How To Protect Yourself When Buying a Homestead Property
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Buying a homestead in the United States is very different from buying a standard house. You are not just buying a home. You may also be buying land, a private well, septic system, barns, fencing, access roads, timber, water rights and other property rights.
A beautiful rural property can quickly become an expensive mistake if you discover that livestock are prohibited, the well is contaminated, the septic system is failing or you do not have clear legal access to part of the property.
Here is what to check at each stage of buying a homestead.
Important: Property, zoning, water and mineral laws vary by state, county and sometimes township. For important legal questions, use a local real estate attorney who understands rural property.
1. Decide What You Need Before Looking
Write down what you actually want to do on the property.
Consider:
- Chickens or livestock
- Vegetable gardens
- Fruit trees
- Greenhouses
- Hunting
- Firewood
- Barns and workshops
- Additional homes or cabins
- Solar panels
- Farm stand or home business
- RV or tiny-home use
This matters because a property can look perfect but legally prevent the activities you bought it for.
2. Research Local Zoning
Before making an offer, contact the county, township or local planning department.
Ask whether you can:
- Keep chickens, goats, pigs, cattle or horses
- Build additional barns or sheds
- Install a greenhouse
- Build another dwelling
- Operate a small farm business
- Sell produce
- Live in an RV temporarily
- Build a tiny home
Never assume that rural land automatically gives you permission to farm or keep animals.
Also obtain copies of any HOA rules, deed restrictions and restrictive covenants.
3. Make Sure You Can Finance the Property
Rural properties can sometimes be harder to finance, particularly if they contain large amounts of acreage, unusual buildings or agricultural uses.
Speak to a lender familiar with rural properties before making offers.
USDA Rural Development also operates home-loan programs for qualifying buyers purchasing eligible rural properties.
USDA Rural Development Home Loan Programs
4. Walk the Entire Property
Do not spend all your viewing time inside the farmhouse.
Walk as much of the land as possible and look for:
- Standing water
- Poor drainage
- Erosion
- Steep or unusable land
- Dead or dangerous trees
- Old dumping areas
- Abandoned vehicles or machinery
- Fuel tanks
- Damaged fencing
- Flooding signs
- Neighboring industrial activity
- Power lines and pipelines
If possible, view the property after heavy rain.
The listing might advertise 10 acres, but that does not necessarily mean all 10 acres are usable.
5. Check the Soil
If you plan to grow food, establish pasture or plant an orchard, investigate the soil before buying.
The USDA’s free Web Soil Survey lets you research soil types and characteristics for specific areas. USDA describes it as its official source of current soil survey information, although some uses still require an onsite investigation.
For serious growing plans, consider a physical soil test for pH, nutrients, organic matter and possible contamination.
6. Protect Yourself in the Purchase Contract
Do not remove important protections simply because you are worried about losing the property.
Depending on local law and your contract, discuss contingencies covering:
- Financing
- Appraisal
- Home inspection
- Well inspection
- Water testing
- Septic inspection
- Survey
- Title review
Have a local real estate attorney review unusual contracts, easements, mineral rights, water rights or complicated rural properties.
The American Bar Association has a directory for finding state and local lawyer referral services.
American Bar Association Lawyer Referral Directory
People who qualify for civil legal aid can also search for help through the Legal Services Corporation, which funds legal-aid organizations throughout the United States.
7. Get a Full Property Inspection
Hire an independent home inspector and pay particular attention to older rural properties.
Check:
- Foundation
- Roof
- Structure
- Electrical wiring
- Plumbing
- Heating
- Chimneys and wood stoves
- Basement or crawlspace
- Moisture
- Termites
- Drainage
- Outbuildings
If the inspector identifies a specialist problem, bring in the appropriate professional before your inspection period ends.
8. Inspect and Test the Well
Clear water does not automatically mean safe water.
EPA says private wells generally are not regulated under the federal Safe Drinking Water Act in the same way public systems are, so owners carry much of the responsibility for checking their water.
Find out:
- Well depth
- Well age
- Pump age
- Flow or yield
- Maintenance history
- Whether it has ever run dry
Have the water professionally tested. EPA recommends routine testing for total coliform bacteria, nitrates, total dissolved solids and pH, plus additional contaminants where local conditions justify it.
9. Inspect the Septic System
A failed septic system can become a major unexpected expense.
Ask for:
- Installation records
- Permits
- System age
- Pumping history
- Repair records
- Tank location
- Drain-field location
Have the system professionally inspected before buying. EPA specifically provides a guide for people buying homes with septic systems and recommends inspection before purchase.
EPA Guide for Homebuyers With Septic Systems
Also find out whether there is suitable land available for a replacement drain field if the current system eventually fails.
10. Get a Survey and Confirm Legal Access
Never assume that existing fences mark the legal property boundary.
A survey can identify:
- Boundary lines
- Property corners
- Acreage
- Easements
- Encroachments
- Buildings crossing boundaries
- Driveway problems
Legal road access is especially important with rural properties.
If your driveway crosses somebody else’s property, make sure a recorded easement gives you legal access.
Also establish who maintains any private road and who pays for repairs or snow removal.
11. Investigate Easements and Property Rights
Find out whether other people or companies have rights over the land.
Possible easements include:
- Shared driveways
- Utility lines
- Pipelines
- Drainage
- Neighbor access
- Conservation restrictions
Do not just confirm that an easement exists. Find out exactly where it runs and what it allows.
12. Check Water and Mineral Rights
Owning land containing a creek, pond or well does not automatically mean you have unlimited rights to use the water.
Water law varies greatly between states, particularly in western states.
If water is important to your homestead plans, find out:
- What water rights transfer
- Whether those rights are recorded
- Whether irrigation rights exist
- Whether groundwater pumping is restricted
- Whether water can legally be removed from a creek or river
Also investigate mineral rights.
Someone else may potentially own oil, gas, coal or other mineral rights beneath land you own.
Have unclear water or mineral rights reviewed by a local real estate attorney before closing.
13. Check Flood and Natural Hazard Risk
Look up the property using FEMA’s official flood mapping system.
The FEMA Flood Map Service Center is the official public source for National Flood Insurance Program flood-hazard information.
Depending on the location, also investigate:
- Wildfires
- Hurricanes
- Tornadoes
- Drought
- Landslides
- Earthquakes
Get an insurance quote before closing. Do not wait until after purchasing to discover that the property is difficult or expensive to insure.
14. Check Utilities and Internet
Confirm what is actually available at the property.
Check:
- Electricity
- Internet
- Cellphone signal
- Propane delivery
- Heating oil
- Trash collection
- Mail delivery
- Road access during winter
If you work from home, test the cellphone signal yourself and ask the seller which internet provider they currently use.
15. Inspect Barns and Other Buildings
Do not assume barns and workshops are automatically valuable extras.
Check:
- Roof condition
- Structural supports
- Foundations
- Rot
- Termites
- Electrical wiring
- Water supply
- Drainage
Also make sure important buildings are located legally within the property’s boundaries.
16. Check the Title
A title search can reveal problems such as:
- Liens
- Unpaid taxes
- Ownership disputes
- Easements
- Claims against the property
Consider owner’s title insurance as well.
The Consumer Financial Protection Bureau explains that owner’s title insurance can protect a homeowner if somebody later makes a claim against the property’s title based on something that existed before the purchase.
CFPB Guide to Owner’s Title Insurance
17. Renegotiate or Walk Away
Use your inspections and searches before the contract deadlines expire.
Depending on your agreement, problems may give you an opportunity to request repairs, credits or a lower price.
Some problems can be repaired.
A roof can be replaced. A pump can be replaced. Fencing can be repaired.
Other problems can completely defeat the purpose of buying the homestead.
Be especially cautious about:
- No legal access
- Serious title problems
- Unusable water
- Failed septic with no replacement area
- Prohibited livestock
- Major flooding
- Missing water rights
- Serious contamination
Do not be afraid to walk away from the wrong property.
18. Review Everything Before Closing
Before closing, check:
- Final purchase price
- Mortgage terms
- Property taxes
- Insurance
- Seller credits
- Repairs
- Title documents
- Survey
- Included equipment
For most covered mortgages, your Closing Disclosure must be provided at least three business days before closing so you have time to review the final terms.
Do a final walk-through and confirm that agreed repairs were completed and anything included in the sale is still there.
Be especially careful with wire transfers. Independently verify closing payment instructions with your title company, attorney or settlement agent before sending money.
The Most Important Homestead Checks
Before buying any homestead, make sure you can answer these questions:
Can I legally do what I want with the land?
Is there enough safe and reliable water?
Is the septic system working?
Do I have permanent legal access?
Are the property boundaries clear?
Is enough of the land actually usable?
What easements affect the property?
What water and mineral rights am I buying?
Is the property insurable?
Is the title clear?
A homestead should give you more freedom, not leave you trapped with expensive problems and restrictions.
Spend money on inspections, surveys and professional advice before closing. It is far cheaper to discover a serious problem before you own the property than afterward.
