We've prepared this “Buying Land in Texas Checklist” to walk you through some of the higher-level components and steps for buying land in Texas. Depending on your needs and the specific property, there may be some additional steps and things to consider, but this basic framework should hold true.
It's best to establish your financial budget for buying land in Texas before you get too far down the proverbial road. It's fun and harmless to browse properties for sale online. However, when you get serious, and before you start emailing property inquiries to agents, you need to sit down and determine what you can afford. Your budget will have the largest impact on what and where you can afford to buy land.
It will be disappointing and frustrating for you, your family, and your realtor if you don't have a clear sense of what you can afford before looking at properties and making an offer.
When considering your budget, be sure to consider annual costs like mortgage payments, property taxes, insurance, utilities, maintenance, etc. in your analysis too.
Depending on your budget and available cash, most buyers will need a bank loan or mortgage to finance the purchase. Like determining your budget, you'll want to do this early in the process and talk to your bank or loan officer. Credit scores, credit history, and debt-to-income ratios can sneak up on buyers and ruin the day.
Plus, most banks will require a larger down payment and offer a lower loan to value when financing land.
Finally, when you are pre-approved, you'll signal to your realtor that you mean business, and sellers will have confidence that you can close on your offer. Most sellers won't accept a contract with a financing contingency without a pre-approval letter, and you don't want to lose a deal while scrambling to find a loan.
When you're looking to buy land, it's important to have a clear idea of your needs, wants, and deal-breakers. Your needs are the things that are essential for the land to have, such as a certain amount of acreage or a certain location. Your wants are the things that would be nice for the land to have, such as a pond or mature trees. And your deal-breakers are the things that would make the land unsuitable for you, such as a high property tax rate or a property that floods. By being clear about your needs, wants, and deal-breakers, you can save a lot of time and energy when searching for land.
When buying land in Texas, it's important to do your research. There are many different areas to choose from, each with its unique benefits and drawbacks. Fortunately, several online resources can help you narrow down your search. Realtor.com and Zillow are both great places to start. You can browse listings in your desired area, learn more about the local market, and even get in touch with a real estate agent who can help you find the perfect piece of land.
Don't forget to look at the Texas land listings on LandWatch, Lands of America, and Land and Farm too. These three listing sites have more properties than any other after the MLS-related sites (e.g. Realtor.com, Zillow, Redfin, and Trulia).
Once you've found a few potential properties, it's important to take the time to learn about the area and what it has to offer. What is the climate like? Is there good access to roads and utilities? What kind of terrain are you looking at? All of these factors can impact your decision-making process. With a little research, you're sure to find the perfect spot to call home.
If you are unfamiliar with an area or haven't spent much time there, it's a good idea to get an Airbnb and spend a long weekend there. Better yet, get a long-term rental for a month or even a year. And don't stay at a hotel or resort! That's not what it will be like to have your own property; you won't have maid service or an on-property restaurant. Have you tried the restaurants in the area? How's the grocery store? What's the vibe from the locals? What are the attractions and entertainment options in the area? This is a big financial investment, and you want to avoid buyer's remorse. Try it, before you buy it.
For most buyers in most situations, it's probably a good idea to hire a realtor, but it's by no means an automatic YES! It's not a free service; there's a cost to you as the buyer. And if you do decide to hire a realtor, make sure she has expert-level experience in the area and specializes in land, farm, and ranch properties.
You aren't required to have a realtor when buying land in Texas. Or selling for that matter. However, in all likelihood, at least one realtor will likely be involved in the transaction.
When buying land in Texas, you must do your due diligence. This means taking the time to tour properties, ask questions, and learn as much as you can about the land and the area. You may want to hire a realtor to help you with this process. A realtor can provide valuable insights and help you make an informed decision. Remember, buying land is a big investment. It's important to research and choose a property that is right for you.
Formal property disclosures will be provided later, but this is a good time to do some initial property due diligence. When touring and talking with seller and agents consider the following:
If you get really serious about buying land in Texas and are willing to make a small investment, consider subscribing to onX or Landglide. Either of these two apps will give you loads of information while researching or touring a property.
If you want to buy land, the best way to start is by making an offer on the property. The first step is to find a piece of land you're interested in and contact the owner or her realtor. Once you've reached an agreement, you'll need to draft a contract and have it signed by both parties. This contract will outline the terms of the sale, including the price, any contingencies, and the timeline for closing. Once the contract is in place, you'll need to put down a deposit and begin finalizing the details of the purchase.
There are many different types of land contracts available in Texas, and it can be confusing to determine which one is right for your situation. The Texas Real Estate Commission (TREC) offers a variety of contract forms that can be used for different purposes. For example, the Residential Purchase Agreement can be used for the sale of a home or other property, while the Farm and Ranch Contract can be used for the sale of land that will be used for farming or ranching purposes. It's important to choose the right contract form for your needs to ensure that all of the necessary elements are included and that you are protected in case of any problems.
These are the most frequently used TREC forms for buying land in Texas:
There are a few things to consider when determining your offer amount on land. The first is the buying price of similar land in the area. You can research this online or by talking to a real estate agent. It's important to have a good idea of what land is selling for so you don't overpay. The second thing to consider is your budget. You need to be comfortable with the monthly payments and have a down payment saved up. The third thing to consider is your negotiation strategy. Will you try to negotiate the price or offer more money for a quicker sale? Lastly, you must ensure all of the land's features are mentioned in the contract. This includes any buildings, fencing, or other structures on the property. Once you've considered all of these factors, you'll be able to come up with an offer amount that makes sense.
It's important to consider all the contract terms when making an offer on land in Texas. In addition to the purchase price, you'll also need to pay for a property survey and title insurance. You'll also need to put down an earnest money deposit, typically 1-2% of the purchase price. In some cases, you may also be asked to pay an option fee, which gives you the right to back out of the contract if certain conditions aren't met. However, all of these terms are negotiable, so it's important to have an experienced real estate agent on your side who can help you navigate the contract and negotiate the best possible terms.
Mineral rights are a complex, confusing, and divisive issue when buying land in Texas. Buyers and sellers can get twisted up over the subject. First, without an explicit reservation, mineral rights will transfer with the land.
However, mineral rights are frequently severed in part or whole from the surface rights, and the current parties can't do anything about it. Further, running mineral title is different from than running surface title; your title policy will exclude coverage for minerals.
Ultimately, the issue comes down to either A) a seller thinking the mineral rights are extraordinarily valuable, or B) the buyer is scared of a well padsite in their front yard.
If the minerals are producing, then the value can be readily determined, and if they are non-producing, then, in all likelihood, they are not very valuable. And oil companies aren't going to put a wellsite next to your house; they'll have to negotiate with you for a location, and they'll be looking for best location with the least impact and resistance and lowest cost. Don't worry too much about this issue.
Before you purchase land, it's important to conduct due diligence to ensure that the land is free and clear of any liens or encumbrances. The best way to do this is to work with a title company. A title company will search public records to confirm that the seller is the rightful owner of the land and that there are no outstanding claims or judgments against the property. This process is important to protect your investment and ensure that you can take possession of the land free and clear. Once you've conducted due diligence and are confident in the land title, you can move forward with your purchase with peace of mind.
Land is a valuable asset, and when you're buying land, it's important to do your due diligence to ensure that you're getting what you expect. One key part of due diligence is getting a property disclosure from the seller. A property disclosure should list any known problems with the land, such as easements or encumbrances. It's important to review the disclosure carefully and ask the seller any questions. You may also want to hire a land surveyor to verify the property's boundaries and check for any easements or encumbrances that are not listed on the disclosure. By taking these steps, you can help ensure you're getting the land you want.
You aren't required to have a survey unless the title company requires it or you want “boundary coverage” with your title policy. Nonetheless, it's usually a good idea to get a new survey if the buyer doesn't have a reasonably current one, and most won't. This is a negotiable contract term, but most buyers expect the seller to pay. A word of warning: rural property surveys are more expensive than a city lot survey, and they can take a while to complete; most survey companies have a 2-4 week backlog or more.