Buying an acreage

Brandon Scott is a Sherwood Park & Edmonton based mortgage consultant and the author of a weekly column entitled Real Estate Solutions in the Sherwood Park News. This article was originally published on March 8, 2013

The fresh air, the wide open spaces, and the ability to get away from it all after a hard day’s work are just some of the comments you hear when talking to those that want to live outside the city.  What’s not to love about the idea of watching the sunset on your front porch with no traffic or city noise; it’s no wonder these types of properties are appealing to many buyers. If you are in the market for a property like this it’s a good idea to keep in mind there can be other factors to consider in regards to financing and property maintenance. Many lenders are only comfortable financing a property within a certain radius of a major city centre. For instance if a property is located more than fifty kilometers outside of our  serviced area they may use what’s known as a sliding scale and require you to have a greater down payment. Furthermore the lender may only provide financing based on the value of the house plus five to ten acres (each lender has different requirements). This can create the need for even more funds out of your pocket if as an example the property you are purchasing has twenty-five acres. If the lender is only valuing the property based on the house and a fraction of the land, you would then be required to make up the difference between that value and the actual purchase price which in some cases can be significant. But do not be disheartened, many people enjoy the acreage lifestyle and have great financing in place on their property. The goal here is to make sure before making an offer on an acreage that you have talked with your trusted advisor to ensure you are aware of the parameters on these types of properties so that there are no surprises. Next week we’ll highlight some of the property maintenance items you should be aware of before deciding if going rural is right for you. Download the current e-edition of the Sherwood Park News