How to Sell Land Without a Lawyer
A common question when selling land by owner is whether an attorney needs to be involved. Yes, you can sell vacant land without an attorney as long as your potential buyer doesn’t want to purchase title insurance. If the buyer does want title insurance then the closing will have to be handled by a real estate lawyer or title company.
Even if your buyer doesn’t need title insurance, you may be wondering how to get started.
In this article, learn how you can prepare each legal document needed to sell land without a lawyer.
What does a real estate attorney do?
Depending on the transaction, the main role for real estate lawyers is to prepare the purchase agreement and handle the closing. The attorney will prepare the closing documents and also record the deed. An attorney may also handle the purchase funds and disperse them to the seller once the deed has been signed by the buyer.
There are many other things an attorney can help with. Lawyers can help take a property through the probate process if someone has passed away and left property in their estate. Real estate attorneys can also help resolve a legal issue that arises such as liens and other encumbrances.
It’s possible to do all of these things without a lawyer. But as situations get more complex, the risk increases that you won’t do something properly yourself. You could end up wasting a lot of time or worse if you take on something you don’t have experience doing.
You can prepare a real estate contract without an attorney. We don’t suggest you try to create something from scratch. Instead, there are two easy ways to do this.
The first option is to use contract forms provided by your state’s real estate commission. These are the forms that would be used by a real estate agent. In some states these forms are publicly available.
States where they are free and publicly available include Colorado, Oklahoma, and Texas. States where you have to be a real estate agent to access these forms include Arizona, California, and Maryland.
The second option is to use a contract from a legal document provider such as US Legal or Rocket Lawyer. These websites offer contract templates specific to the property's state law for a fee. The forms tend to be very simple and easy to use.
Real estate closing
The closing is typically where an attorney is most involved. After all, most real estate contracts are drafted by real estate agents. The two main steps in this process are drafting the closing documents. and then recording it.
Choosing the deed
The deed is the legal document that transfers title to the property from the seller to the buyer.
You can find a state specific deed template from a legal document provider. There are three main types of deeds:
General warranty deed
With a general warranty deed, the seller guarantees that there are no title defects, even before their ownership. A warranty deed would be preferred by the buyer.
Special warranty deed
With a special warranty deed the seller only guarantees the title is clear from the time they acquired the property to the present time. A special warranty deed would be preferred by the seller.
A quitclaim deed is fundamentally different from a warranty deed. The quitclaim deed transfers the interest in the property the seller has, but there's no guarantee that the seller has good title.
A quitclaim deed provides the least protection for a buyer. It is normally only used when the buyer and seller know each other well. For example, a quitclaim deed may be used between family members or spouses.
Preparing the deed
The requirements for a deed can vary by state, but they have common requirements. All deeds must include the date of the real estate transaction, the names of the buyer and seller, a legal description of the property, and the signature of the seller. The deed must also be signed in the presence of a notary public.
The easiest way to get the legal description is to take it from the deed that you hold to the property. If you don’t have the deed, you can find it online. To find your deed, search the property owner’s name in the recorder of deeds. You’ll be able to download or print the deed and find the legal description.
The legal description will look something like this if the property is a lot:
Recording the deed
Recording the deed is usually the responsibility of the buyer. Normally, the buyer will be motivated to record the deed to give public notice that they are the new owner. Still, if you’re selling vacant land by owner, you should know the steps involved. That way, you can explain the process to your buyer.
The first step in the recording process is to send the deed to the recorder’s office in the county where the property is located. You’ll need to familiarize yourself with the county’s document recording requirement. Follow the instructions carefully or the document may be rejected and have to be resubmitted.
Some counties have specific intake forms or cover sheets for recording real estate documents. Normally, recording fees and transfer taxes are due at the time of recording. The county may check that the property tax is fully paid at the time of recording as well.
Finally, the original deed is returned to the buyer from the recorder’s office once it’s been entered into their records.
Attorney states for real estate transactions
Certain states require an attorney to supervise real estate transactions. Generally, this is a question of whether a real estate closing without an attorney is considered the unlicensed practice of law. These states are Connecticut, Delaware, Georgia, Massachusetts, North Carolina, Rhode Island, South Carolina, and West Virginia.
Other states require an attorney to provide the title opinion. This just means the attorney certifies the title before title insurance can be issued. Title opinion states are Alabama, Louisiana, Mississippi, North Dakota, Oklahoma, South Dakota, and Wyoming.
Source: Attorney State Breakdown, OctoberResearch.com
You can still handle the closing yourself when selling land for sale by owner in these states. These laws just mean that if you’re closing the traditional way through a title company a real estate attorney needs to be involved.
When would I still need a real estate lawyer?
Now that you’ve learned how to sell land without a lawyer it’s worth mentioning situations where you may still want to use one.
If you’ve inherited a property you may want to have a real estate attorney handle the probate process. It’s possible to do this without an attorney. But it can get complicated, especially if there was no will.
Another reason to hire an attorney is if the standardized real estate contract templates don’t cover your needs. There are contract templates for most common situations. But if you’re selling commercial real estate you may want to use a purchase agreement customized for your situation by an attorney.
Please consult your financial advisor, accountant, real estate attorney, or tax specialist. This article is for informational purposes, and is not tax or legal advice.