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Archive for the ‘Articles’ Category

Why Buy Land Now?

Tuesday, September 23rd, 2008

Buy low and sell high. This advice is so basic that even first-time investors understand it without being told. Whether you are keeping your land to sell later, or buying it as a site for your dream home, the best time to buy is when prices are low.

Although historically land values rise at a slow but steady pace, every form of investment has its ups and downs. Rising interest rates result in home foreclosures which lead to people getting scared and selling their real estate investments, often at undervalued prices. Savvy investors see this trend and begin to snap up terrific land deals, which causes prices to rise again, higher then they were before the initial fall. It is a cycle that is repeated over and over again. But through all the cycles, land values do tend to rise over time. Historically, most land values will double in the course of 10 years.

This slow but steady rise is one reason why real estate investment is so popular with long-term investors: people who want as much of a guarantee as they can get that their investment will remain secure. In his article of November 16, 2007, Jim Jubak of MSN Money had this to say: “Land is a particularly attractive investment for investors looking for long-lived assets to match long-lived obligations. That’s a group that includes all of the world’s pension funds, the entire insurance industry, and the new sovereign investment funds set up by Russia, China and other developing economies with big foreign-exchange balances to invest. The group also includes anybody – yours truly for example – who’s planning for a retirement 10 years or more away and that, we all hope, is likely to stretch on for a decade or two or three.”

During times of economic uncertainty, many people look to the security that land investment represents. As long as the property is well researched, there is very little risk in land investment. As America’s population grows and spreads out, land is something that everyone wants and there is only so much to go around.

Robert Agathon, Regional Vice President of Spectrus Real Estate Group talked on this point in an article for Office and Commercial Magazine, “As long as growth occurs, buying a piece of land in the path of growth insulates owners, at least partially, from real estate market ups and downs.” He also put the same thought another way: “As long as a piece of land exists in the path of growth, there will always be a demand for it.”

If you have decided that land investment is right for you, the best time to buy is when prices are down. Now is the time when you can find truly exceptional deals and make the most out of the money you spend.

Articles Cited:

“Land Ho! Now’s the Time to Buy” by Jim Jubak. MSN Money 11/16/2007 http://articles.moneycentral.msn.com/Investing/JubaksJournal/LandHoNowsTheTimeToBuy.aspx

“The Benefits of Land as a Real Estate Investment” by Robert Agathon, Regional Vice President of Spectrus Real Estate Group, Office & Commercial Magazine for North Texas Region, Volume 2, Winter 2000 http://www.spectrusgroup.com/docs/benefits_of_land_r_agathon.pdf

What is a Land Auction?

Wednesday, July 30th, 2008
A land auction is the process of buying or selling parcels of land, property by offering them up for a bid. The highest bidder, so to speak. With auctionacres.com there is no need to attend a heavily crowded auction hall; our land auctions are done from the comfort and privacy of your own home and on your own time. There are few companies who make it so simple and our site is designed to be user friendly. In this day and age few things will make for a better investment than real estate, if any and if you are like so many hard working folks out there, you can’t afford to plunk down hundreds of thousands of dollars on homes to rent or “flip”. There are other options for you. Our parcels for land auction are tremendous opportunities for a new investor to begin building their real estate portfolio for many reasons. There are parcels included in auctionacres land auctions that have seen excellent growth in economy and population as well as being affordable. There are three main reasons buying land is such a great investment.First off, the law of supply and demand plays a big part. The less of something there is the more demand there is for it. With the population rising by more than 11% every year, it is no wonder the need for more land is at an all time high. This need will never disappear as the masses grow in leaps and bounds.

The second important reason is leverage. With this you can pay a down payment for a property that will no doubt increase in value. With some land auction parcels you may pay five hundred dollars down for a property that is worth more than ten thousand. A bank or loan institution is more apt to loan money for a property that will increase in value versus something that has only minimal chances to do so.

The third and most important reason for land investment is that with so much market volatility home and land will not decrease in value. At auctionacres.com we give our customers a great chance to positively increase an investment portfolio by offering incredible wholesale land auction prices. With that opportunity our customers can buy low and sell high! Let us assist you with your purchase through one of our land auctions. Find the property land auction you are interested in and start your investment ball rolling at auctionacres.com today.


Quotes About Land & Real Estate

Wednesday, July 2nd, 2008
They aren’t making any more land. It’s a simple rule of supply and demand. Property prices continue to increase as more people become aware of the value of land as an investment. If you are tired of overcrowded city living maybe it is time to get a few acres to call your own. Here are just a few quotes about the value of land as an investment and as peace of mind.”Ninety percent of all millionaires become so through owning real estate.”
- Andrew Carnegie

“The major fortunes in America have been made in land.”
- John D. Rockefeller

“I would give a thousand furlongs of sea for an acre of barren ground.”
- Shakespeare

“The small landholders are the most precious part of a state.”
- Thomas Jefferson

“He is not a full man who does not own a piece of land.”
- Hebrew Proverb

“A man complained that [on] his way home to dinner he had every day to pass through that long field of his neighbor’s. I advised him to buy it, and it would never seem long again.”
- Ralph Waldo Emerson

“The best investment on earth is earth.”
- Louis Glickman

“It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.”
- Anthony Trollope

“My own recipe for world peace is a bit of land for everyone.”
- Gladys Taber

“There have been few things in my life which have had a more genial effect on my mind than the possession of a piece of land.”
- Harriet Martineau

The History of Land Ownership in America

Wednesday, July 2nd, 2008
Britain’s exploration into the New World began in 1585 with the expedition of Sir Walter Raleigh. Over a period of 200 years from that early settlement, the British left us many land records in the colonies which eventually became our early states. In the early years, the British granted charters to large land companies, which were essentially comprised of wealthy land speculators who resided in England. These land companies had the authority to issue land grants to those individuals who were loyal to the crown. The crown ultimately controlled all of the lands in these huge charters, with the land companies acting as agents of the crown. Some of the more famous of these land companies were the London Company, Massachusetts Bay Company, Plymouth Company, Virginia Company and others.What types of records are available from this early British period? Probably the most valuable for the genealogist are crown grants and proprietor records. A proprietorship was responsible for the granting of lands from the charter, as agent for the charter (and therefore, for the crown). When these disbursements of land were made, the land itself was laid out in descriptive form in much the same way as later deeds, with landmarks and other prominent identifying data. Many of these records survive in one form or another, whether they be patents, surveys, warrants, or in some other form, and have been microfilmed and are available from various resource centers.

In the Revolutionary War, the United States confiscated lands belonging to those that were felt to be loyal to the British government. The British government tried to compensate the loyalists for their losses, and, in 1783, the British established the American Claims Commission to administer the claims.

Moving now to Spain, we know that it was the first foreign nation to claim land ownership in the North American continent. By the late 1600’s, Spain laid claim to much of what would become the central and southwestern United States, as well as parts of Texas, New Mexico, California and Florida.

Beginning in 1763, Spain began keeping careful records of its land transactions, with several copies made of each document, one of which was sent to the Spanish archives in Seville.

The French held a large amount of territory in North America, which underwent a series of transfers between foreign governments over the years, but we are familiar with it as “The Louisiana Purchase”. The Superior Council Records are the primary source of information on the French land granting practices. This collection holds everything from mortgages to marriage contracts, civil and land suits, and other valuable information. The coverage of these records is restricted primarily to the areas that we know today as Louisiana.

Mexico, by 1821, claimed lands in the present states of Texas, Louisiana, New Mexico, Colorado, Arizona, Nevada, California and Utah. The Mexicans, especially in Texas, were prolific in granting lands, often in the form of a rancho, which was a grant over 1000 acres. They also used the headright system in Texas and in California. In Texas, references are made to empressario grants, which were large tracts given to land speculators to colonize entire towns.

This brings us to the point in time at which the United States came into existence. In the early days of the United States, the Government gave out Federal Patents to settlers who wanted to homestead a plot of earth. All land records in the United States now begin with the Patents which were given to the first land owners. It is possible to trace the ownership of any parcel of real estate all the way back to the time when the Government owned it. These land records are the basis for property ownership in the United States.

Units of Measure Which are Used in Real Estate

Wednesday, July 2nd, 2008
This page is simply a list of different sizes and distances which are commonly used in real estate.

  • One acre = 43,560 square feet, or 4,840 square yards
  • One acre = 4,033 m2
  • One mile = 5,280 feet
  • One square mile = 640 acres
  • One section = one square mile
  • One township contains 36 sections
  • One hectare (for those on the metric system) = 10,000 meters squared (2.47 acres)

How to determine the number of acres if you know the dimensions of a rectangular property:

Whenever we sell a parcel of land, we will always tell you how many acres you’re buying. But sometimes our buyers want to figure it out on their own. Here’s how you can do it. Let’s say you’re buying a rectangular property which is 330′ on two sides and 660′ on the two long sides. You would multiply the lengh times the width, and then divide that number by 43,560 (the number of square feet in an acre). Let’s try it…

330 feet x 660 feet = 217,800 square feet
217,800 square feet divided by 43,560 = 5
So, your 330′x 660′ property is 5 acres.

Types of Deeds Used in Real Estate

Wednesday, July 2nd, 2008
There are many different types of Deeds which can be used to convey real estate. Many of our buyers, especially buyers who have previously owned real estate, want to know what type of deed we use to grant ownership of property to you, the buyer. I’ll explain this in detail, but I’d also like to discuss several other types of Deeds, and the advantages and disadvantages of each.

Warranty Deed

The Warranty Deed is the most common type of Deed used in Arizona because it offers the best protection to the buyer. In Oregon, Warranty Deeds are also commonly used. In California, Warranty Deeds are also used, but they are uncommon. The closest equivalent to a Warranty Deed in California is a Grant Deed, but in this discussion I will use Warranty Deed to also mean Grant Deed.

The Warranty Deed contains three warranties. These warranties are promises that the seller makes to the buyer regarding the condition of the title to the property.

The first promise is the Covenant of Seisin. By the Covenant of Seisin the seller warrants that he or she actually owns the property and has the right to sell it.

The second promise is the Covenant Against Encumbrances. Like the name implies, this is the seller’s promise that the property is free and clear of any encumbrances (liens, loans, mortgages, taxes, etc…).

The third promise is the Covenant of Quiet Enjoyment. This obligates the seller to defend the title against any claims as of the moment the deed is delivered to the buyer. In other words, if a third party appears two years after the warranty deed has been delivered to the buyer, and claims to have an interest in the property, the seller is required to defend the title which was given to the buyer.

We always use Warranty Deeds to convey land to our buyers when the land is paid in full. Remember, when you purchase property, always insist on obtaining a Warranty Deed when the property is paid off!

Bargain and Sale Deed

A Bargain and Sale Deed is a much weaker instrument than a Warranty Deed. When a seller uses a Bargain and Sale Deed, the buyer does not get any of the three covenants that a Warranty Deed conveys. In addition, the seller is under no obligation to defend the title.

Quitclaim Deed

The third and final type of commonly used Deeds is a Quitclaim Deed. This is, without question, the weakest instrument one could use to convey property. Where a Warranty Deed guarantees that the seller owns the property, and is selling it to a buyer, and will defend the title and give the three promises, the Quitclaim Deed contains none of these guarantees.

Basically, a Quitclaim Deed states — IF the seller has an interest in the property, they are giving it to the buyer. Notice the word IF. In other words, “if it turns out that I have an ownership in this property, then I’m giving whatever interest I may have to you, Ms. Buyer.” It would be perfectly legal for me to give you a Quitclaim Deed to the White House — if I have an interest in it, I’m giving it to you. There are no guarantees with a Quitclaim Deed, and the seller is making no promises. Obviously, we never use Quitclaim Deeds to convey any of our land parcels. It just doesn’t give the buyer any security.

Be sure to seek legal advise if you have questions about the different types of deeds used in real estate transactions.

Understanding the Parcel Numbering System

Wednesday, July 2nd, 2008
Most counties use a numbering system to identify parcels for tax purposes. In Arizona, the Assessor’s Parcel Number (APN) refers to the map book number and acts as the index for researching parcel information. Information is available for public viewing in most County Assessor’s Offices and Recorder’s Offices.The Parcel Number usually consists of three parts. For example, APN 222-446-88 would mean Assessor’s Book 222, Page 44 and Block 6 of that page, and parcel 88 of that block.

How to Locate Parcels

If street names are shown on the Plat Map, use the street index guide of another larger area map to locate the parcel.

If no street names are present, use the Township and Range numbers to locate the parcel.

The United States is divided into a large grid pattern of Townships and Ranges, approximately six miles wide. Each Township and Range intersection is comprised of 36 Sections of land. A single Section is one square mile in size.

Refer to the legend of another general area map to identify its Section, Township and Range markings. For example, N. 1/2 , Sec. 12, T.4S, R2E across the top of a Plat Map would mean the North Half of Section 12, Township 4 South, Range 2 East. Refer to the legend of another general area map to identify corresponding Section, Township and Range markings.

To obtain a variety of maps you may want to contact the counties’ Assessor’s Office and Planning Departments. These offices can help you find property information. You may also consider calling a title company to find more information about the land you are interested in acquiring. There are also many locations online that may help to determine more information on properties. The United States Department of the Interior, Geological Survey (U.S.G.S.) maps cover the entire country and come in several different scales. You can find many of these maps at local retail stores. Visit your local camping outlet, map dealer or book store.

The Rising Cost of Real Estate

Wednesday, July 2nd, 2008
The fact that the price of real estate is constantly on the rise is not really a surprise to anyone, is it? After all, everyone knows that they stopped making land a long time ago. In elementary school, we learned about the famous Law of Supply and Demand. As the supply shrinks, the demand always increases. Because the supply has been getting smaller and smaller, since the dawn of time, it makes perfect sense that the demand has been increasing significantly.As a rule of thumb, the price of real estate doubles every 10 years. So if you buy land today, for $10,000, it’ll be worth about $20,000 ten years from now. Again, this is a rule of thumb, but historically it has proven to be accurate.

One of the major reasons for the rising cost of real estate is the growth of our world population. Take Phoenix, Arizona, for example. In 1940, the population was a small 186,000. By 1994, the population had reached over 1.5 Million. Las Vegas, Nevada, is another fast-growing area. Today, the population is nearly 1.1 Million, up from just 460,000 twenty years ago. Yes, the population more than doubled in twenty years!

You don’t have to look very far to see the effects of rising land prices. How many times have you talked to an old timer who said to you “Twenty years ago, I had the chance to buy that place for only $32,000. And they just sold it for $250,000….” These aren’t rare circumstances. They’re normal, common, everyday events.

In the San Francisco Bay Area, demand for new houses has sent land prices skyrocketing as high as 100% over the past four years. Builders are scrambling for parcels. One such parcel of ground, just 4.7 acres close to the freeway in Del Mar, California, was recently offered at the stunning price of $6.7 Million!!!

There are a few times, however, when land prices tend to stay flat, or even decline. Southern California in the early ’80s is a good example. During times of severe, and I do mean severe economic slumps, real estate values have a tendency to stay flat. When the economy recovers, and buyers, builders and investors begin purchasing again, the prices quickly increase.

Inflation is another key to the rising cost of real estate. Remember how a loaf of bread used to cost less than fifty cents? Now it’s $1.99 or so. The same is true in real estate. The same dollar today just won’t buy as much property as it did yesterday. Inflation, especially when combined with rising wages, has created an environment in our real estate markets where the value of the dollar is diminished versus our buying power in times gone by.

Remember the Law of Supply and Demand and inflation, and remember that they quit making land a long, long time ago.

With our auctions, you get the chance to name the price you’re willing to pay for the land you want to buy. There are some incredible bargains that people walk away with at our auctions. All the attendees even get the chance at winning free land. For more details about how to win free land.

To hear what other auction winning bidders have had to say about our auctions, read our testimonials.

Why Real Estate is an Excellent Long-Term Investment

Wednesday, July 2nd, 2008

There are basically three main reasons land is an excellent long-term investment. If you’ve read our article entitled “The Rising Cost of Real Estate” you already understand the Law of Supply and Demand… the first reason. This Law states that the less of something there is, the more demand there is for it. Since they stopped making land a long time ago, and because the world population is constantly increasing, the demand for land increases daily.

The second reason is called Leverage. Leverage may be defined as doing more with less. Three thousand years ago, leverage was a very basic tool understood by all. The Caveman wants to move a huge rock, so he uses a long piece of wood, wedged under the large rock, and he leverages the wood across a smaller rock. He pulls down on the wooden stick, the enormous rock moves with ease. Moving the huge rock the old-fashioned way would have taken six or even ten men but it was accomplished by one man with leverage.

The same principle is true in real estate. A small example would be purchasing a piece of vacant land for $10,000. Rather than paying the full price in cash, you pay a small down payment and you pay small monthly payments. Let’s say you pay $250 as a down payment. You have now “leveraged” yourself into a $10,000 investment, but you only had to pay $250. You now own a property worth over $10,000 but you’ve only invested $250.

An example on a larger scale would be buying a home. You could purchase a $150,000 home and perhaps you would only be required to pay a 3% down payment ($4,500). You’ve now “tied up” a piece of real estate worth $150,000, and you have only invested $4,500 of your own money.

No other area of investing offers such fantastic leveraging opportunities. Consider buying shares of stock. Can you imagine going to your local bank and saying to the banker “Hello… I’d like to buy $10,000 worth of stock. I’ve got $250. Would you loan me the other $9,750?” She would laugh you all the way to the parking lot. NO! Banks rarely loan money on stocks. And even when they do, they want you to put in half of the money, and they put in the other half. That’s only 50% leverage. In real estate, in the $10,000 and $250 example, you have leveraged 97.5%!

The third reason land is a terrific long-term investment is market volatility. Also known as the “ups and downs” of the market. Unlike the stock market, bond market, futures market, commodities market and most other markets, real estate values do not jump around from day to day. Homes and land do not lose 93% of their value in an afternoon of rough trading. Real estate, homes and land are far more stable investments. This is one of the reasons that banks are always eager to lend you money to buy a home, but are never interested in loaning you money to buy stocks, bonds, etc… They know that real estate is a solid investment, and they know that real estate almost always goes up in value. They know their money will be safe.

You can get even more leverage by buying under the market value when you buy your investments. It is common sense really. You have heard it a thousand times. Buy low sell high. This is one of the reasons our Auctions have become so popular. People get an honest chance at getting incredible wholesale prices on land. If you haven’t been to one of our auctions yet, please attend. We think you will be pleasantly surprised at the amazing bargains available at our land auctions.