How owner financing works for land purchases, including typical terms, how to negotiate, and when it makes sense for both buyers and sellers.
According to LandSquatch data covering 198,170+ properties across Georgia and Florida, understanding owner financing land purchase is essential for making informed land investment decisions.
Owner financing (also called seller financing) is when the land seller acts as the lender. Instead of getting a bank loan, you make monthly payments directly to the seller. This is common in land transactions because many banks won't finance raw land. Typical terms include 10-20% down, 7-12% interest, and 5-10 year terms.
Faster closing (no bank approval needed), lower closing costs, flexible terms negotiable between buyer and seller, accessible to buyers who may not qualify for traditional financing, and no appraisal requirement. For sellers, it provides steady income and potentially a higher sale price.
Higher interest rates than bank loans, potential balloon payments, ensuring the seller actually holds clear title, getting the contract recorded with the county, and understanding default terms. Always use a real estate attorney to review the contract and ensure your payments are building equity, not just paying interest.
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