First time purchasing...what is the process of buying land - additional costs, steps etc?

[SoilHugger]

Wanting a small parcel 1-3 acres for "amenity" purposes as the agents seem to like to call it.

Once I find one I want to go ahead with buying what is the process?

Many of them say things like private treaty but most say they are auctions.

I don't understand what private treaty is. I have read up on it but met with legalese gobbledegook. Can someone demystify what the process would be here?

Auction I know what it is of course but what do I actually do if I want a piece. Only experience I have there is using ebay!

Any other steps and costs to consider? Solicitor or such?

 

[010101]

A private treaty is a contract between the buyer and seller. The agent and the solicitors help arrange this.

 

[Humble Village Farmer]

It's exactly the same legal process as buying a house, only simpler

 

[SoilHugger]

It's exactly the same legal process as buying a house, only simpler

Have never bought one of those either so doesn't tell me much more .

 

[lloyd]

Wow must have deep pockets.

 

[Humble Village Farmer]

Have never bought one of those either so doesn't tell me much more .

In that case, to protect yourself, speak to a solicitor who will explain how it's done. Their fees will be a few hundred to a couple of thousand and they will stop you, or at least advise you against making any ill judged decisions. They have seen it all before.

Edit, their fees for overseeing the purchase will cost that, not the quick chat about how to do it.

 

[SoilHugger]

Oh yes btw, when it is an auction and there is the guide price listed on the website is it normal that they land will go for way more or could one expect to pay not to far above that, in general?

Or too broad to draw generalizations?

As mentioned many adverts are for auctions so I want to know if guide prices are what I would expect to be (able to afford to be) paying or not.

 

[suffolksmallholder]

Wow must have deep pockets.

I bought a whole barley field for sub 5k an acre so easily do-able. Cash. Nothing wrong with that
SS

 

[suffolksmallholder]

Oh yes btw, when it is an auction and there is the guide price listed on the website is it normal that they land will go for way more or could one expect to pay not to far above that, in general?

Or too broad to draw generalizations?

As mentioned many adverts are for auctions so I want to know if guide prices are what I would expect to be (able to afford to be) paying or not.

It all depends on the area you are looking at. Are you competing with the pony paddock brigade. How close to London is the plot for sale or for that matter to any large conurbation.
Is it fenced? Does it have water? Is it flat or vertical, are there crops and/or buildings there?
The list goes on.
Most auctions demand 10% of the total directly plus the premiums. Then full & final payment 30 days later.
Set your price. Go & bid & you never know!
I had one farmer as an underbidder and he wasn’t so keen on a 10 acre plot which had no easy access and wasn’t watered.
He now cuts my hedges.
SS

 

[SoilHugger]

dfdf

 

[SoilHugger]

It all depends on the area you are looking at. Are you competing with the pony paddock brigade. How close to London is the plot for sale or for that matter to any large conurbation.
Is it fenced? Does it have water? Is it flat or vertical, are there crops and/or buildings there?
The list goes on.
Most auctions demand 10% of the total directly plus the premiums. Then full & final payment 30 days later.
Set your price. Go & bid & you never know!
I had one farmer as an underbidder and he wasn’t so keen on a 10 acre plot which had no easy access and wasn’t watered.
He now cuts my hedges.
SS

Thanks. Indeed I was thinking some of those points.

I am looking in rural wales which I hear is a tad cheaper?

If I am going for a meadow I did think I would be in more competition than some nondescript scrub land the latter which would be fine for me if it was in the right location and good aspect for solar.

My mum suggests to look at past auctions to see what other ones have gone for to get a feel for things.

Hmm so 10% on top even for the buyer! Greedy buggers! I shall factor that in then while looking at prospectives.

 

[upnortheast]

Hmm so 10% on top even for the buyer! Greedy buggers! I shall factor that in then while looking at prospectives.

Don`t think that is what he means.
At a land auction the conditions will probably say 10% of hammer price payable on the day.
Balance x days after

 

[Kidds]

The beauty of auctions is the whole thing is over and done with in a set, short space of time. From memory it is all over in 6 weeks from the auction.
With private treaty it can drag on for months with people quibbling over details, especially if overage is imposed.
A private treaty is just a private sale, the land is offered for sale usually at a given price and a potential buyer such as yourself comes along and offers to buy it. You can offer less and you can also offer more if you think you may be gazumped.
Overage may be a new term for you and it is very common on land sales. Basically it means if you get planning permission on the land the seller is entitled to a percentage of the increased value. For example a field is worth £10k/acre, the same field with planning permission is worth £50k the uplift is £40k less costs. So you would have to pay a percentage of that to the seller, usually 25-40% and usually payable upon grant of planning.
Only kicks in if you get planning passed, can be tailored to exclude agricultural development and can be tailored so you are the only one that can apply for planning. It is a complicated subject but one you need to be aware of, or just buy land without an overage clause.
Amenity land in this context usually means agricultural land and strictly speaking planning permission would be needed to change it to gardening etc. Not an easy thing to do and planners are usually very much against it. You would have to argue that you were selling anything you grow. Planning would be required for solar too.

Auction guide prices generally mean what the minimum price is likely to be. The seller usually has a reserve set very close to the guide price and won't sell at below the reserve.

 

[curlietailz]

Thanks. Indeed I was thinking some of those points.

I am looking in rural wales which I hear is a tad cheaper?

If I am going for a meadow I did think I would be in more competition than some nondescript scrub land the latter which would be fine for me if it was in the right location and good aspect for solar.

My mum suggests to look at past auctions to see what other ones have gone for to get a feel for things.

Hmm so 10% on top even for the buyer! Greedy buggers! I shall factor that in then while looking at prospectives.

If you are expecting to put a caravan or building with a view to building a house or turn it into glamping pods etc I expect you will have either great difficulty or pay waaaaay over the odds
Good Luck

 

[Treg]

Oh yes btw, when it is an auction and there is the guide price listed on the website is it normal that they land will go for way more or could one expect to pay not to far above that, in general?

Or too broad to draw generalizations?

As mentioned many adverts are for auctions so I want to know if guide prices are what I would expect to be (able to afford to be) paying or not.

Often a low guide price is given to draw in interest , here in Cornwall the actual price could be double.
All depends on the market at the time and how many want the same piece of land as you.

 

[SoilHugger]

Don`t think that is what he means.
At a land auction the conditions will probably say 10% of hammer price payable on the day.
Balance x days after

Oh right that certainly sounds more agreeable.

The beauty of auctions is the whole thing is over and done with in a set, short space of time. From memory it is all over in 6 weeks from the auction.
With private treaty it can drag on for months with people quibbling over details, especially if overage is imposed.
A private treaty is just a private sale, the land is offered for sale usually at a given price and a potential buyer such as yourself comes along and offers to buy it. You can offer less and you can also offer more if you think you may be gazumped.
Overage may be a new term for you and it is very common on land sales. Basically it means if you get planning permission on the land the seller is entitled to a percentage of the increased value. For example a field is worth £10k/acre, the same field with planning permission is worth £50k the uplift is £40k less costs. So you would have to pay a percentage of that to the seller, usually 25-40% and usually payable upon grant of planning.
Only kicks in if you get planning passed, can be tailored to exclude agricultural development and can be tailored so you are the only one that can apply for planning. It is a complicated subject but one you need to be aware of, or just buy land without an overage clause.
Amenity land in this context usually means agricultural land and strictly speaking planning permission would be needed to change it to gardening etc. Not an easy thing to do and planners are usually very much against it. You would have to argue that you were selling anything you grow. Planning would be required for solar too.

Auction guide prices generally mean what the minimum price is likely to be. The seller usually has a reserve set very close to the guide price and won't sell at below the reserve.

Ty for the added detail. I share bear that in mind re private treaty. Here I was thinking that auctions drag on a long time, compared to just outright buying at a set price! Yes I was new to the term of overage however looked it up and did get the gist after seeing it on some ads. I do not intend to claim for PP, as per my other post which you may look up, so should not apply to me.

If you are expecting to put a caravan or building with a view to building a house or turn it into glamping pods etc I expect you will have either great difficulty or pay waaaaay over the odds
Good Luck

As above.

On the other hand I have been seeing some very reasonably priced plots in wales with planning permission included some for around 50k. That would be a whole nother thing to my original intention though.

 

[SoilHugger]

Often a low guide price is given to draw in interest , here in Cornwall the actual price could be double.
All depends on the market at the time and how many want the same piece of land as you.

Yes I was wondering if it was just like ebay auctions (though only thing I have quite some experience with) where they will have a starting price of 0.99p knowing that it will go for much more.

Some plots it seems quite clear that is the intent where there are 11 acres for 50k starting price however others seem closer to what I might expect to pay at around 10k per acre.

So is it generally free to bid if you do not win? If so I could then bid my set price for a plot and if I didn't get it hey ho, try again on another.

If you have to pay a fee to bid it could get pricey fast and would have to carefully pick my battles.

 

[upnortheast]

If you have to pay a fee to bid it could get pricey fast

Don`t think it is usual to pay a fee to bid or buyers commision in this situation.
Often used to be a charge for a full version of the details when posted out in hard copy, now when i`ts on the internet not so common

 

[Treg]

Yes I was wondering if it was just like ebay auctions (though only thing I have quite some experience with) where they will have a starting price of 0.99p knowing that it will go for much more.

Some plots it seems quite clear that is the intent where there are 11 acres for 50k starting price however others seem closer to what I might expect to pay at around 10k per acre.

So is it generally free to bid if you do not win? If so I could then bid my set price for a plot and if I didn't get it hey ho, try again on another.

If you have to pay a fee to bid it could get pricey fast and would have to carefully pick my battles.

Usually free to bid.
It is the same as ebay, sometimes there are bargains and sometimes people get carried away.
Your spot on and sounds a sensible plan , bid what you think a plot of land is worth to you and what you can afford, walk away if it goes higher.
Maybe go to a auction on something your not interested in, just to see how it all works.
A decent estate agent will help you out if your interested.

 

[Lamb's Orchard]

I think it is not unusual these days to have to pay a fee for the 'legal pack', which contains all the info about the lot you are bidding on including any covenants or special terms being imposed, rights of way, access etc, exactly what is or isn't included in the sale. Some auctions you pay for the sellers legal fees or a contribution towards them as well as your own,. It is important to get, read and understand the legal pack as this will contain all the details.

I bought at auction. When I thought that I may end up buying by this method, I went along to a property auction locally just to have a look and see what went on. Gave me an insight into the process and what to expect.

I contacted a solicitor when I spotted the lot I was interested in and he agreed to look at the legal pack for me and give me a summary of anything I needed to be aware of. He agreed to do this for free, as in there would be no charge if I didn't buy. From memory the legal fees were about £1200 all in when I did buy. There were no other extras. As others have said, 10% non refundable deposit on the fall of the hammer (effective exchange of contracts) and then the balance to be paid on completion usually specified as 28 or 30 days later.

As I am sure you are aware, if you buy at auction you are committed to buying once the hammer falls, you cannot back out because there is something you were unaware of or had missed in the legal pack.

Edited to add: but equally well on the fall of the hammer it is yours, the seller cannot back out. I had been looking locally for a couple of years and was worried I would be priced out as the edge of village areas I was looking at were increasingly being sold as potential building plots. Although the whole bidding at auction was a bit nerve-wracking and I did end up at significantly over the guide price and very close to my maximum, it was reassuring that I had found something suitable and it was a done deal. The price I paid seems cheap now.

Good luck.