5 or so years ago my wife and I were looking for a place to take a extended weekend away. What we were looking for was someplace quiet, away from crowds, fairly inexpensive, and not a long drive from our house. I’m not sure of the chain of events but the spousal unit picked Eureka Springs Arkansas for our long weekend, it was one of the few times in my life where I knew I wanted to be and wanted to come back to permanently.
Fast forward a few years to present day and after easily visiting Arkansas 8 or so times since that initial visit we felt we needed to make a change in our lives. We spent a fair portion of those trips “looking” at houses, and just raw land. What I wanted and what the wife wanted were 2 wildly different things. That can be hard thing to reconcile if you are not prepared for that sort of vision disagreement. We spent literally, months and years almost daily searching the interwebs looking at listings. There was a lot of back and forth about what I wanted and what the wife wanted. At times the wants and needs were wildly at opposites ends of the spectrum. If you are not prepared for a compromise, you will never have buy in from your spouse. It will always be something that she, or he will never participate in.
We did engage a realtor once on our first discovery trip and told her from the beginning that we were a couple years out from pulling the trigger on a purchase. We also shared with her we preferred to look at land on our own without a agent standing there looking at her watch. I want to beat the brush and see what is over the next hill, like, is there a hog farm with a 100,000,000 gallon pond of pig shit waiting for the next heavy rain to burst the banks and let loose with a wall of shit on me, downstream?
The agent didn’t stay with us, even after a courtesy call every time we popped into town.,How are things going? do you have a moment to pull a couple listings for us? Nothing major like drive us all over NW Arkansas so when can go shopping (yes that happens). On our trip this last September she was kind of indignant and distant. Her loss. There are too many other agents out there willing to be flexible for us to deal with someone who in the end just kind of became a bitch. I worked for 2 major Real Estate companies in my past and learned a lot about agent personalities. Majority are great!, a small minority can’t be bothered of you are spending more than $500,000. She fell into the minority.
We did narrow our search in September and became more serious about what and where we wanted to eventually settle. We found 2 listings and I called for more information. It so happened the agent listing the property turned out to be a great person, down to earth, very laid back, and fit our personalities. The properties we looked at were a bust, either they needed a lot of work, the owner was to set on to high a price, or there was just something hinky about how they were getting water, from the neighbors? By November we found 2 places that we wanted to see that was 2 counties over from where we originally looked back in September. We called our “new” agent and she was more than willing to meet us not only an hour’s drive away from her office but at 0900 in the morning.
We followed her car out to the first listing on our sheet of we wanna see’s for that day, 43 acres with a small off grid cabin. It turned out to be a really neat place tucked back in the woods sitting on a bluff overlooking a small valley. The agent and I did a little hike on the property, while we were gone the wife had gone over the cabin. She looked at me and said, let’s make an offer! Wow! ok, I wasn’t expecting her to say that.
Well, we made an offer, and then a counter offer. The closing took a bit longer than normal, and it was on us. We changed mortgage companies midway through the process mostly because of the interest rates being offered, but we also found out no one wanted to finance an off grid property or raw land. That wasn’t our intent at the beginning, to find an off grid place. It just happened.
The amount of financing we wanted was also a factor for changing midstream, for some mortgage companies that was an issue, not enough.
Insurance was also an issue, no insurance company will want to take the risk on a off grid property either. Another point learned was, yes if you borrow money the mortgage company will want insurance to protect their investment, duh. I do have to say that I did know the above information, it was more of a reminder than a realization.
As soon as the words “no utilities” are mentioned, because they will ask, most companies say no. The other thing we experienced is companies will insure you, but you will pay for it. And other companies were a flat out “say no”. It wasn’t until a insurance adjuster actually went out to the place and had a look for himself before we were able to get a honest insurance rate.
Off grid is a relatively new phenomenon in the mortgage and insurance world from my experience, so if you are going down that path of off grid, it isn’t as simple as obtaining pre approval on a regular home mortgage or insurance.
So here are a couple takeaways if you are going down the off grid path, whether directly or indirectly like us.
Local mortgage companies, credit unions, or banks and insurance companies are your go to guys if you do go looking for insurance or a mortgage. They understand the local market better than some algorithm in a mainframe located 1000 miles away with a customer rep reading a script does. We went local for both financing and insurance. We were pre approved on a conventional loan and having all my financial information available and at an arms reach helped the process. The credit union we used also gave me a veterans discount. It saved a few dollars.
Rural loans take a bit more leg work to do than the conventional. Expect push back from some companies either on the mortgage or insurance side, they may want more documentation, and in some cases more money upfront in the form of a down payment. Do your homework, and be aware that your options are far fewer in the rural mortgage and insurance world than the conventional market. We found that 20 yr. mortgages are the norm on rural loans, that can be good and it can be bad. A bad would be, If you’re strapped monetarily by taking on a second mortgage or able to put more money towards a down payment.
We also discovered our current home owners insurance will cover liability on the property but none on the cabin, cabin interior or any other structures located on the property. We had to make many phone calls to local insurance agencies to find coverage on the cabin and the contents inside.
With all the extra time and legwork it was a good learning exercise and worked out. Wouldn’t do it again, but I am better prepared if I do.
A picture of bliss
In the end it worked out, and we were able to capitalize on a still fairly down market.