Buying an acreage is not without its complications - below are Kelly Grant's top ten important risks that must be successfully negotiated and mitigated by any Buyer (using an experienced Buyer REALTOR®) before finalizing an acreage purchase:
(1). Is the applicable GST on land included in the purchase price and the responsibility of the Seller once money is received?
(2). Do you know the relevant County Bylaws and Zoning Restrictions for this parcel as well as nearby and adjacent parcels (including: road access rights, utility restrictions, caveats, encumbrances, leases, and outstanding utility debts and amortizations to the property)?
(3). If you are in a position of being forced to sell in the future (i.e. due to financially or other reasons), will there be enough acreage Buyer demand in the area to be able to sell fairly quickly, allowing you to regain as much equity as possible (i.e. amount of 'asset liquidity')?
(4). Do you require a meeting with the Seller before closing to demonstrate operation and maintenance of all property aspects including wells, septics, equipment, land boundaries, access points, etc.?
(5). Regarding septic tanks: has the septic tank been inspected; does the septic tank need cleaning; is a new septic tank pump required; do you know the discharge method for the septic tank for acceptable means of disposal; and is the septic tank lid at least 6 inches below ground to keep the heat contained?
(6). Regarding drilled wells: has the well been tested; is the well currently operational; has the well yield been tested; does the well need to be ’shocked’ before use; have you reviewed the well driller’s report containing well sources and volume restrictions available by contacting Alberta Environment (Groundwater); does a new well need to be drilled (along with an iron filter, water softener, testing and pumping equipment, etc.) at a cost of tens of thousands of dollars or more?
(7). Does the water (as per usual) require quality and chemical testing for irrigation, bathing, and / or potability or will you be trucking in water for these uses?
(8). If buying the land to build a house or other structure in the future, have you conducted or obtained a geotechnical soils engineering report (in consultation with a builder and / or earthwork, utilties, and foundation contractors) to make sure you fully understand the cost of construction on this parcel? Problems such as but not limited to rock formations, high moisture content, or unstable soil or slopes can cause extra unforeseen construction costs.
(9). Do you have a plan to maintain proper levels of landscaping and snow removal?
(10). Do you know distances to municipalities, schools, shopping, emergency services, etc. required on every commute?
In summary, there are definitely many benefits to buying a rural property including but not limited to private lifestyle; a myriad of recreation options; ample space for storing animals; planting crops; parking vehicles / equipment; and erecting structures. However, acreage buyers must be aware of the risks above and understand the ramifications and significance of an important fact: for new acreage buyers in Alberta who have never lived on an acreage or farm before, the average turnover is under two years from the date of purchase predominantly due to the fact that Buyers did not fully anticipate or appreciate the magnitude of lifestyle changes (and variety of costs) required for living on an acreage. Suggestion: before buying an acreage, ask many questions and discuss the above considerations at length with your REALTOR®.
[Article written and ©2009, ©2020 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at MaxWell POLARIS in Edmonton, AB]
Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you will be selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to SOLD@KellyGrant.ca to schedule a confidential appointment.