If you’ve decided to sell your land by owner, you’ll have two vital, initial decisions to make:
- Will you use a real estate agent?
- Will you close through a title company?
Contrary to popular belief, you aren’t required to sell your land with a real estate agent. Real estate agents don’t like hearing that, but it’s the honest truth.
You can represent yourself and sell land by owner. While there are pros and cons to using an experienced real estate agent, for this article, we’ve assumed that you’ve already decided to go alone and sell land without a realtor.
Nonetheless, even without a realtor, it’s probably best to close your transaction through an independent escrow agent or title attorney.
Similarly, it’s not a requirement, but you’ll need a title underwriter to get a title policy. Unless your buyer is a trusting relative or familiar with real estate title, they’ll want a title insurance policy.
Further, remember that the current real estate market may impact your land sale. Selling land can be a slow process. Land tends to sell MUCH slower than homes.
Finally, although the title company cannot provide legal advice, an escrow officer, title agent, or neutral title attorney will ensure that your transaction closes according to usual industry standards, follows local laws, and includes all of the documents needed.
What Documents Are Needed to Sell Land by Owner?
Regardless of whether professionals are involved, you’ll need to understand all the necessary documents required to sell and convey your property as the owner.
- Purchase Agreement: This is the sale contract between the buyer and seller.
- Disclosure Documents: These are state-required property disclosures.
- Property Survey: This document establishes the property’s legal boundaries.
- Title Records: These documents verify legal, record title to the land.
- Deed: This document transfers land ownership from the seller to the buyer.
- Property Tax Certificate: This document verifies that all property taxes are paid up.
- Closing Statement: This document accounts for the amounts owed related to the sale.
- Other Relevant Documents: These documents cover everything else.
The purpose of these documents is to establish the terms and conditions between the parties in the transaction. And while this may include legalese and references to arcane property laws and statutes, these documents allow the buyer and seller to point to a document that details explicitly and enumerates the parties’ rights, duties, and obligations.
These documents prevent disagreements between the parties and contemplate scenarios and situations common to the transaction based on laws and history but perhaps foreign to the parties involved due to inexperience.
These contracts and documents exist to prevent disputes during the sale process.
Nonetheless, technically speaking, the deed is the only required document in the sales process.
Do You Want to Skip Ahead to the Closing Table?
We’ll describe the documents needed to sell land by owner below, but if you want to skip all the hassle and fast forward to the end… TL;DR… as they say… contact Dow Land today!
Call or email us today for a cash offer. We buy vacant land all across America and would love to make you a happy client. We can talk about your vacant land and discuss the sales process, and regardless of your offer, you’ll have no obligation whatsoever. You have nothing to lose!
Back to all the necessary documents…
The vacant land purchase agreement is the primary sale contract between the buyer and the seller that outlines the terms and conditions of the sale between the parties. This contract may also be referred to as a “purchase and sale agreement” or “contract for sale,” among other common name variations.
The agreement can be a custom document drafted by your attorney. Most parties will frequently use a form promulgated by the state’s real estate commission or regulatory body.
For all but the most exotic and unique situations, most counterparties will rebuff proprietary contracts because they take more time, attention, and expense to review and tend to be one-sided, which will require legal wrangling and further negotiation to get both parties to sign.
Whereas the generally accepted, promulgated contracts are balanced, understood, and better suited for most transactions. Quite simply, you’ll save time and money using the state’s contract and reduce possible friction or disagreements in your deal.
For example, the Texas Real Estate Commission (TREC) publishes TREC Forms for farms and ranches, new homes, one to four-family residences, residential condominiums, and unimproved properties. These contracts have evolved over the years through repetition, usage, and litigation to be complete, thorough, reasonably balanced, and… understood by all parties in the real estate industry.
It’s essential to choose the best sale contract when selling vacant land; in Texas, assuming there is no residence, it’s typically best to use the unimproved property or the farm and ranch contract.
At the bare minimum, the typical sale agreement will include the following:
- Buyer and Seller
- Property legal description
- Sales price
- Earnest money, option fee, and a termination option
- Title policy and survey
- Closing date and date of possession
- Closing costs and the party responsible for paying
- Contract and closing contingencies
The agreement may also be supplemented with various addenda such as a third-party financing addendum, seller financing addendum, seller’s temporary residential lease, and addendum for reservation of oil, gas, and other minerals, to name a few.
And if your property or situation does require unique contract terms, you can always use the “special provisions” clause to modify the contract to your needs.
Make sure you use the contract for the state where the land is physically located rather than where you or the buyer lives if somewhere else; real estate laws vary state-to-state, and you’ll want to comply with local statutes and requirements.
🚩 WARNING: If a prospective buyer presents a contract other than the state’s promulgated form, it may be a red flag. If it’s “their” contract, you can all but be assured that it’s one-sided, in the buyer’s favor, and rife with terms and conditions that will allow them to back out of the contract without penalty for even the flimsiest of reasons or for no reason at all.
🚩 WARNING: Seemingly simple, one-page contracts are ubiquitous in the vacant land-buying business, particularly when sent with a cover letter as USPS direct mail marketing, but indeed, they inevitably include a clause that unilaterally allows the buyer to terminate the contract.
Seller disclosure requirements vary by state and often depend on the property type (e.g. residential, industrial, vacant land, etc.). Some disclosures may be included as representations and warranties in the purchase agreement or contract for sale, but it’s common to have additional disclosure documents as well.
For example, Texas requires sellers of occupied, single-family residences to provide the buyer with a Seller’s Disclosure Notice (Form ID: OP-H). This form includes disclosures related to:
- Property Features
- Known defects or required repairs
- Health and safety conditions
- Termites, improper drainage, water damage, soil settling, structural or roof repairs, toxic waste, asbestos, lead-based paint, methamphetamine, etc.
- Non-permitted construction and repairs
- HOA fees and assessments
Additionally, in Texas, when selling land by owner, a seller must provide a copy of any written inspection performed in the last four years, which includes your initial buyer’s inspection if it’s less than four years old.
🚩 WARNING: Being state law, there’s not much room for debate in making these disclosures, and new owners will have legal recourse against a seller for missing, incomplete, and false or misleading disclosures. This is a lawsuit waiting to happen. Check your local state laws, consult a local real estate attorney, and follow the rules use the correct disclosure form!
A land survey visually depicts the property boundaries and includes a type-written legal description of the property with a metes and bounds property description. The survey will also note restrictions, easements, and structures on the property and will frequently reference deed records and descriptions for adjacent rural properties.
The surveyor will locate and flag or physically mark the property’s corners with surveyor’s tape, a stake, spray paint, or a partially-buried, permanent monument. These markings will allow you to precisely and visually identify the corners on the property.
A survey will identify possible encroachments, adverse possession, and property line disputes with neighboring property owners.
An encroachment occurs when a neighbor builds a structure, fence, or improvement that improperly crosses a property line; adverse possession occurs when an individual uses another party’s property without permission.
In addition to the typical survey, which establishes the boundaries of a parcel of land, you may need another type of survey, such as a topographic survey, monumentation survey, as-built survey, mortgage survey, or floodplain survey, to establish information about your land.
Property surveys are only sometimes required when selling vacant land, but practically speaking, most buyers will want one. Lenders almost always require one. And if your current survey is particularly old or outdated, it’s a good idea to go ahead and get a new one.
👍 Recommendation: Get an Updated Property Survey Before Selling Your Vacant Land
If your survey is old or you don’t have one at all, it’s a smart move to go ahead and get an updated land survey as soon as possible. Most buyers will require an updated survey and expect the seller to furnish or pay for one.
Potential buyers will be impressed! And it will help sell your vacant land fast!
🚩 WARNING: In many rural areas, local surveyors are in high demand, and they tend to stay busy with lengthy backlogs. This is an up-front, out-of-pocket investment, but it will be invaluable after you open a title file to get your deal closed on time. Knock it out now, or you risk a delayed closing!
As the current owner, a copy of your deed is an excellent place to start; it’s THE most important document. This document shows that you are the current owner. Still, the new owner will require more substantive and insured proof of title in the form of a title commitment, ultimately becoming an insured title policy.
A recorded deed alone is not proof of legal title, nor is the county’s real property or tax records. Neither the county clerk, tax assessor, nor tax collector approves or verifies legal title. While their records do often comport with legal title, it’s only by default rather than being an overt part of the process. In the event of title disputes, recorded bilateral or multi-lateral agreements and court rulings will determine legal title, not the county’s administrative officers or their records.
Any title records you can provide to buyers and the title company – such as your buyer’s title policy – will speed up the title verification process and closing. This is particularly critical if curative work is required or if you inherited the land. Curative work is required when legal title is still vested in a deceased party’s name.
👍 Recommendation: Open Title Before Listing Your Property
If you are serious about selling land by owner, it’s a smart move to go ahead and open a title file and get an updated title commitment from the title agency or escrow agent before signing a contract. This may significantly decrease your time from contract to close and will identify or eliminate most problems and issues in advance; it also gives you the advantage of selecting the best or your preferred title company for the property.
If there is any curative title work to be done related to estates and heirships, do it now! It can take months to resolve some of these title issues, and this may scare off buyers; if you’re under contract and haven’t cured title, this can seriously annoy buyers, and you may jeopardize your deal.
The deed or conveyance is the legal document that will transfer ownership in the land from the seller to the buyer. This document will be recorded in the local county clerk’s real property records and provide public notice of the property transfer.
The deed is the #1 most important and vital document in the entire process of selling land.
The most common types of deeds include general warranty deeds, special warranty deeds, and quitclaim deeds; these three documents specifically vary by the nature and extent of the grantor’s warranty of title, but much like any other contract, the language in the deed can vary widely.
The essential deed components of a real property conveyance include:
- Grantor and grantee
- Granting language or operative words of conveyance
- A sufficient legal description of the land
- Proper execution
- Delivery and acceptance
Depending on the state’s recording statutes, essential deed elements may also include:
- Effective date
- Grantor’s address
- Grantee’s address
- Recital of consideration
- Waiver of dower, homestead, and curtesy
- Draftsman’s name
- Recital as to the source of title
- Indexing instructions
- Documentary and tax stamps
Typically only the grantor, the seller, signs the deed, but the grantee may also be required to sign if there are specific public terms and conditions between the parties that would require both signatures to prove mutual agreement.
Once a deed has been recorded, it cannot be reversed or undone without a signed, mutual agreement among the parties; the initial grantor cannot unilaterally alter or undo the conveyance.
Property Tax Certificate
Before selling land, a few days prior to closing, you’ll want to make sure property taxes are paid up and request a tax certificate from the county’s tax assessor. The tax certificate is proof that all taxes have been paid as of the date of the certificate, and this is an insurance policy of sorts from the county and buyer that you’ve paid all of the property taxes.
The closing statement, or settlement statement, is the document that details all of the charges and credits to the buyer and seller in a real estate transaction.
Most title companies and escrow agents will use the HUD-1 Settlement Statement, which is promulgated by the U.S. Department of Housing and Urban Development; as a public, free, and widely adopted form, title companies, lenders, lawyers, realtors, etc. are all very familiar with the form.
The HUD-1 can be used for cash or financed transactions, and it contemplates all of the standard categories and types of charges involved in typical real estate transactions, such as net proceeds, property tax prorations, title insurance, commissions, escrow fees, deposits, recording charges, courier fees, etc.
If you’re selling your land as the owner, and not using a title company, you don’t technically need a HUD-1 settlement statement. Still, to avoid disagreements, it’s a good idea to have a bill of sale or formal, written reconciliation of the amounts to be paid by and to the parties involved.
If the land is being financed, the lender will require you to use a title company, and you can also expect to see the following documents.
Contract for Sale
When the buyer is using a third-party lender or the seller is providing financing, the terms and conditions of the sale are often expanded from the purchase agreement to include a contract for sale or real estate sales contract. The contract for sale includes terms and conditions related to the financing and ongoing relationship among the parties until the debt is repaid, including defaults and remedies.
Deed with Vendor’s Lien
The deed with vendor’s lien contains many of the provisions of a typical warranty deed, and it still conveys the real property. Still, it also reserves a lien for the seller against the land to secure payment of the total purchase price.
This also notifies the greater public that the land is encumbered and establishes the lender’s secured interest in the land.
Deed of Trust or Mortgage
A deed of trust is an agreement between a buyer and a lender that a trustee will hold title to the property until the debt or mortgage on the property is paid in full. This document will be recorded in the county clerk’s records and will contain state-required disclosures and the terms and conditions of foreclosure. State law will dictate whether a deed of trust or mortgage will be filed against the land to secure the debt.
A promissory note is a loan document where the buyer, the borrower, promises to pay the debt. The note includes interest rates, payment amounts, and other obligations. This document is not typically recorded publicly.
Other Relevant Documents
The other documents required to sell your property by owner vary widely and will depend on the situation’s particulars and your land.
Certain documents may be unique to your land.
Although too much information may overwhelm prospective buyers, a complete set of property documents and disclosures signals that you are honest, confident, and thorough to a potential buyer.
It’s also clear that you’re ready and prepared to sell the land.
You may not need or be required to disclose all the information included below. Still, having all the information gathered, organized, and ready, you can promptly respond to all questions and due diligence requests.
After all, you don’t want to lose momentum with negotiations and unnecessarily extend due diligence periods due to missing or incomplete information.
🚩 WARNING: TIME KILLS DEALS! ⏱️ ☠️
Other Relvant Documents:
- Owner’s base source deed(s)
- Any subsequent or recent deeds, including acquisitions and divestitures
- Seller’s title insurance policy or title commitment and title search
- Certified probate or recorded heirship documentation and affidavits (if applicable)
- Legal, insurable access: verify public road access or document easement through private owner or public lands
- Water rights: tables, maps, stock certificates, assessments, reports, etc.
- Mineral rights: mineral deeds, mineral reservations, past leases, run sheets, title reports, royalty statements, etc.
- Zoning documents
- Deed restrictions
- Current third-party and county appraisals
- Survey, plat, and other maps
- Topographical map
- Home floor plan or CAD
- Past property insurance policies
- Tax map
- All existing easements: access, utility, pipeline, transmission, oil & gas, conservation, etc.
- All current leases (e.g. residential, grazing, hunting, agricultural, oil & gas, solar, wind, BLM, USFS, etc.)
- Well permits: domestic, livestock, and irrigation
- Hunting units, wildlife habitat, fishery, and any stream enhancements
- Livestock brands being conveyed
- Conveying: list of personal property, livestock, and equipment
- Reservations: list of personal property, livestock, and equipment
- Financial statements and production records: livestock sales, hay production, leases, recreational Income, oil & gas royalty income, wind and solar royalties, etc.
- Phase One environmental tests or any other property inspections or reports
Ready to Sell Your Land?
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And, we conduct transactions through an independent title company or real estate attorney.
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Legal Disclaimer: We are not lawyers, we cannot provide legal advice, and we do not represent you selling land. The information contained in this article does not and is not intended to provide legal advice. Consult with your own real estate attorney and seek professional help as required.