  It was PERFECT.  He was thrilled that I had some input.  We literally doubled the size of the tiny Master Bath (which was probably about the size of what we have currently) and he even added in walls to keep the shower in, and the toilet is behind the bathtub/shower, so when you first walk into the bathroom- you don’t see the toilet. 

I also had ideas for downstairs.  I told him that I thought the best way to conserve space was a spiral staircase for the basement.  Since we want to do a livable, walk out basement, we needed the room for the walk out part.  That being said- the spiral staircase does not cut off where we want the sliding door. 

I do want a farmers porch in the front- but Mike wants a porch in the back where the walk out basement is.  I don’t disagree- I think it would be good there… but we won’t be putting that in right away.  We’ll have it set up so we can put it in easily after we start living there.

Our #1 goal for building a house at this point it to build it so that the basement is unfinished- so we can live in the house and fix it up while we are living there.  To do that, we have to have an occupancy permit.  Our best bet is to finish off the main living area- the kitchen, dining room (which will likely be our living room for a while), two bathrooms and two bedrooms. 

I can’t wait for the house building process to begin!  I’m excited- and thrilled that I will be learning a new trade.  With Mike by my side, I have no doubt we can make this work, and I know he will teach me everything I need to know.

But just imagine what needs to go into the house! Plumbing, electricity, heat options, windows, doors, framing, walls, cabinets, floors, sinks … the list goes on!

I’m ready to start building our home- and continuing to build our love.