Land For Sale
Assuming that you have found some cheap land for sale, you either need to learn about land loans in order to actually purchase that piece of land, or you have already bought it and in that case you are looking for commercial or home construction loans to make something out of it. The idea here is that whenever you are involved with residential or commercial land for sale by owner, some kind of financing will eventually be needed, whether that comes in the form of land loan financing or construction loan financing. Before I go any further, I would like to start by saying that if you have some money saved up then it would be much wiser to use it as a down payment on any loans for land purchase instead of saving it for commercial or residential construction loans.
You see, with the possible exception of farm loans, whenever you are looking for vacant land for sale, you should know that land financing is difficult to get. The truth is that land sales have fallen due to the fact that bare land loans are not being approved as easily due to our economic crisis. As a buyer, you don’t only have to worry about land loan rates, but before you even get there, you have to find some land loan lenders that will actually negotiate with you. And that is true whether we are talking about farm or even hunting land for sale.
Then again, it is possible to get land financing and I am not referring solely to farm loans. I recently helped one of my readers find some land loans for a government land for sale in Washington State. Interestingly enough, since it was government land, we discovered that most lenders were more lenient to provide lot loans. Using a simple land loan calculator, we were able to narrow it down and we actually found two loans on land that would work for him. The only thing that was left is finding him one of those new construction loans, but after you have the land that is the easy part.
Of course, that’s not to say that you should only look for farm land for sale or government land for sale. You can get vacant land loans to buy land anywhere, and it doesn’t matter what kind of land that will be. All I am saying is that you should do your homework, so that you don’t get caught by surprise. Many people seem to think that the hardest part of the equation is finding some cheap land for sale by owner, and then convincing the owner to lower the price. Well, all I am saying is that you should think two steps ahead, or in other words, learn about raw land loans and, depending on your purpose, residential or commercial construction loans.
I could keep going forever, but I’ll stop here by saying that you should learn about land loans and figure out how to get a commercial or residential construction loan before you go on your search for cheap land for sale by owner!
March 26th, 2011 at 3:41 pm
My fiance and I are looking to buy a 10+ acre homesite in Texas. They company selling the tracts offers owner financing. Is this a good idea? Better than a land loan?
April 15th, 2011 at 8:35 pm
[...] person is looking for cheap homes for sale, but how many of those people would consider cheap land for sale? With an already built home, the equity is there, while with just land, they would probably need to [...]
April 23rd, 2011 at 8:24 pm
I need a land loan for $18,500 and can not get no one to help me??????
June 21st, 2011 at 11:26 pm
Melissa – owner financing can sometimes work to your advantage, since the owner will try to do his/her best to get their property sold. However, you always have to be very cautious when negotiating the terms and conditions of such financing.
Darrin – Please find my personal email through the contact us page and tell me exactly what you need. I doubt that you have found a land that’s worth $18,500.
Dave
June 21st, 2011 at 11:49 pm
Dear Sir,
I am trying to find a lender that will finance a land loan for me. I am recently divorced and have to refinance a piece of property that was in my ex-husband’s name only into my name. It is not possible for me to build any time in the near future. The amount owed is only $13,962.49 on a 36.03acre parcel in Valle,AZ near Williams/S. Rim Grand Canyon. It was purchased for around $42K and the the value is still just above the purchase amount according to the Coconino assessor office statement. If you have any advice for me regarding how to resolve this, please contact me at my e-mail or cell. Thank you for your time.
Sincerely,
Priscilla Benedict
June 21st, 2011 at 11:55 pm
Priscila,
Let me think about this and I will try to give you a call later this week.
Dave
June 29th, 2011 at 7:57 am
We(me and my associates) need a land loan for around $300,000 or more and can not get no one,kindly help us.
July 3rd, 2011 at 6:53 pm
Dave,
My husband & I are looking to purchase some country land to put a future home on someday. We have found a 5.2 acre lot we like that’s listed at $52k when the county appraisal is $22k. We currently own a home w/ approx. $70k in equity. The bank I talked to around here said they loan like a personal loan – at 6% for only 2 years. This would be way too high of a monthly payment to make for 2 years. What other options are out there? We thought about making a lower offer, but with that kind of loan there is no way we could purchase land any land. Your help would be greatly appreciated.
Thank you for your time!
Jennifer
July 5th, 2011 at 6:46 pm
Hi Dave,
My husband and I are interested in a 9 acre lot for sale by a local bank. They accepted our bid of 40k. We would like to buy this land to build our home. Our credit and income are great, but the banks around here (Augusta, GA) want 35%-50% down payment which is a little steep for us to put down. But we don’t want to lose this opportunity. Would you mind helping us find some trustworthly banks that do not have such high down payment requirements? Thank you, Crystal
July 7th, 2011 at 11:10 am
Me and my wife are looking at a 1/2 acre lot that has a tax value of $32,000 which we are going to offer $25,000 on. Is there any way to get 100% financing on this land?
July 8th, 2011 at 12:28 am
Clayton – The short answer is no. Nowadays, the typical down payment ranges from 20% all the way up to 50% to be quite honest.
Crystal – I have sent you an email. While a 35% down payment is not unreasonable for such a loan, you should be able to do better.
Jennifer – In general, land loans are considered hard money loans (it didn’t use to be like that), and that is why your bank is offering such terms. A suggestion that I could offer is refinancing your home loan and using part of the equity to purchase the land. That way, you would be able to enter into a new mortgage, and the terms for home mortgages are way more favorable.
Emmanuel – I would need to know more about the type of loan and land in order to assist you.
Thank you all for your questions!
July 11th, 2011 at 12:33 pm
Hi Dave,Type of loan,secured term loan based on security/executor of the 10Acre Beach Property,in the Republic of Seychelles (Mahe)
July 16th, 2011 at 4:22 pm
i got almost an acre lot and want to know where could i borrow money on it
July 18th, 2011 at 2:59 pm
Dear Dave,
My husband & I recently found a 1.5 acre waterfront lot (Massachusetts)for sale by owner at a very good price of $110,000. There is currently a house on it that needs to be torn down or possibly gutted; this is where we would like to build our future home. We have $40K to put down, but are unable to get financing for the remaining $70K from a bank because we just bought a business last year. There is a small possibility that the seller would finance, but at a very high rate of 15% for only 2 years. We do not have much equity in our house because we bought it in 2006 when everything was up. We have approached family for help to no avail. We are looking into any type of creative financing that we can come up with: even credit cards (don’t want to do that). We do not want to lose this opportunity & appreciate any suggestions you might have … Thank you kindly, Renae
July 27th, 2011 at 5:19 pm
Dave,
First of all, great website – good to see there are others with many questions.
We have a Bank of America Land Lot Loan on a residential site at a very nice golf community in North Carolina. It has new condos, a new amenity center, new pool, beautiful golf course, etc but very few homes built yet. We received a modified loan from B of A a year ago, but our payments actually went up, not down. The only good thing is that it went from an interest only loan to where we now pay some principal. We cannot for the life of us sell the lot. We bought it in 2005 and have tried literally everything to sell it for 3 years. Our last resort would be to take a $50k plus hit on it and sell it for half of what we paid.
Are there any other resources out there that could help us modify or refinance? Someday it will be worth more, but not for a while until they start building again.
We have incredible credit and have always paid on time, but it’s a struggle to continue paying for this land.
Any suggestions would be welcome!!
Thanks much!!
August 18th, 2011 at 8:26 pm
Dave, my wife and i are interested in buying land in our hometown… We currently sold our house just this past weekend, but made nothing on it.. we have No debt, but we also have no savings as of yet… my wife also just got a promotion, and we are living for the next few months with my parents to save money… There is a 10 acre lot in Mechanicsville, Va for $139,950… i’m guessing that there is no way to purchase this property without 20-50 percent down or is there a way?? our credit scores are excellent, what can we do to make this dream possible?
August 27th, 2011 at 4:53 am
Dave, great site! Very helpful. I’ve been approved for a 150,000 land loan on about 27 acres in Ga. it’s a 15 year with a 5 year maturation at 5.5% apr. I just was wondering if a bank is going to be hesitant to give me a construction loan if I’m only planning on spendidng about 200k building the house. I’d like for them to include the remaining land principal in the final mortgage, or even in the construction loan. What are your thoughts? Shoot me an email. Again, awesome, extremely helpful site – you’re a good man.
September 27th, 2011 at 4:56 pm
I have a $77,343.04 15 year land loan w/a 7.7 interest rate w/BB&T in NC. The value of the land is $140,000.00 I would like to refinance for a lower payment. I have a 780 credit score. Do you know of any banks I could contact?
October 6th, 2011 at 10:24 pm
Dave,
My wife and are have located a six acre parcel of land in an affluent area of West St. Louis Co MO. The asking price is aprrox 200,000. In speaking to the owner, he has been candid with us and stated the bank is calling in his loan. He believes we could purchase the property far lower than the asking price. The property appraisal should come in around 30,000 to 40,000 per acre. I am looking for AT LEAST an 80% loan. We will be building a home on the property at an undetermined future date. Can you direct me to a lender(s)??
October 12th, 2011 at 7:03 pm
Jim and Bonnie – I will do my best to connect you with some lenders. Working on it now so it shouldn’t take too long.
Paul – Thank you for your kind comments. I am almost certain that the bank will gladly give you the construction loan, since it will increase the value of your property. And yes, I would definitely get them to include the land principal in the newly negotiated mortgage!
E.I. Jones – I would say that there is no way to get away with it without at least a 20-25% down payment, but as always, it depends on your situation. I will try to get you in touch with some lenders.
November 13th, 2011 at 5:43 pm
We are looking to build a house- but do not want to go through a traditional builder- we think it would be cheaper to purchase the land, and then hire a contractor to build the house. So, essentially, do two separate loans- one for the land and one for the house. And, put one in each (me & my husband’s) names. Does that make sense? Part of the issue is that I am not sure that we would qualify for everything all lumped together. The lots we are looking at are in town (Atlanta) and are expensive- ranging $150k-$250k. And, I believe we will be looking at $300-$350k to build the house we want. We would prefer to keep the downpayment as low as possible.
Also, I have heard that a lot of banks are no longer doing new construction loans- any thoughts on that? Thanks for your insight.
November 14th, 2011 at 9:04 pm
Hi,
We have found a 1.75 acre lot for $54,000 that is sale by owner in NC where we would like to build our house sometime in the future. Are there any banks in NC that do land loans with reasonable terms? How do we go about negotiating price with the owner to bring the price down?
Thank you!
November 18th, 2011 at 10:31 pm
Dave,
I have had the property where I reside leased for several years. It’s 94 acres and I have a modular home on it. The owner recently offered to sell me the property. I have a poor credit score and was wondering what options were available.