The Purpose of This Guide
If you own a property in the State of Texas, and you are considering selling it, then this guide is for you. Would you like to learn how to sell this property yourself and save on realtors’ commissions? Or maybe, you would simply like to become a more informed seller when choosing a broker/agent to work with? In either case, this tutorial is for you!
In this tutorial, we will address many common questions that we encounter when asked how to sell land in the State of Texas.
“1 Million Dollars!”
Great assets to have.
There are three common types of deeds used in the State of Texas.
The only way to gain ownership of land is by the Deeding Process.
If you own land that you would like to sell, at some point you will want to see a map of the property lines.
A Survey provides an exact measurement, marking, and mapping of any parcel of land.
Land is quite a bit different from houses, and often, a lot simpler to sell. Here’s the step-by-step process.
How to Value My Land in Texas
One of the first questions asked when a person decides to sell their unwanted land is “How much is it worth?” The simplest answer when asked this; is to simply say “1 Million Dollars!”
All sarcasm aside, as a seller, you would like to sell your land for the highest possible price, without it sitting on the market forever. If that is true, then there is no cookie-cutter response with an exact per acre price. The value of land can vary from parcel to parcel depending greatly on the location, access, topography, and improvements. There are even cases where two properties similar in size are available in the same county at drastically different prices due to the aforementioned factors.
So, where do we start?
The first step for finding the value of your land is to look at land comps. Land ‘comps’ is an abbreviation for comparable properties. In other words, parcels of land in the same geographical area, of roughly the same size and characteristics that have recently sold, or are currently for sale. Remember in this search that proximity and up-to-date information is very important. A property sold 18 months ago, or in another part of the county, could reflect a completely different value from the conditions of today’s real estate market. The land selling market can change substantially within 6-12 months.
As a general rule, you want to look for a size range similar to your property; for instance, if you have a 20-acre property, you would search for properties in the 15-30 acre range for comps. In addition, the features of the land can be very important. A piece of land with cleared pasture and tillable fields and a property that is completely covered in thick woodlands would represent two distinctly different prices. Try your best to compare apples to apples.
How do we do this? In the State of Texas, all the real estate sales (by law) are non-disclosure. This means that the actual sales price of real estate does not need to be revealed on public record. This can make it hard to find actual sales data (Note that some real estate brokers can provide you with this information). However, you can do a study using the comparable properties that are currently for sale.
If you have an internet connection, you can navigate to www.Zillow.com or www.landwatch.com to see properties that are for sale in the local market within the region that your land is located. Once you navigate to Zillow for instance, there is a “More” button on the search bar where you can select the property acreage and other features. While you search for a property of your choice, make sure to choose only “Lots and Land” from the search filters, so that you your search results will not be filled with houses.
Something to keep in mind here is that you want realistic data. From the asking price to the actual sales price, there can be a LOT of negotiation in a real estate transaction. Therefore, keep in mind that the advertised price of a property is not necessarily the price it will sell for. It can be best to look at the more recently posted listings (from the last 60 days), and ignore the ones that have been on the market for much longer- assuming that they could be slow to sell because they are overpriced.
You can then make a list of multiple properties. I usually divide the total asking price by the number of acres to find the price per acre. For a decent evaluation, a list of 20 properties is a good start. Use a little math to average these numbers, or an excel or google sheets formula.
This is simply a market evaluation, but keep in mind that it is not a guarantee. The truth about the value of your land is that it is worth whatever someone is willing to pay you for it. If your land is landlocked, for instance, with no legal way to access it, then it could potentially be worth very little—be realistic. The goal here is to sell your property, not just advertise it eternally.
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Do I Have to Have a Realtor to Sell My Texas Land?
Real Estate agents and brokers can be a great asset when selling your land in Texas. Although using a licensed real estate agent can be a great way to sell your property, you are by no means obligated to sell through them. You can 100% sell your land yourself in the state of Texas.
Let me be clear, you can legally market and sell any property that you have an equitable interest in without a real estate license. This means that if you own vacant land (or even land with a home on it), or if you are a partial owner of the said land, you can advertise, market, show it to potential buyers, and sell it without any realtor involved.
There are some things to consider if you decide to sell yourself. One of the benefits is obvious; you don’t have to pay real estate commissions. Agent commissions to sell land can often be 10% or more of the total sales price, so this can help save you money! However, you will want to keep in mind the value of your time.
Marketing and selling land yourself can involve: ordering land photography, creating an online listing, following up with potential buyers, accessing plat maps of the property lines, answering questions and phone calls, and ultimately, meeting interested parties at the land to show it to them. You will also need to have the contract documents for the buyer to sign in order to send to the Title Company to complete the sale.
Selling with a Realtor can be a good option for a busy person that doesn’t want to spend hours upon hours with the advertising of the property, and dealing with cumbersome legal contracts. The important thing to remember is this; not all real estate agents were are alike. Many of them specialize in home sales, and since they work on commissions, they are not interested in relatively small commissions available to them from the sale of a low priced piece of land. These types of agents, even if they do agree to list the land for sale, often do not know how to market or show land to the correct type of buyers. If listing with an agent, I would recommend using a Land Broker. These are brokerages that specialize in listing land. They often have a better sense of how to market the land and are better prepared to answer buyer’s questions.
A final, and often unknown way of selling land without a realtor is to sell it yourself directly to a land investor. Land investors are land buyers. These individuals represent companies that buy vacant land as an investment, whether in speculation of future growth, or with plans to improve or develop the land for other uses. Since they are experienced land buyers, they will research the property themselves, and make you a no-frills cash offer. Due to the fact that consumers often have a hard time finding financing to buy your land, a land buyer’s cash offer can be an attractive choice, if you want to sell the land quickly and easily. One final benefit of selling land this way is that the investor will walk you through the paperwork and often cover all the transaction costs.
To get cash offers for your land, you can go to www.checklands.com and fill out their online form.
As I prepare to sell my land, what type of deed is best? Quitclaim or Warranty Deed?
The anatomy of a land sale in the State of Texas at its simplest level boils down to an exchange of funds between two parties, and a property being “deeded” to another person. The “deed” is a legal document that names a Grantor, which is the person selling the land, and a Grantee, which is the person that is buying the land. This document is signed and notarized by the seller, and recorded in the public records at the county clerk’s office. Although this process sounds simple enough, there can often be confusion about the type of deed needed. This article should help you to clarify that confusion.
There are three common types of deeds used in the State of Texas.
- Texas Quitclaim Deed.
Although often mistakenly referred to as a “Quick-claim”, this deed is known as a “Quitclaim” for a reason. Following its namesake, it is actually used by one person to ‘quit’ their claim of title or interest in a property, without warranty as to the ownership. What this essentially means is that if one person legally owns a property with a good chain of title (meaning it was bought and sold cleanly and legally by all parties before them), and quitclaims it to you, then you would own the property. However, one could nefariously quitclaim you something that they don’t even own. A perfect example of this would be for you to quitclaim your ownership of the Golden Gate Bridge to someone! In the legal terms of the Quitclaim deed, it actually says that the Grantor (seller) quits any claim or right of title to the Grantee (buyer), that they have in the property, IF ANY.
In summary, this type of deed is the least desirable. Many title companies in Texas will not even insure the sale of a property with a Quitclaim deed. That being said, there are legitimate uses for the Quitclaim, like when an individual deeds their personal property into a business they own, they would often use a Quitclaim. In summary, if you have a quitclaim deed for your land, then I would highly recommend consulting with a real estate Attorney about closing the sale of that land in order to ensure that it is done correctly.
- Texas Special Warranty Deed
The Special Warranty Deed is an instrument that is commonly used to sell and transfer ownership of land with a limited warranty of title. What this means is that, the Grantor (seller) is saying through this document that they guarantee that they own the property, can sell their rights to it, and that there have been no other claims, disputes, or liens against title, while they have owned the property.
With proper title research completed by a licensed Title Company or Real Estate Attorney, this type of deed can be insured and is a valid instrument for buying and selling real estate. Do keep in mind that, due to the limited nature of its warranty, the end buyer will generally request a title search and title insurance when buying the property.
- Texas Warranty Deed
The Warranty Deed is the best type of instrument with which you can hold ownership of land in the State of Texas. A Warranty Deed is a document often used to hold title to real estate, which provides the most protection to the purchaser (or title holder) of the property. It pledges or warrants that the grantor owns the property free and clear from liens, mortgages, or any other encumbrances, and that the Grantor (seller) will guarantee clear ownership of said property throughout the past chain of title.
It is important to remember that each Warranty Deed can be worded differently, and that the protections it offers will only apply to the property described in the legal description written on the document. This warranty will also be subject to any covenants or conditions mentioned on the deed. The Warranty Deed, however, is generally considered the best type of title with which to own property.
In regards to the use of these three types of deeds in the buying or selling process, it is highly recommend that you contract the services of a Real Estate Attorney to create and/or review any of these documents for you.
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Preparing to Sell My Land - How to Verify Ownership of a Parcel of Land in Texas
Before you buy or sell land in the State of Texas, it is important that you verify ownership at the county level. I often work with people who have inherited land, but since ownership has not been properly passed to them, they are not able to sell it. The only way to gain ownership of land is by the Deeding Process. Even if your relative left it to you in their Will, it is not yours until probate is completed and the property is deeded into your name. The good news is that the county has up-to-date records of these transactions, which are available and open to the public.
The first place to go to verify ownership of land is the County Assessor’s’ website. In the State of Texas, nearly every County’s Assessor website can be accessed by searching with Google for the county name with the letters “CAD” after it. An example would be to search for the Rusk County Assessor site by typing in “Rusk County TX CAD.”
Although each county’s format will vary, there is a typically “property search” button located somewhere on this site. Once in the search tab, you can search using various parameters;
-Parcel Number (APN)
-The Owners Name
-The Property Address
The County Assessor keeps up-to-date ownership information along with their estimated valuation of the land for tax purposes. Each year, they send a tax bill out to the owner on record, at the address listed on this CAD website. Once you find the property you are looking for, you will see many pieces of information, including the owner’s name, and usually the last transfer date (which indicates when they bought the property).
It is worth noting that some counties in rural Texas are not as technologically advanced as others, which causes them to be very slow in updating the ownership information on the Assessor’s website. Certain counties in West Texas only do this once a year! In these counties, if the property was recently purchased (within the past year), then the new owner’s information will not show up on the Assessors’ CAD website. In this case, you would simply need to call the County Clerk’s office and ask for the Recorder of Deeds. By providing them with the current owner’s name, they can look up the deed and tell you who the current legal owner of the property is.
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How to Find My Property Lines
If you own land that you would like to sell, at some point you will want to see a map of the property lines. This, in real estate terms, is generally called a “plat.” When much of the United States was settled, the newly formed state governments sent surveyors out to “plat” the land. Much of the State of Texas was platted in what is called Townships, Blocks, and Sections. The smallest of these units is called a section, and represents a one square mile of land containing 640 acres.
When the land was originally surveyed, the surveyors created paper plat map drawings of each of these sections. These original plats still exist in the county archives at the recorder’s office. You could potentially find your property lines laid out on these plats, but it would be very hard to understand where these boundaries are physically located on your property. However, the good news is that there are easier ways to find the location of your property lines:
Use the county GIS (digital plat map)
Technology has definitely made our lives easier in so many ways, and reading plat maps is one of them. Nearly every county in the State of Texas now has its plat maps overlaid in a GIS mapping system. GIS is an abbreviation for Geographical Information System. This is a free, online mapping system that shows a birds-eye view of the property lines of each individual property.
You can find these by searching for the County Assessor’s website; Google search for the county name with CAD at the end (i.e. Henderson CAD). Once on this site, you can look up the property using the Parcel Number or Owner’s name. By clicking on the search result, you will see a property record card where there is usually an option to “see in map,” or “open in map.” Click on this link and you will be taken to the GIS system where you can see a highlight of the property lines.
Within the GIS interactive mapping system, you can navigate to the map layer filters. There, you can select satellite imagery as your base map, which allows you to see a satellite photo ariel view of the property. This can help you to visualize where the property line is actually located in reference to landmarks like; trees, fences, roads, etc. Please keep in mind that the property lines that appear on these satellite images have a margin of error and can often be off mark by as much as 20 feet or more.
Locating your property lines through the GIS system is a great visual aid to help you understand roughly where your property lines lie, and also provides a great way to see the shape and layout of your land. Although these types of map images are often used in advertising land for sale, they DO NOT replace a professional boundary survey.
What is a Land Survey?
When selling land, the buyer will often ask if there is a survey on record for the property. Maybe you have heard of the term, but never truly understood why it is necessary, and more specifically; do you need to pay for this when selling your land?
Let me first start by explaining what a survey is: A Survey provides an exact measurement, marking, and mapping of any parcel of land.
There are actually two common types of surveys used in vacant land; the Boundary Survey, and the Topographical survey. A Simple way to differentiate these two is to remember that the Boundary Survey is used to measure the area and shape of land – two dimensions. The Topographical Survey actually measures the topography, or three-dimensional layout of the land. Topographical surveys are usually required when land is going to be developed, and roads, parking lots, buildings, and drainages are planned.
Of these two types of survey, the most commonly needed for a person who is selling their land is the Boundary Survey.
As previously mentioned, when land in Texas was originally occupied and developed, it was subdivided into Townships, Blocks, and Sections. The smallest of these units is called a Section, which represents one square mile of land. The maps of these divisions are on file at the County Recorder’s office, and in most cases, the corners of these one-mile square ‘Sections’ are marked with iron rods or stakes.
Over the years, people sold off land from these sections in smaller and smaller parcels, with ‘legal descriptions’ on the deed that describes precisely where the land is located (within that section). What your buyer is requesting when they ask you for a survey is a precise reading and physical marking of the property lines and corners.
In order for a Land Surveyors to do business in the State of Texas, they must be licensed by the Board of Professional Engineers and Surveyors. Before hiring one, you can look up the status of their licensing here: https://pels.texas.gov/
Upon ordering a Boundary Survey, the surveyor will search county records to look up the legal description found on your deed, and any county plat maps or maps of subdivision needed. They will then physically visit your land, and locate iron marking rods on your property, or measure off of markings on nearby properties in order to find a point of reference. The surveyors operate in a two-man team using tools called a Total Station and Prism to physically draw out the angles and borders of your property from the deed onto the physical ground. They will then place Iron rods or stakes at key measuring points along the property lines.
After the site visit, the surveyor will create a ‘Survey map’ of the layout of the property, along with structures or nearby roadways. This map will show the exact dimensions of the sides of the property, along with any access easements that cross the property. This map always includes the official seal and contact information of the surveyor, and should be recorded along with the deed at the County Clerk or Recorder’s office.
Having a recent survey of the property can be a good selling point when selling your land, but it is by no means a requirement. You are not required to provide a survey when selling vacant land as long as you disclose the fact that no survey has been done. Some buyers will ask for a survey, in order to have the assurance of the exact dimensions of the property. This is negotiable, and you can either provide it, choose not to provide it, or offer to split the cost with the buyer, depending on your preference.
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How to Prepare My Land for Sale in Texas
If you have vacant land that you would like to sell, maybe you have asked yourself if there is any prep work you need to do in order to prepare it for sale? When we think of selling real estate, we often think of a house, where we might need to paint the walls, fix the roof, and do some landscaping to improve its ‘curb appeal’ before advertising for sale. Land is quite a bit different from houses, and often, a lot simpler to sell. With that in mind, there are a few things that could potentially help with the sale of your land:
If your land contains any open or grassy areas, then keeping them mowed will be important. Even mowing along the sides of the driveway, along the sides of the road, and any other key areas can help a potential buyer to be able to view the land much easier. The sight of a mowed lot can often project a well-kept look to the buyer and even help them to better envision potential building and development sites.
Many parcels of vacant land in forested areas slowly become overgrown with underbrush, which can make it practically impossible for a potential buyer to walk the land or see it clearly. Even if the land in question is a large parcel, having thick brush along the roadways can make it appear much smaller in size and less appealing. By clearing this underbrush out, you will help buyers to get a clearer picture of the size, layout, and slope of the land. This, in turn, can help them decide to make an offer. Please note that clearing brush can be very hard and potentially dangerous work: one must watch out for snakes, poison ivy, and thorns bushes. It is best to hire a crew with brush-cutting machinery to clear the property for you.
Adding an Entrance
If the land you would like to sell is along a county roadway, you should have a driveway entrance to the property with a culvert. What does this mean?
Along the sides of most roadways, there are drainage ditches that divert water from the road during heavy rains. Where a driveway entrance goes from the road to the property, a large-diameter piece of metal pipe called a ‘culvert’ is laid along the drainage ditch and then covered over with dirt and gravel. The gravel or concrete driveway goes on top of this, and provides good access to the land as well as a clear path for water to drain during rains.
Please be aware that in most counties, putting in a culvert and driveway entrance will require a building or excavating permit. Please contact the county and a local professional to do this job. Although, it may cost you some time and money, this simple improvement can improve the value and marketability of your land.
One of the top questions asked by parties interested in buying a parcel of land is “Are there utility connections?” People often look to buy a parcel of land with the dream of building their future house or cabin on the property. In order to do this, they will need electric, water, and sewer lines (or a septic tank).
Just because the electrical or water lines run near the property does not mean that the land is ready to build on. A landowner must actually request a metered feed to be run off the main lines and to a meter base on the property. This entails contacting the utility company, applying for this service, and paying a fee. Keep in mind that many land buyers are looking for something that they can start to build on or use right away, and the hassle and expense of going through this process can put a damper on their excitement about buying your land. Ready-to-go metered utility connections already on the property are seen as a positive feature when selling land.
Percolation (Perc) Test
If your land is rural and there is no city sewer access running to the property, the buyer will have to install a septic tank in order to live on the property. Before installing a septic system, most counties require a ‘Perc’ test. This test entails a county official digging a series of small holes in the ground at the property that they fill with water. A timed measurement is then taken of how fast the water drains into the surrounding soil. Based on the results of this test, the land is ‘Perked’ for a specific sized septic system. The size of the septic system allowed will determine the size of the dwelling that can be built on the land by the end buyer. For this reason, many buyers with future home building plans will ask to see an approved ‘Perc’ test before making an offer on your land.
What is the process of selling your land through an Attorney or Title company sale?
If you are selling your vacant land in the State of Texas, maybe you have wondered what exactly the Title Company or Real Estate Attorney that closes the sale will provide? What does this process look like? Although, some transactions can differ, there are a few general steps that nearly all land sales will go through:
The first step to any land sale transaction is to find a buyer and come to an agreement on the sales price. Although real estate agents often require offers to be made in written form, you can also come to an agreement verbally. No matter how your offer is made, a purchase agreement is then created.
The purchase agreement used for a land sale can be as simple as a two-page document, or in some cases much longer, but it must include a few key details:
-The Buyer and Seller’s names and contact information.
-The Parcel number and legal description of the land.
– The agreed-upon purchasing price.
– Who will cover the closing costs/ how they will be split.
– Any down payment to be held in escrow.
– The terms and consequences of canceling or backing out of this contract.
– The closing date for this transaction (Often 30-60 days for a land sale).
Note that both parties must sign the purchase agreement for it to be valid, and that this is a legally binding document. If you sign a purchase agreement with one buyer and then attempt to sell to another while that agreement is still in effect, the buyer could potentially sue you.
Once this agreement is signed by both parties, it is taken to the Title Company or Real Estate Attorney along with the down payment check (if applicable) to begin the closing process.
The most common way to buy or sell land is with Title Insurance. The Title company, after receiving your purchase agreement and opening a file, will begin to review the chain of title for the land. Usually, within 1-3 weeks, they will send you a Commitment for Title Insurance, also known as a Title Commitment.
This document will simply state some information about the title insurance policy provicer, as well as include a schedule A, B, C with information about the owner of the property and if they are able to provide title insurance for the sale.
Generally, if the title insurance company found some problems with the chain of title (past owners), then they will not be able to insure title and essentially kill the sale. In this case, there are often corrective steps that can be taken to fix these and sell the property.
Closing date/ Closing packet
After a Title Commitment is sent out indicating insurable title, the buyer and seller are notified of a closing date. Please note that for most closings, it is not necessary for either the buyer or the seller to be present at the Title Companies office, if they should so choose. Simply ask your Title Company for a remote closing packet.
About two or three days before the closing date, bother seller and buyer will receive a Settlement Statement, also known as a Hud Statement. This document is simply a spreadsheet that breaks down the sales price, and offers a line-by-line breakdown of the transactional costs. Some items listed will be; agent commissions, title insurance, recording fees, deed creation fees, escrow fees, and property taxes due at the closing. There is a line at the bottom that says “due from buyer,” and “due to seller,” which show the exact amount the buyer must pay, and the payout that the seller will receive at closing.
The Seller will receive a Deed transferring the property from their name to the buyer, which they must sign in front of a licensed Notary Public. If done remotely, the seller will need to send the deed back to the title company via a FedEx envelope.
The buyer will also receive bank-wiring instructions with the total amount that they need to wire to the Title Company or Attorney’s transaction account. The money will be held in escrow until the title company receives the signed and executed deed back from the seller.
Payment and possession
Once the Title Company or Attorney receives the wire transfer from the buyer and the signed and executed deed back from the seller, they will pay the seller their share of the sales proceeds, according to the numbers stated on the Settlement Statement.
The final step is to record the deed. All real estate transfers are officially recorded at the County Clerk’s or Recorder’s office. This records the transaction on public record. The Title Company will proceed to record the original deed with the County Clerk, who will then send the original out to the buyer by mail after the recording is completed.
The buyer now is the official owner of the property and will not only have possession, but also, be responsible for any future real estate taxes.
This guide does not represent legal counsel, but has only been for educational purposes. For state-specific information about selling your land, or to be connected directly with a network of cash buyers, please visit www.checklands.com
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