Congratulations! Now that you’ve found your dream property, what’s next? Sometimes, buying land in Texas can be complex, especially when calculating the additional fees you need to pay on the property. Closing costs are one of the final steps you’ll face when buying your land.
Keep reading to learn more about closing costs on land sales, who pays for them, and how much they cost.
What Are Closing Costs?
Closing costs are extra expenses you settle at the final stages of buying your land. Some of these costs include legal, administrative, and financing fees. However, they don’t include the actual cost of the land. Typically, you pay the closing costs at the end of the land purchasing process before you become the land owner.
Closing costs are also important when the seller legally transfers the land to you. Although settling these costs might seem complicated, your purchase may not be legally binding until you do, and the property transfer process could face delays if these fees are not paid. The good news is that by working with a land developer and utilizing owner financing, you can avoid certain closing costs and streamline the closing process.
What Do Closing Costs Include?
Several costs add up to the total closing costs when you’re finalizing the payments for your land. Both you and the seller pay different fees, some of which include:
What You Might Owe
- Appraisal fees
- Credit report fees
- Prepaid costs
- Loan application fees
What the Seller Might Owe
- Attorney fees
- Real estate agent commission
- Seller concession
- Mortgage payoff
- Outstanding bills
What You Both May Owe
- Title insurance
- Notary fees
- Escrow fees
- Municipal lien search
- Prorated property tax
- Recording fees
What Can I Expect to Pay in Closing Costs When Buying Land?
We’ve discussed what types of costs you may expect to pay on land sales in Texas, but that probably hasn’t done much good when it comes to giving you an idea of what you’ll actually pay. The good news is that these expenses typically fall within an average range. The closing costs on land sales often range between 2% and 6% of the land’s price. However, this varies depending on the property’s value, location, and the services required during the land purchase process.
Ways to Save Money on Closing Costs
One way to save money on closing costs is through owner financing. When you buy owner-financed land, you can cut costs like credit report checks, loan application fees, and other administrative expenses. Owner financing is also a great option if you have credit issues and want to avoid a long approval process. If you’re looking for the most convenient and accessible way to buy land in Texas, reach out to our team to learn more about owner-financing options.
Find the Right Land for Sale with SRC Land
Although there are several important decisions to make before paying closing costs, the most important part is to find the right land that suits your needs. Here at SRC Land, our land development experts can help you identify what to look for and pinpoint the right plot.
At SRC Land, our team will guide you through your land purchase journey and help you get the financing you need. With decades of experience in land development, we will help you make the best decisions.
Begin your land-buying journey in Texas with SRC Land today!
