Buying Land and Acreage in North Texas: What Changes

Buying land is not a simpler version of buying a house. It is a different transaction with a different failure mode, and almost everything that goes wrong is discoverable in advance.

It Is a Different Transaction

On a suburban lot, most of the important questions have already been answered by somebody else:

• The lot is platted, with known boundaries and dedicated street access
• Water, sewer and power are at the property line
• Zoning tells you what may be built
• A house already stands on it, proving it can be done

On acreage, none of those are given. Each is a question, and any one of them can make a parcel unbuildable or far more expensive than the price suggests.

The Survey Is Not Optional

Order a new survey. Every time. On land, the survey is where you learn things that exist nowhere else.

• The actual acreage, which frequently differs from what a listing says.
• Easements, including utility, pipeline, drainage and access. A pipeline easement can cross a large share of a tract and constrain where you build.
• Legal access and road frontage.This determines whether you can build at all and whether you would depend on somebody else’s driveway.
• Where fences actually sit relative to the deed lines, which on old rural tracts can be off by a meaningful margin.
• Floodplain boundaries relative to your intended building site.

Read it with your agent during the option period, and cross-reference it against Schedule B of the title commitment, which lists the recorded exceptions including easements and mineral reservations. How surveys work in a Texas contract, and what Schedule B contains.

Water In, Waste Out

The two questions that decide whether a parcel is usable.

Water in.Is the property served by a public supply or a rural water district, and if so is there capacity and what does a meter cost? Or is it on a well, in which case: depth, yield, water quality, age and condition of the equipment. Do not assume a neighbour’s well predicts yours.

There is also a disclosure dimension. A form covering groundwater and surface water rights is now part of the Texas residential disclosure package, and on land with a well, a pond or a creek it deserves real attention rather than a glance. What the disclosure covers.

Waste out. Most acreage in North Texas is on septic rather than municipal sewer. If a system exists, get a dedicated septic inspection and check the permit history with the county. If one does not, the question is whether the soil will support a conventional system or whether an aerobic system is required, which is more expensive to install and carries ongoing maintenance obligations.

Expansive clay, which shapes so much else about building here, is directly relevant to septic feasibility. Get a soil evaluation rather than an assurance.

Access, Utilities and Whether You Can Build

1. Legal access. Frontage on a public road, or a recorded easement. A driveway that has always been used is not the same as a right to use it.
2. Electricity. How far is the nearest service, and what does the utility charge to extend it? A long run can cost more than a large part of the land.
3. Gas, internet and phone. Rural internet in particular is worth verifying rather than assuming, especially if you work from home.
4. Who has jurisdiction.Inside a city, its zoning applies. Outside, county rules apply and they are generally lighter, but a city’s extraterritorial jurisdiction can still impose subdivision requirements.
5. Deed restrictions. Rural tracts frequently carry restrictions on use, structures, manufactured housing and animals, and they are enforceable regardless of what the county permits.
6. Floodplain. Check the FEMA map for the parcel and walk it after rain. Building in a floodplain is possible and it changes cost, insurance and permitting.

Ag Valuation and the Rollback

Much North Texas farmland carries an agricultural valuation, which taxes it on productive capacity rather than market value. On land in the path of growth, the difference between the two figures can be very large.

Three things to establish before you offer:

• Does the parcel currently carry the valuation, and on what basis?
• Can you maintain the qualifying use? If you can, the tax saving continues. If you cannot, your bill will be assessed on market value.
• Who bears the rollback? Changing to a non-qualifying use can trigger an additional assessment recovering the difference for a look-back period, plus interest. Address it in the contract explicitly rather than assuming.

How ag valuation and the rollback actually work, and the Comptroller’s agricultural and timber valuation guidance for the qualification rules the appraisal district will apply.

Financing Land Is Harder

Raw land does not qualify for the mortgage products you are used to, and this surprises buyers who assumed a land purchase would be simpler.

• Larger down payments, higher rates and shorter terms than a home mortgage.
• Different lenders. Local banks and farm credit institutions rather than the national mortgage market, because these loans are generally held rather than sold.
• Construction financing is a separate product with its own draw schedule, inspections and timeline if you intend to build.
• Appraisal is harder on unique parcels with few comparables, which can affect the loan and the timeline.
• Texas veterans should look at the Veterans Land Board land loan programme, which has no real equivalent in other states. The wider veteran benefits.

Talk to a land lender before you write an offer, not after.

Where the Acreage Is

Broadly three categories in North Texas, and they behave very differently:

• Large-lot residential inside a city, where zoning mandates acre-plus lots. Lucas requires a one-acre minimum and up to six acres in its agricultural district; Fairview sets Ranch Estate minimums from one to three acres. These are residential purchases with acreage diligence attached.
• Rural tracts at the growth edge, east and north of the metro. Cheaper, more variable, and the place where access, utilities and ag valuation questions bite hardest. Farmersville and the eastern corridor.
• Land held for future development. A different exercise again, priced on what it might become rather than on what it is, and it needs a view on the path of growth and a long holding period.

Whichever category, the discipline is the same: verify access, water, waste, easements, floodplain and tax status before your option period ends. Every one of them is knowable, and every one of them has stopped a purchase that looked straightforward.