Mistakes to Avoid When Buying Land in Arkansas

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Mistakes to Avoid When Buying Land in Arkansas

Bart Waldon

With over 52,000 square miles spanning sprawling plains, timberlands, rugged highlands and lush wetland regions, Arkansas offers diverse land investment opportunities. However, navigating real estate deals here comes with unique locale-specific learning curves. Without proper due diligence regarding zoning constraints, usage rights, terrain analysis and zoning intricacies, land buyers risk overpaying, inheriting unwanted obligations or selecting unsuitable sites for aspirations. Fortunately, a bit of upfront homework in decoding property specifications can help investors secure promising acreage aligned to intentions while sidestepping headaches.

This guide covers key mistakes for prospective land buyers to avoid in Arkansas, ranging from lack of development research to incomplete title review. It also provides actionable steps investors can take to map out informed acquisition strategies with help from local real estate advisors. Leveraging these best practices helps set the stage for smooth transactions and simplified development processes over time.

Failing to Inspect Parcels Prior to Finalizing Deals

Among the most common missteps Arkansas land buyers make involves completing purchases without having stepped foot on acreage sites or viewed plots first-hand. While satellite imagery, contour maps and geography details offer helpful preliminary indicators, seeing and walking land areas prior to procurement proves instrumental in confirming true conditions tied to key valuation factors.

On-site inspections allow buyers to analyze critical qualities impacting property desirability, pricing and development costs like:

  • Total acreage - Towering trees or uneven terrain could indicate incorrect size listings
  • Flood risk - Signs of erosion patterns or drainage issues
  • Soil viability - Checking composition for agricultural or construction use
  • Access road quality - Assessing needed improvements for transport
  • Existing structures/encroachments - Inspecting for squatters or debris requiring removal
  • Views and vistas - Surveying aesthetics appeals from peak sites

Unless confirming these details through visits, buyers risk surprises sinking capital into needed fixes or restoration work after closing deals. Scheduling tours around various seasons also helps gauge differences in aesthetics and biology activity on sites.

Not Researching Past Site Usage and Designations

While sparkling new real estate listings for Arkansas land parcels rightfully capture buyer attention, past historical usages also warrant research to uncover any potential wait obligations tied to prior activity.

Common past land leverages that could necessitate disclosure or even remediation projects before developing sites include:

  • Mining facilities where equipment or hazardous material storage has led to soil contamination
  • Landfill zones where buried municipal waste requires monitoring and containment
  • Commercial factories with chemical runoff concerns into topsoil
  • Old service stations or industrial plants with possible ground pollution
  • Agricultural usage with pesticides or intensive livestock grazing

Fortunately, trusted environmental history searches from seasoned providers help buyers investigate previous parcel designations across decades to avoid unwelcome surprises. Reports also include risk levels and estimated costs tied to re-zoning or remediation needs before constructing projects on converted sites.

Selecting Parcels Not Zoned for Intended Use

Arkansas features diverse county and municipal zoning codes that dictate allowable land usage for categories spanning residential, commercial, industrial and agricultural activities. Without confirming a site's designated zoning fits proposed plans for either builds or value-added modifications like storage, parking lots or billboards, buyers may face denied permits stopping projects in their tracks.

Common zoning classification mistakes buyers make include:

  • Buying agricultural acreage intending housing or retail builds not permitted by codes
  • Selecting mixed use tracts restricted from industrial warehouse plans
  • Choosing residential land prohibited from light commercial custom remodels

Reviewing county GIS parcel data provides zoning district specifics like density allowances, height restrictions, floor area limits and conditional use constraints. Local Arkansas real estate attorneys also help survey codes to determine viable development eligibility across targeted sites.

Getting zoning right from the start prevents headaches later in entitlement processes or improvement endeavors down the road.

Failing to Research Utility Connection Needs

While raw land itself may seem reasonably priced, the processes to access needed utility connections could carry surprising costs if not properly researched beforehand.

Key utilities Arkansas land buyers must assess connectivity fees for early include:

  • Electric Power Access - New pole or transformer specs
  • Water Supply Access - Installation needs from main lines
  • Gas Line Access - Pipeline placement requirements
  • Sewage/Septic Access - Drainage field permits and configurations
  • Telecom Access - Extending fiber or cable service

Reputable civil engineering firms provide cost estimates for utility infrastructure based on parcel locations and builds. Builders must account for these expenses within project budgets from the outset when evaluating true land pricing.

Skipping Environmental Due Diligence Studies

Picturesque forested acreage spanning parts of Arkansas certainly proves alluring. However, land buyers targeting timbered sites need proper ecology studies to steer clear of protected zones or endangered species interference risking fines down the road.

Key environmental due diligence must-takes involve:

  • Wildlife Assessment Studies - Surveying for at-risk animals potentially onsite
  • Wetlands Delineation Testing - Checking for waterway marsh protections
  • Vegetation Audits - Cataloging crops or trees requiring special clearance
  • Runoff Analysis - Detailing watershed drainage implications from plans

State conservation departments help gauge habitat protections applicable across sites to avoid legal issues after purchasing plots if construction plans emerge. Checking these factors early allows for sharper asking price negotiations if complications surface.

Buying Without Title Insurance

Navigating ownership history and liens tied to Arkansas land parcels grows extremely intricate even for seasoned real estate attorneys given gaps in old deed records across rural counties. Without proper title insurance upon closing deals, buyers could inherit unwelcome obligations from past unpaid debts negatively impacting sites.

Common title defects buyers inherit without sufficient policy protection include:

  • Undisclosed heirs with partial ownership rights
  • Unknown tax debts levied on prior owners
  • Spotty early deed records showing contradictory claims
  • Easements/right-of-ways limiting build parameters

Title insurance provides critical coverage against defects impacting transferability. For a low one-time fee assessed at closing, policies offer lasting peace of mind for buyers should complications surface down the road regarding contested ownership interests or property liens.

Failing To Inspect Disclosure Paperwork

In Arkansas, state law mandates sellers provide detailed disclosures on property history to inform buyers around past issues impacting land quality. However, buyers often neglect thoroughly reviewing these materials allowing missed red flags or minimization of known defects.

Key details to scrutinize on mandatory seller disclosures include:

  • Past ownership names to check against title liens
  • Prior insurance claims indicating damage repairs needed
  • Updated listing details on zoning changes since purchased
  • Record of site disruptions like sinkholes or erosion issues

Checking disclosures allows buyers to investigate discrepancies, negotiate concessions if alarms surface and budget any remediation work necessary to maximize land prospects.

Declining Environmental Inspections

While not necessarily required by law, proactively ordering environmental inspections helps land buyers evaluate the true risks and liabilities tied to potentially contaminated sites. This includes land previously used for commercial activity now listed for sale.

Key environmental inspection checks suited for land sites involve testing:

  • Soil integrity for construction stability and contamination
  • Groundwater for impurities from chemical runoff
  • Asbestos presence in existing structures slated for demolition
  • Radon emissions levels across the property

If contamination surfaces, buyers can then negotiate discounted pricing or settlement credit to handle future remediation expenses involved in clean up or restoration work down the road.

Overlooking Property Tax Implications

While quoted sale prices seem straightforward for land parcels, Arkansas property taxes also warrant review to calculate carrying costs buyers will shoulder annually that impact deal value.

Key property tax factors influencing land in Arkansas span:

  • Millage Rates by County - Complex tax formulas based on use types
  • Reappraisal Timelines - Occurring every 3-5 years typically
  • Special Assessment Fees - Charges added for development infrastructure
  • Tax Exemptions - Agricultural or conservation lands could qualify

Land investment calculators help provide reasonable property tax estimates to determine ROI timespans and improve deal analysis.

Final Thoughts

While Arkansas offers alluring land opportunities across diverse terrains, allowing due diligence steps to slip could saddle buyers with unwanted headaches or expenses down the road. Working with experienced local partners for site assessments, records analysis and project planning provides vital perspective in navigating nuances all savvy land investors should appreciate before sealing promising deals. Taking the time upfront helps buyers verify parcel alignments to their needs and avoid costly missteps.

Frequently Asked Questions (FAQs)

What is the average price per acre for land in Arkansas?

According to recent surveys by the University of Arkansas, the average per-acre sales price for land in Arkansas is approximately $2,500. However prices vary greatly based on factors like parcel acreage, county location, zoning and infrastructure access.

What regions of Arkansas are seeing the fastest land price increases in recent years?

Over the past five years, Northwest Arkansas has experienced the steepest land valuation gains in the state at over 22% growth. Central Arkansas land prices also climbed nearly 15% thanks to Little Rock metro development.

What are the most common land title issues that could surface in Arkansas deals?

Common title defects include previous ownership claims from heirs not properly documented, unpaid property tax letters tied to prior owners, easements or right-of-ways limiting intended usage, and conflicts between very old deed records.

Should potential environmental issues influence negotiations on price for land purchases in Arkansas?

Yes, suspected environmental factors like former commercial activity, buried waste, runoff concerns or needed ecology protections should warrant requesting pricing concessions during negotiations to offset future remediation expenses.

What are the average property tax rates on land parcels in Arkansas?

Depending on specific county and prior use classifications, property tax rates on Arkansas land range anywhere from 0.5% to just over 1% of assessed valuations on average. This amounts to $20 - $40 annually per $1,000 in assessed land value.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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