Paperwork for Selling Land by Owner

What is “For Sale By Owner” (FSBO)?

“For sale by owner” (FSBO) is a strategy for selling property. In most real estate transactions, sellers hire an agent to help them list properties, advertise them, negotiate offers, and handle paperwork, including working with the title company. 

FSBO selling gives the property owner more control over the entire process. Instead of delegating most tasks to an agent, the seller is directly involved in all aspects of the sale. 

Selling Land vs. Selling a House

If you plan to sell land, significant differences exist between this property type and a house. People who buy land are typically focused on development opportunities. For example, they may want to build a home or commercial structure on the land to rent out for a profit. 

When selling a home, buyers are primarily concerned about the livability of the structure and its amenities. If you sell land, the most important considerations are size, topography, and potential uses. 

Essential Paperwork for Selling Land

Land sales, like most real estate purchases, require extensive paperwork. The logistics of selling vacant land are complex, so many sellers prefer to work with agents. Agents can handle the recent real estate appraisal, closing statement, minor tasks like putting up a for sale sign, and paperwork. Some important documents and forms will be involved in most land sales. 

Property Deed

The property deed is a document that serves as proof of ownership, making it one of the key documents for a real estate transaction. You cannot sell land without proving you are the owner, so this document will be necessary to transfer ownership to the buyer. It’s important to make sure you have the deed available before listing the plot of land.

Survey

Land buyers care more about the size, shape, and makeup of a plot of land than homebuyers, who are mostly concerned with the structure itself. Before you sell land, you must pay for an updated land survey. This process will document the property boundaries and identify any easements or encroachments. 

An easement is another party’s right to use the land for a specific purpose. An encroachment is when a neighboring property owner builds past the boundaries of someone else’s property. You’re obligated to inform potential buyers about these. Things like property lines can impact buyer interest and asking price.

Title Report and Title Insurance

A title report lists all lienholders and owners of a property. With raw land, multiple lienholders, such as mortgage lenders, could appear on the preliminary title report. Running a title report will reveal any potential ownership disputes that could arise. Sellers will also pay for title insurance to protect themselves and prospective buyers from title disputes. 

Purchase Agreement

The purchase and sale agreement is a legally binding contract between the seller and buyer. It solidifies the agreed-upon price, the terms of the sale, the closing date, and any contingencies. Contingencies are conditions that, if met, would allow the buyer or seller to terminate the purchase agreement legally. 

A purchase agreement is only signed after the buyer and seller finish negotiating the purchase price. Before this, the earnest money deposit is often held by an escrow agent, and released after the purchase agreement is signed.

Disclosures

Selling vacant land or any type of property should be an honest and open transaction. It is unethical and illegal to hide material defects on the property from potential buyers. This is why every residential, commercial, or land transaction will include a disclosure document detailing known material defects or issues. 

In land sales, disclosure notices may mention environmental concerns or zoning restrictions. The seller is responsible for being honest about these issues so the buyer can make an informed decision. 

Closing Documents

A closing date will be chosen once the vacant land purchase agreement is signed. On this day, the buyer and seller will complete the remaining forms to finalize the sale process. 

Some documents typically signed on the final day include the deed transfer, the closing statement, and financing agreements. This is also when the bank or lender initiates the transfer of funds to complete the sale. 

The closing day documents should be signed with the assistance of a real estate attorney. 

Additional Paperwork When Selling Land by Owner

If you sell land with the help of a real estate agent, you can avoid some of the extra steps required to complete a land transaction. However, you won’t have as much control over the selling process. If you decide to “sell land by owner,” you must deal with the following documents to close the sale. 

Environmental Reports and Assessments

When you sell land privately, you may have to pay for an environmental report or assessment. This is usually the case for raw, undeveloped land. These reports identify potential hazards on the land or restrictions on what type of development is allowed. Buyers must know this information to build the developments they want.

Zoning and Land Use Regulations

Zoning plays a key role in a land contract. Professional land buyers know they can only develop land in specific ways based on zoning restrictions. For example, your land parcel may be in a residential zone, which means buyers can only build residential structures on the land. 

Before you “sell land by owner,” verify the zoning regulations for your vacant land and research land use restrictions to ensure the buyer’s intended use for the property is permitted. You can contact your local zoning office to understand local laws. 

Access and Easements

Land sales are unique because they could have easements or access rights involving other parties. The owner is typically the only party with access rights to a residential property. Just because your name is on the sale deed for the land does not mean you are the only one with the right to use it. 

An easement may name another party with the right to use the land. Access rights allow other named parties to enter the property as well. Documentation regarding these clauses will be necessary to establish clear ownership for the buyer. 

The Paperwork Process

Paperwork during a successful sale can be overwhelming. There are numerous documents to collect, sign, and share with serious buyers before the transaction can be finalized. Here are a few considerations for handling the paperwork.  

Legal Requirements

The documents needed for a real estate transaction must adhere to legal requirements and regulations. You must understand state-specific laws regarding the sale of land. Property codes can be incredibly complex, so navigating these documents alone is a tall task. Ensure you know all the relevant requirements for selling land in your state before the buyer pays for the property. 

Seeking Professional Assistance

To ensure a smooth process for the transaction, you should rely on professional assistance. While you may not need the services of a realtor, a real estate attorney, a title company, or even a tax professional can help guide you through the process to ensure everything is done legally. 

These professionals can verify your documentation and help facilitate a smooth closing process. 

Simplifying the Paperwork and Closing Process with a Cash Home Buyer

This process can be extremely overwhelming, especially regarding closing costs, land surveys, zoning research, and paperwork required to sell land. Some landowners may shy away from selling their parcels because of these complexities. However, you can avoid these headaches by selling to a cash buyer like A-List Properties. 

With our team, you can sell land in Texas fast with no financing delays because we have cash to buy your property. There is no need for an appraisal or a realtor’s services, saving you time and money on the sale. A-List Properties can also handle legal title issues, ensuring a stress-free sale. Call us today at 972-526-7042 or complete the online form to request a fair cash offer for your land.