When you’re looking to purchase land, you’ll want to find a parcel for the best price possible. While it can be beneficial to hire a realtor to buy a home, land doesn’t have to be so complicated. Without a home or other structures, you won’t have to get an inspection or worry about expensive closing costs. You also don’t have to fill out a mile of paperwork to get a loan. Instead, buying land for sale by the owner is much more cost-effective, faster, cheaper, and less of a hassle. Let’s explore a few reasons why.
Land For Sale By Owner Is Cheaper
When it comes down to hiring a realtor to sell land, there is a lot of overhead for an owner. As a buyer, you may not have to deal with these costs directly, however, you will notice much higher prices when realtors are involved. Why?
- Realtors are paid a percentage of the profit.
- There’s more red tape involved in the process.
- A seller will want a return on lost money.
This means that an owner will set the price of their land higher because they know a realtor will take a large portion of the sale. In return, this higher price will help them to cover these premium costs. However, purchasing land for sale by the owner will cut out the middleman, saving you both money in the process.
Better Financing Options
One of the biggest advantages of buying land for sale by owner is better financing options. Unless you had all the money upfront, you wouldn’t purchase a home without securing a mortgage from a bank. Large investments like these require backing, and most people can’t purchase a house without a loan. Home sellers also won’t offer better financing options like taking payments every month as many land sellers would.
In fact, many land owners provide their own financing options so that they attract more buyers with a hassle-free opportunity to purchase their land.
Benefits of land owner financing include:
- Lower interest rates
- A lower down payment
- No stringent paperwork.
It’s important to note that landowners will want to ensure you will pay them every month. This means you will most likely have to provide them with some credit check and financial history. However the good news is that you won’t have to provide them as much information that a bank, on the other hand, would require.
Buying land from an owner also provides you with the ability to pay for land in cash. If you have the cash, use it to your advantage. You’ll find this benefits you greatly when it comes to negotiation. It’s much easier to make a deal with an owner than it would be through a real estate agent.
Even more, getting a land loan can be extremely difficult. Why? Banks know that if you default on your loan, they can reclaim a house and sell it. Undeveloped land, however, is much harder to sell. Even more, the value of land can remain the same for long periods of time, which means they will be less likely to make a profit. This means a lender will be taking a larger risk loaning you the money to purchase land. In fact, most national lenders won’t even give out loans for raw land.
Close The Deal Faster
The process of closing a home can take up to 60 days. This means that a buyer won’t actually own it until this time period has expired. Closing on land is much different. When purchasing land for sale by owner, it’s faster and easier to close on the property. By dealing with an owner directly, you can sign all of the paperwork in one day and finalize the deal.
That said, it’s extremely important to have legal guidance when going this route. You don’t want to have to deal with any surprises like back taxes or liens. There are plenty of desperate land sellers out there that want to scam buyers. That’s why it’s important to do your research and make sure everything is done legally before handing over your hard-earned money.
Save Money Over Time
Whether you purchase land outright or work out a deal with an owner, you’ll pay much less over time. Why? When you secure a traditional land loan, you’ll be charged much higher interest rates. For example, if you took out a 30-year loan for $10,000 based on current rates, you would pay over double that amount by the end of the loan.
While owner financing requires shorter loans with higher payments, it’s worth major savings because you’ll get the land paid off much faster without as many fees or high-interest rates.
Do Your Research But Act Fast
When you buy land directly from an owner, these properties are much harder to find. In fact, they are rarely advertised like other real estate properties. Oftentimes, you’ll have to drive around, looking for “sale” signs in order to find a property for sale by the owner.
In fact, some of the best land opportunities aren’t found online or in a local newspaper. That’s why it’s important to do your research when you come across land that offers owner financing. While it may seem like a steal you need to jump on, take the time to consider the property type, condition, and location. All of these factors are essential when it comes to being land. Once you find the perfect parcel, act quickly because these opportunities are few and far between and will be off the market fast.
Land Resellers
Need help searching for land properties? Land Resellers can help. As an online marketplace designed for buying and selling land, we can help you find specific land properties in different parts of the country that match your unique criteria and budget.
With detail-rich listings, you can also view important information like land type, location, acreage, price, and other specifications. In addition, you can compare different properties using numerous filter options and side-by-side comparisons to find the ideal property you are looking for.