Mistakes Not to Make when You Own a Large Piece of Land

Whether you live on a family farm, own land that you hoped to build a dream home upon or have a cabin on a large plot of land, there are a number of things you need to know now so you don’t make a mistake when it is time to sell the land. Don’t Accidentally Divide the Land among Your Heirs When it comes to your estate plan, you need to take care not to divide the land among your heirs by accident. The last thing your family needs is a farm or large homestead split equally between three heirs along with a war over who gets to keep the property and trying to find a way to pay the inheritance taxes. If you want a family member to inherit the property whole, state such in your will. Then make provisions such as signing up for life insurance or having other financial accounts set aside to cover the taxes. You should also decide now whether or not the best thing for your heirs is to sell the land when you die and split the proceeds among them. If you state this in your will, one of the heirs can still seek a mortgage and buy the property but now there isn’t favoritism or fighting about the matter. Don’t Subdivide among Family while Alive Don’t subdivide your land while you are alive. For example, don’t carve out an acre on the corner of your farm or ranch and gift it to your heirs. Even worse is when someone is given a house on a plot in the middle of a ranch with title to it. This is the real estate equivalent to trying to sell a board with a slice carved out of the middle of it – while you might find a taker, the difficulty of working around the whole makes it hard to find a buyer because it is so hard to use. This makes it much harder to sell the property whether due to financial pressure, health problems or as part of an estate. You also create animosity for the gift recipient if they feel obligated to live on the land you gave them when they’d rather move for work and resentment among heirs who didn’t receive such a gift. If you want to have a grown child live on the property to help you run it, build a house that could be used as a guest house or worker housing while retaining full rights to the property it sits on. Then you can let your relatives live in that home with or without paying rent but without affect the value of the whole parcel. Don’t Sign Up for Conservation Easements Conservation easements promise money up front and reduced property taxes over the long term in most jurisdictions. What would be the problem? First and foremost are the restrictions the easements place on later property owners. Rules that prohibit the land from being turned into a low density development, limiting what could be planted or raised or putting mandates on future owners’ agricultural practices terrify most future land buyers. The second reason not to sign up for a conservation easement is the possibility that the fine print makes it almost impossible to sell the land to anyone except the conservation group or the government, and conservation groups like to buy land to sell to the state at a hefty profit. Don’t Forget to Pay Taxes and Assessments Neglecting to pay your property taxes runs the risk that the property will be sold at auction for a fraction of its market value. If you are cash strapped and unable to pay the property taxes, consider selling the land before the local jurisdiction seizes it. If you are facing declining health or dementia, sell the property now and live your life instead of struggling to take care of the property and yourself, risking losing it all because of a late payment. In some areas, one time assessments hit periodically to pay for roads, drainage ditches and parks. If one of these assessments comes up, don’t forget to pay them. Taxing authorities are as eager to take property for failure to pay an assessment as property taxes. What are your solutions when you have a large piece of land and cannot or do not want to keep it? 1. We buy land, regardless of its current use and condition. And we can buy that raw land that you never were able to build a home upon. 2. If a family member has passed away, we buy land so that the heirs can receive the money they need to move on in life. 3. If you have trouble maintaining your property, we buy land and give you the money you need to move into a low-maintenance property or assisted living. You want to sell now rather than later, when the property has had time to deteriorate.