Give me land, lots of land, under starry skies above...
After my grandaddy died and it became apparent that we wouldn't be able to purchase the his farm, we quickly engaged in a search for our own land. Naively, we thought that this would be a process similar to buying a house, but quickly learned that this was not the case.
Our goal was to find around 5 acres (or 7 if we were really lucky!) that would already have a house on it. The condition of the house didn't concern us too much since we are experienced DIY enthusiasts, but we wanted to stay within a reasonable budget so that we could afford renovations and not be "house poor." We have a wonderful realtor that is also a family friend, and we set out on our search. For almost two years, we spent almost every weekend driving around the Sumner County area looking for available land. We knew what we needed: a place that was in good enough condition that we could move in while we renovated (while also continuing to work in our day jobs), a place that was suitable for our dream of raising goats and chickens, our dogs and our son, and a place that was close enough to town to be convenient, but far enough away to be quiet.
We lived in a subdivision, and we wanted to escape that lifestyle completely. Our realtor took us to see place after place, but we were caught in the "Goldilocks trap" - this lot is too narrow, this lot is too small, this lot is $400,000... you get the idea. While there were many lots available, none were what we needed for our vision and/or our budget. We came close to making offers on a few places, but never took the plunge. We didn't give up though.
In the early spring of 2011, I was driving home from the school where I teach, and while stopped at a red light I saw a sign for an upcoming land auction. The address seemed vaguely familiar, and when I got home, I googled the address. I was shocked to see that the land auction was for a property that we had driven by many times. It was a gorgeous piece of land, but it was over 100 acres (we weren't opposed to that!) that had been priced at over 1 million dollars (we were opposed to that!). Apparently, the owners hadn't gotten many offers, so they had decided to break the acreage into 5 smaller tracts and auction them off. We couldn't believe it and made plans to go visit the property. We casually mentioned the auction to our close friends, and they went to go see the property with us. It turns out they, too, were interested in purchasing a piece of land, and there were 2 tracts around 15 acres each that were side by side. What luck!
Before we visited the property that weekend, my husband stopped by the auctioneer's office and picked up some information on the land. He also picked up some information on how property auctions work. For those of you who haven't been to one, property auctions are a different process entirely from the traditional route of buying a home through a realtor. At a land auction, you are not bidding on a specific piece of land for a specific price. Instead, you bid an amount you are willing to pay per acre for a piece of land, and then if you win, you choose which tract (or tracts) of acreage you will buy at that price. For instance, if I bid $3,000 and won, I could pick the parcel I wanted to buy and would be agreeing to pay $3,000 per acre. So if that parcel was 10 acres, I would pay $30,000. If you wanted to finance the land, you needed to be pre-approved and also needed to be ready to pay 15% down the day of the auction if you won the bid. With that in mind and hoping for the best, we started the pre-approval process with Farm Credit, one of the only lenders in our area who will finance large tracts of land.
Armed with our new found knowledge and our friends, we visited the tracts the next weekend. There were 5 tracts - three that were around 15 acres each, one that was 35 acres and in a flood plain, and one that was 54 acres. We walked blissfully through the tracts, seeing how each differed from the other and deciding on which ones would be our first choice. We walked to the very back of the property, taking in the 54 acre tract and commenting to one another how beautiful (and unattainable) we thought it was. We left deciding to bid in hopes of getting tracts 1 and 2 (each around 15 acres) between the two of us.
Now that we were hoping to buy undeveloped land, this changed things for our budget. We crunched some numbers and decided that we cold spend around $100,000 on land. That would leave us enough money to build a house after we sold the one we lived in then. Based on our total budget, Jeremy made a spreadsheet what would be the maximum amount we could bid per acre would be, depending on the size of the tract. We arrived at the auction armed with our spreadsheet and a stomachful of butterflies, and the bidding began.
The first three bid winners quickly scooped up tracts 1, 2 and 4. We got close each time to winning, but someone was always willing to bid above what we could for our budget to stay intact. That meant the only two tracts left were the one in the floodplain (didn't want that one!), and the one that was 54 acres. There was no way we could afford to buy 54 acres on our own, so we looked at our friends and said, "How do you feel about purchasing land together?" They were game, and when the next bid went up, we were outbid. We thought at this point it was game over, but to our surprise, the winner wanted the flood plain. The last bid went up, and we won the bid. We also stayed right on our budget. Turns out, there really wasn't anyone there who could afford to buy all 54 acres, but by our joining forces with our friends, we could. We couldn't believe it. We were land owners! Of 54.03 acres! Persimmon Farm was born.
From the experience, we learned some valuable lessons worth passing along:
1) Have a budget. You need to know what you can afford so that you can realize your dream in a reasonable amount of time. Keep in mind that just because the lender may approve you for a certain amount doesn't mean you can afford that amount in real life. Be thoughtful, realistic and deliberate - it's much harder to enjoy your farm if you don't have the money to sustain it.
2) Have a plan. When you go to look for your land or farm, you need to have a definite vision of what you plan to do with the land. It does you no good to buy 5 acres if it is wooded and you need it to be clear, or if it is hilly and you need it to be flat, or if it has rocky soil when you want to use it for crops. You could remedy some of those problems later on, but it could be costly, so remediation needs to be a part of your budget in that case.
3) Do your homework. If you are going to a land auction, I can't emphasize enough how important it is to know how much you can pay per acre for each tract up for auction. Don't get caught up in auction fever and make a mistake you can't afford. Know what money you may have to pay as a down payment on the day of the auction, and get pre-approved if possible. Visit the land ahead of time, and see what restrictions are a part of the deal. We went (for fun only) to a land auction down the road from us and one of the restrictions was that no barns could be on the front half of the property and the house had to be all brick. You should account for that before you bid.
4) Think outside the box. Originally, we had no intention of buying unimproved land, or land at an auction, or land with some friends, but it worked for us. Investigate all your options, and develop a good network of people who can walk you through options with which you may not as comfortable or knowledgeable.
5) Be patient. Don't settle. It took us almost 2 years, but we wound up with land that is everything we hoped for and more. It is perfect for our needs, and we couldn't imagine being anywhere else.
We'd love to hear from you. For those of you who already have land, how did you find it? For those of you who want to have some acreage, what would you say is the priority feature you are looking for? What would be a deal-breaker?
