Buying Raw Land

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Almost 10 acres in perfect setting - Beautiful Morgan County TN land at great price and owner financing available. Price: $45.000 Cash/Bank Finance or $50,000 with Owner Finance.

Acreage in Tennessee's still unspoiled Morgan County and at great terms. This Tennessee land is offered with owner financing- NO BANK QUALIFY: Contract for deed with $5,000 down, $475 a month for 12 years, 7.5% APR, $50,000 total sales price. Cash or bank financing, $45,000. This is land only. 9.3 beautiful acres facing the Cumberland Plateau. Surrounded by mature trees with pasture lands in the center, this perfect setting has a well, septic system, and electricity on site.

The land also has a creek running through it. It is very private. It is perfect for horses, to bring your own trailer, or build a home.

Contact owner

Above is the original ad for the property we bought that we came across last June (07') on EAST TENNESSEE LAND FOR SALE BY OWNER. It was a four hour trip to check it out from Atlanta, so one Sunday we drove up.

Buying a piece of raw land is not an easy process. Especially for something such as homesteading, where you're in it long-term, it's not just an investment on the side. It's difficult to figure out the exact spot on the globe where you want to permanently settle down. In our case we would have never guessed we'd end up in Tennessee. You have to be open-minded, let "fate" or whatever take its course, not get too attached to one area, and you need a lot of patience. Cash helps also.

The #1 thing of course to figure out is where you want to be. For us that was very difficult. We bounced all over the place. Southwestern Oregon is a mecca for back-to-the-landers, especially south of the Rogue River and west of Ashland. But it's difficult to find smaller parcels, they are expensive, there are restrictions, and like any place out west, it's rough country. Mild for its latitude, but still rough.

We'd spent years camping and traveling throughout New Mexico. Southwestern New Mexico is about as remote as it gets. We were fixated on this little town called Gila. The 500,000 acre Gila Wilderness is right behind it, the people are great, we stayed in a commune there for a while, Seeds of Change at one time grew their seeds there, it's got a lot of beautiful things going on. We were absolutely certain this is where we should buy. But as with anything out west, again it's difficult to find smaller, affordable properties (that aren't part of a subdivision, with its restrictions). And there's also the water issue. It's highly unlikely to find something affordable with year-round flowing water, drilling a well can be very deep and costly, and there are also water rights you have to look into, because the area is so dry. And if you're not a diehard desert-lover, or come from somewhere else (in our case we're from Pennsylvania), it can be difficult to adjust to living out there forever. Most available properties out there are barren, barren parcels, desert pavement, with a bush or two. We came to the conclusion that the best land in the Southwest is found in the wilderness areas, and those are free. You've just got to live like an Apache.

Florida was another option we seriously considered. The area south of Tallahassee is wonderful, with a million acres of forest, the best canoeing, a ton of wildlife, and perfect beaches. We dreamed of having a tropical garden, with figs, and olives, and avocadoes, and building a Mediterranean villa. And the advantage to looking for raw land to homestead in the East, is that you have thousands and thousands of small parcels to choose from, as the land was all cut up long ago. And just about any spot in the eastern U.S., due to its particular climate, can be turned into a paradise. And the pristine Florida aquifer is just beneath the surface. Some books say you can reach it by pounding a long pipe into the ground.

We drove down to look at two properties. One was two acres for 17k. From the photo it looked pretty nice, flat and open. But as obvious as it sounds, the key to buying raw land is to go and look at it. The more properties you look at, the better you know what you want, and don't want. You can't just daydream, and look at photos. The whole way to the two acre parcel looked great, it was scenic, an almost mountainous part of Florida, which we didn't know even existed. But as we got close the area took a turn for the worse. It was a vast desolate trailer park, the people were not just unfriendly (I got out to ask directions), they were chilling. And the land itself was sand covered in scrubby pines, where you couldn't see but could clearly hear all the people living in trailers behind you.

The next parcel was one acre for 12k, right at about our budget. As usual the area is beautiful, and well-kept, until you get right to the property (this was our experience with looking for raw land, over and over). The area got pretty trashy, and there was our flat acre off to the left. My wife didn't even want to bother getting out of the car, but when you go this far, it's good to at least get out and walk the property. Give it a chance.

And it was actually a very promising acre. It was a field that had been cleared a few years back, there were oaks in the back, it had a nice vibe. We could have done a lot with that acre. All the homesteading books tell you to try and get five acres minimum for living 100% self-sufficiently off your own land, but there's a lot you can do with one acre, that's open, and level, in a place like Florida. The downsides were how close and tight the neigborhood was, our neighbors to the left would be practically right on top of us. Sure we could build a fence, but we'd still hear each other. The immediate area also had a certain squalor to it, dogs barked constantly, and we decided to pass. Somebody'd dumped their dead dog off right in the middle of the property. We were also reconsidering Florida in general, with the bugs, and heat, and overall unfamiliarity.

The conclusion we came to after trying Florida was to stick to what we were used to, where we come from, the Appalachians, a place with four seasons. I had in my mind this image of a field, with a barn, and nothing around, silence. When I started looking through LAND AND FARM.COM, I came across some amazing finds. There were parcels in the 3k to 5k/acre range throughout Kentucky and Tennessee. We started to look more specifically at local sites for Tennessee, and my wife found EAST TENNESSEE LAND FOR SALE BY OWNER. The very first page had the "Almost ten acres in perfect setting. . . " Photos can be deceiving, and in fact, when it comes to buying raw land, I can guarantee you the photos will be deceiving. We checked out some properties in North Carolina where after standing on the land, and looking in all directions, you'd swear the photos had been airbrushed.

But this ad grabbed us for several reasons. That it had water and power on site, half was cleared (huge steps towards developing your raw land, as clearing and putting up power poles and drilling a well will cost several thousands). There was a flowing creek on it, and best of all it was owner-financed. Only 5 thousand down, and the place is ours. 10 acres!

The next step is to call the owner, which I did. Never bother looking at any property where you haven't verified with someone over the phone that the land is still available, it fits the description, and of course have a list of questions about things not covered in the ad which are important to you. Key things for us were information on the well, the creek, why he's selling it (he said he'd planned on building a cabin on it, because of its great views, but now has a baby coming, and there's a change of plans - as touching as this story is, never believe a seller, they'll say anything). I found out the creek only runs during the wet time of year, it is not year-round, which was a disappointment, but good to know. I had the seller mail me a copy of the plat (the county map showing all property boundaries and the parcel sizes around it). All the bordering properties were large acreage, which is ideal, for everybody has a lot of space, and development will be minimal.

The property seemed worth taking a look at, and the seller seemed reasonably credible. So we decided to run up there one Sunday morning. If only at the least to rule another area out.

Eastern Tennessee impressed us with its hardwoods and big rivers (very like Pennsylvania), and there was quite a lot of woods and empty land. The exit for the highway which went to Sunbright (where the land was) had signs for Frozen Head State Park, the Obed Wild and Scenic River, and the Big South Fork National Recreation Area. This was our kind of place.

The whole last stretch the area remained impressive, with large tracts of undeveloped land, mostly woods and hills, with great views, and even the rural land was very clean and mostly modest owner-built homes, rather than mobiles. The three-mile road to the property had just been paved with fresh asphalt, very convenient for trying to get places, instead of going down a bumpy dirt road. And it was very scenic. Finally the pavement ended, the road turned to dirt, and there was the driveway up to the right for the property. Another ideal scenario, the road in front of you is dirt, and goes nowhere, which means minimal traffic, yet the pavement is close when you want to go somewhere.

As soon as we crested a little hill the view blew us away, especially after so many years of looking at disappointing parcels. The barn that had been started was huge, the clearing stretched for acres and was loaded with plants and high grass, no barrenness here. And the trees were all hardwoods, wheras from the photo I figured they'd be pines. I much preferred hardwoods. Some big trees in the clearing that had been left were oaks. And the entire property had a southern exposure, which meant we'd stay nice and dry and could grow anything.

We walked the border of the property, checked out the creekbed, totally dry, but they were in the midst of a drought. I had a gut feeling about this place, as we walked the back of the clearing. Your instincts are everything. I then stumbled upon a huge patch of lowbush blueberry, covered in blueberries. They weren't ripe yet because it was only June, but it was a great find. I looked around and discovered blueberry everywhere, it covered the entire hillside.

The most incredible thing about the land was the total silence we experienced. We could not hear or see anyone. No house in view, nothing but trees. And because a full five acres had been cleared, the sky was ripped open. To have such a big view of the sky back east is unusual. No question, this property was it. That's how you need to feel about the land before you buy it. If you have reservations to start, those will only explode once you try and live on it.

We took a short drive down the dirt road and found tons of blackberry. Trivial things to the average land purchaser, but to us as homesteaders, it was important. It was another positive sign that we could survive out here.

The next step should have been to camp the night on the property, to at least experience 24 hours on it, and get a feel for the daily rhythm there. It's something you could probably easily get permission to do, as a buyer, and should do. However we did not. We felt so strongly about it, and had been desperate to find land for so long, we didn't want to push the envelope, and go looking for something negative. It was also very hot and dry, and several ticks had dropped from the sky and were crawling on us.

The other thing we should have done was go meet some neighbors. They can be an invaluable source of information about your property and the area, and who your neighbors are is very important, it's good to see what they're like. Just because you're out in the sticks doesn't mean your neighbors are going to grab a shotgun once you knock on the door. It's not really like that at all, and in fact country people are far more friendly and hospitable than the average city-dweller.

But we didn't do this either, we drove home. I was certain this was it, and my wife felt good about it also, but this was a big mortgage to take on, we hadn't planned on it, and the land was rough, the sun was hot, the ticks were a nuissance. She felt a little ambivalence maybe about homesteading. It's one thing to fantasize about it, but to take a piece of raw land, and develop it from the ground up, is hard, brutal work, you've got to be gung-ho and determined.

The next day I called the Morgan County Courthouse to find out as much as I could about the property. We've been following the advice of the authors of FINDING AND BUYING YOUR PLACE IN THE COUNTRY, a book I highly recommend. In there they tell you to call the courthouse and find out what the building codes are, and zoning, and any planning the county might have for the area. You wouldn't want some industry or commercial venture going in right behind you. I found out that Morgan County has no building codes at all, truly incredible. And when I asked about what kind of planning or development the county had for the area, the woman in the Building Department just laughed. No they had no planning whatsover for the area. This was great news.

I also called to get information about the well, how deep, when it was dug, etc. This information is always put on file with some government agency. I found out the well was dug recently, 2001, they had hit water at 60 feet, and dug it ultimately down to 120 feet. I looked up everything I could about Morgan County online. It was one of the least populated, and most depressed, counties in Tennessee, but that was great for us. I also found a woman's comment from Florida - she had just bought over 70 acres in Morgan County, and she was raving about how unbelievable this place is, no building codes, 4k to 5k an acre, mild climate, great people, a perfect place to farm and homestead. She was going to raise horses.

My wife and I discussed it for a while, went over and over it actually, then moved on to the next step - the offer. Instead of accepting somebody else's terms, she copied one of the contracts out of FINDING AND BUYING YOUR PLACE IN THE COUNTRY, and modified it a little, and filled it out. The big question was what to offer. We were in a bad position, according to the book. We were a) desperate, and b) attached. We both really wanted this piece of land. Who knows how many other offers he's received? What if we don't get it and are back to square one?

I came up with the offer of $39,500. My reasoning was this - if I go too low in the thirties, he won't accept it. This seller, though his story appeared to be true about having a child on the way, had several other properties in the Knoxville area he was selling via owner-financing. So this property was an investment for him. He could sit on it, possibly as long as he pleased. So I felt if I went down in the thirties he would dismiss it out of hand. I thought if I went as high as possble in the thirties, there was a chance he'd go for it and sign the contract. The reason why I wanted a three up front and not a four was bargaining leverage. I felt if I started in the thirties, and he counter-offered, he couldn't go too high in the fourties. It is sort of like a game of chess. You analyze all the possibilities, and make your move. We faxed the offer and waited. The waiting part is of course torture.

He did not accept our offer. But he did counter offer. He wanted $45,000 for it. This was pretty exciting. We were close. Then we went over and over whether we should just accept this, take it and run, or offer our own counter offer, which was risky. I wanted to close the deal and be done, who cares whether or not we pay an extra few grand, or 8%? But you have to remember it's like a game of chess, you have to analzye each person's position, and then make the most calculated move. You can't get all carried away with emotion. That will cost you. And not just in dollars. Some regret and a sense of feeling cheated may poison the whole transaction if later you come to feel it didn't go fairly.

We decided to counter offer. Our goal was to box him into a corner, where he had no possible counter offer. So this is what we did. We kept the same terms on the loan, of 35k, over 12 years, at 7.5% interest. But we upped our deposit to $7,500, instead of $5,000. The thinking here was that he might be in need of immediate cash, and this would be very tempting. By keeping the same loan terms we were showing we weren't interested in bargaining those issues, they were essentially non-negotiable. And by putting more money up front, we were actually reducing the amount we would ultimately pay for the property, because less interest. It was win-win, and it seemed to me he would have no other move but be forced to accept.

And he did. He faxed the contract signed, and called us to make sure we got it. We were actually on the way to the beach for a short vacation, so we didn't get the contract. But we were thrilled we'd got the property, so we decided to celebrate and take the kids to Disneyworld. We dropped a grand there, but overall it was a pretty good time.

When we returned we moved on to the next step - checking out the contingencies. We'd put two contingencies in the contract which would void it if they didn't check out. One was the title. My wife had arranged for a third party title company to go over the contract, investigate and insure the title, and take care of all the legal stuff. She'd written in to the contract that the seller would split the cost of this with us. So it ended up costing us each about $350. But you've got to protect yourself, especially in the case of owner-financing, and sort of do it by the book. Too much money's at stake. So as long as the title checked out as legitimate and the seller had no liens and the property had been fully paid off, that contingency was meant.

The other contingency was the water. We wanted to have a well inspection. We firstly wanted to make sure the well had water, if so how much, what quality, and what state was the pump in. If there were no water that would seriously devalue the property for us, and we would have to either alter or abandon our offer. The seller had given us 60 days to satisfy these contingencies.

I called around, and ended up hiring a guy who worked for a well company to go out and inspect it. His price was $180 and I thought reasonable. He'd drive out there and hook the pump up to a generator, monitor the flow, and do an analysis of the water quality.

He called me back and said he ran the water for an hour, it flowed at 12 gallons a minute, the pump worked fine. But he said the water had a slight sulfer odor to it (i.e. rotten eggs), and was very high in iron, it tasted like metal. He said these things were common for the area and could be removed through filtration. But the price on the filter? $1,800. This was a blow to us, and we reconsidered for a while. I wrote a short note to the seller telling them the results of our well inspection, and that we were not expecting this kind of cost, showing a little disappointment here. My hope was maybe they'd knock a little off the price for the cost of the filter, maybe come halfway. But they wrote back coolly that all the water in east Tennessee has sulfer and iron, and what do we want to do? It was obvious they were old pros at this, and weren't budging, as far as price. So I wrote back saying the contingencies were met, and let's set a date for closing and signing all the paperwork.

This was done a month later, and we didn't even have to go up there. The title company took care of everything, via fax and phone. The property was now officially ours. Now it was time to start working on it.

As a postscript to the above, when I was looking for the original ad for this property, I went to the website EAST TENNESSEE LAND FOR SALE BY OWNER and came across their page of testimonials. And half way down this is what I found:

Hello Ron
I just wanted to write a short note to say Thank You. I listed my property located in Sunbright TN back in the beginning of June. We are scheduled to close on the property August 6, 2007. We had several people contact us, and we had three people making offers, before we accepted an offer very close to our asking price. Your website Easttennland.com allowed us to sell our property very quickly. My wife and I thought it was very reasonably priced. Thank Thank you for telling us about your website.
Sincerely, Neil Whiticar

So that whole time we were negotiating with this guy and he had other offers! We were actually competing with other buyers! We had thought this property was going nowhere, that this area was dead in the water, that these sellers were desperate and would latch on to anything. It just goes to show you that land is always hot, and the prices keep escalating.

[For more info on buying rural property, see How To Buy Raw Land]