Land for Sale by Owner
Land for sale by owner can offer substantial benefits for buyers, such as lower prices, smaller down payments, elimination of real estate commissions, shorter documentation, guaranteed financing, and no credit checks. When real estate is sold by a commercial brokerage firm and the financing arranged by large financial institutions, the transaction is usually more costly, time- consuming and complicated. On the other hand, private transactions between sellers and buyers can often result in a simple contract, with the transaction closing in a few days with little cost.
Both seller and buyer stand to benefit in private transactions. The seller benefits because the real estate commission is eliminated, and further, the seller can collect the substantial interest paid through the years instead of the lending institution. The buyer can benefit because the seller is providing financing, resulting in a much smaller down payment and the elimination of credit checks. Often this type of sale will utilize a contract for deed, also commonly referred to as a land sales agreement.
When using contracts for deed the following precautions should be considered for the protection of both seller and buyer.
- The seller should provide a copy of the deed as evidence of ownership, and/or the buyer should check county records to verify that the seller does in fact own the land and has the right to sell it.
- The buyer might want to request that the land sales agreement is recorded. In this case, however, sellers almost universally require a quitclaim deed to be signed by the buyer and held in escrow, to be used only in the event of a default on the part of the buyer.
- Both seller and buyer might want to order and review a short form of title search disclosing all matters currently of record affecting the property.
It is more common to see land for sale by owner in rural areas of the United States than it is in the big cities. Regardless, some tremendous land investment opportunities can materialize when the seller carries the note and provides the financing.
To view land for sale by owner CLICK HERE
Disclaimer: The information regarding land sales agreements is not intended as legal advice and readers should consult with their own attorney regarding any such transactions.