Documents Needed to Sell Land By Owner in Texas
If you want to sell land by owner in Texas, you'll be responsible for preparing all the documents needed to transfer the property. This is a straight-forward process in Texas where free land sale contracts are available for landowners. Selling land is much simpler than selling a house by owner, and generally it’s possible to sell land without a lawyer.
All of the paperwork to sell land by owner can be time-consuming. Still, this may be the preferred approach when selling land privately, such as to a neighbor or family member. Discover what documents you'll need to sell by owner and as well as alternatives to doing it yourself, including selling land fast to a cash buyer.
Preparing for the sale - what do you need to sell land by owner?
Before you start to market the land for sale, you'll want to get certain documents in order. These documents will provide key information that a prospective buyer will want to know. They also show that you have everything needed to transfer ownership of the property.
Survey or topographical map of the property
When selling land, it's often important to have a survey or topographical map of the property. This document shows the boundaries of the property, as well as any features that are on or near the property, such as trees, fences, and buildings. Often buyers want to visualize the property boundaries. A survey may also be necessary to create a legal description of the land if one was not created before.
Title to the property
Examining the title to the land early in the process is critical for a smooth transaction. The title is evidence of who owns the property and can be transferred to another owner. While you may not have doubts about who owns the property, it's important to know exactly who is listed on the title. Those same owners will be listed on the sale contract and the deed.
It's the buyer's responsibility to conduct a title search to check that there are no liens or claims against the property. And the title search happens after signing the real estate contract. Still, discovering title issues later in the sale process can lead to lengthy delays. In certain cases it may even make your buyer reconsider purchasing the property.
Recent real estate appraisal
If you have any doubt about what your land is worth, you may want to get an appraisal. The purpose of a real estate appraisal is to estimate the value of a particular property. The appraiser considers factors such as location, size, features, as well as recent nearby property sales.
It is important to hire a qualified appraiser such as the ones licensed by the Texas Appraiser Licensing Certification Board. The appraiser will inspect the property and review recent sales in the area. After analyzing this information, the appraiser will then provide an estimate of the market value for the property.
Document the list of assets to sell with the land
When you sell your land, you may also be selling the rights to other assets that go with the land. This is particularly true for farm and ranch sales. These assets can include anything from a tractor to a timber stand. Listing these assets with the land can make it easier for potential buyers to know what they are getting, and it can also speed up the sale process.
Real estate taxes
Whoever is buying the land will want to know what the annual property taxes on the land will be once they become the new owners.
The annual property tax amount is also needed to create the property tax pro rations on the closing statement. The property taxes for that year are divided between the buyer and seller according to their length of ownership for that year. The pro ration will list how much of the annual property taxes each party owes. Typically, the seller pays taxes up to the date of sale, and the buyer pays the taxes after the sale.
To find your current property taxes, go to the property tax assessor's website in your county. Type in the address or assessor's parcel number of your property. You will find a link that says "View Property Tax Assessor's Information." You can also call the property tax office and ask them to send you a copy of your current property tax bill.
Documents for selling land by owner in Texas
You'll need to draft several documents before you can transfer title to the buyer. The most negotiated document is the sale contract or vacant land purchase and sale agreement. Once the contract is signed by both parties, you may need to make several disclosures to the buyer about the property. As part of the closing, a closing statement will be prepared listing the key financial details of the transaction. Finally, the deed needs to be drafted. The deed is the document that gives its holder to ownership of the property.
Contract to sell land by owner
One of the most important legal documents for selling land is the contract between the buyer and seller. The purpose of the sale contract or purchase agreement is to establish a binding land agreement between two parties. This document lays out the terms of the sale, including price, closing date, and any contingencies. It is important to make sure that the land contract is clear and concise, and that both parties understand what they are signing.
In Texas, there are excellent free land sale contract templates available from the Texas Real Estate Commission (TREC). As public records, contract forms adopted by the TREC are available to any person. Two contracts are available for use in a land sale and both are available for download as a simple land sale agreement pdf. Before drafting your contract to sell land in Texas, make sure you familiarize yourself with the differences between the two.
Unimproved Property Contract
This contract form is for property that does not have any improvements such as buildings or fixtures on the land. It is normally used for property that has been platted. This means it has a recorded Lot/Block legal description instead of a metes and bounds property description.
Some of the most important items in the Unimproved Property Contract include:
- Date of the contract
- Identity of the buyer and seller
- A description of the property
- Sale price
- Earnest money deposit amount
- Closing date
- Option fee, if applicable
- Signatures of the buyer and seller
Farm and Ranch Contract
This contract is for rural properties that have a metes and bounds property description. The property description is created with the survey. Besides the items covered in any sale contract, this one has specific terms to deal with items for farms and ranches.
In the Farm and Ranch Contract, items like fences, gates, sheds, outbuildings, and corrals are included in the sale. Other items can optionally be included such as portable buildings, irrigation equipment, and fuel tanks.
Disclosures are another important part of selling land. These documents list any issues the seller is aware of with the property. These might include environmental hazards or zoning restrictions. It is crucial that both buyer and seller are aware of any potential issues before closing on the sale.
To help avoid liability, the seller should provide disclosures to the buyer, even if you're selling unimproved or vacant land. Most likely, most disclosure items will be marked as 'unknown.' Still, the disclosures could point out issues, such as buried tanks, trash, or environmental issues.
The closing statement is a document that lists the financial details of the transaction. This includes the amount of money paid by each party, as well as any taxes or fees associated with the sale. The closing statement ensures that both buyer and seller are aware of all costs involved in the transaction.
Typically, the closing statement is prepared by a title company. Even if you are selling land by owner, you may want to use a title company for certain services. These include creating the closing statement, and preparing and recording the deed. They also act as escrow agent which means they will transfer the closing funds from the buyer and to the seller once the deed is signed.
The deed is the document that conveys equitable and legal title to real estate. When selling land by owner, you should be aware that under Texas law certain rules apply for a deed to be valid:
- Buyer and seller must be named
- Wording must make clear the intent to convey the property
- Property must be adequately described
- Deed must be signed by the seller and delivered to the buyer
In most cases, the buyer will also want the deed to be recorded in the county clerk's records. To do so, the seller's signature on the deed needs to be witnessed by a notary before it can be recorded.
Alternatives to selling land by owner
Of course, there are alternatives to preparing all the documents needed to sell land by owner. There are trade-offs associated with each of them, but you may decide it's worth it for the time and aggravation it saves you.
Let a realtor sell the land for you
Now that you know the paperwork involved, you may be reconsidering selling land by owner. Listing the property for sale with a realtor will not eliminate all of the paperwork for selling land by owner. The real estate agent will draft and review key documents for you such as the sale contract. But you'll probably need to complete other documents like the seller disclosures yourself.
Besides reducing the paperwork, the realtor will also help find a buyer for you. Those two things combined - the marketing and the transaction support - are typically why people hire real estate agents. However, listing the property with a realtor means you'll be paying a sales commission. That might not seem worthwhile if you already know who the buyer will be.
Selling land for cash
The other alternative that will reduce the paperwork even more is to sell to a real estate investor for cash. In our business, because we buy properties as-is and pay all closing costs, we use a one page simple land sale agreement in most cases.
When you sell to a land buying company, you sell the property at a discount, although you won't have to pay any real estate commissions. The other benefit of selling land for cash is that it's fast - usually the entire process is done in less than two weeks.
If you'd like to learn more, consider selling your land fast by requesting a cash offer.