Q&A for How to Buy Raw Land

Many land purchases can be financed directly through the seller. Land purchases through a lender are more difficult but you can check with a lender who is willing to take on the risk. Having more equity in the land, good credit, and reliable income will help. Getting a construction loan to purchase the land then build a house is another option to consider.

It would be best to contact an attorney to assess the validity of the transaction and whether the person who sold it had the right to sell the property in the first place. If he had the right to sell it, the attorney may be able to enforce the transaction and force the seller into delivering the deed to you for recording.

It is best to work with a Realtor to help you locate raw land suitable for your intended purpose. The seller typically pays for the commission in the United States unless it is a For Sale By Owner, then it is negotiable between the two.

You will need to determine the size of the home, how much of a lot you need, and what the requirements of the property itself is. Typically a quarter acre would be a minimum lot size for a home size that would be typical of six bedrooms but you may need to go larger if you want to have more things like a garden area, patio, pool, other amenities on the lot or if there are nonbuildable areas on the lot too.

It would not be typical to pay for a purchase of land with a credit card. The money needs to be funded to the seller upon closing. When the money is deposited into the trust account for disbursement to the seller, it is customary to either wire the money into their trust account or provide a cashier check the day before closing. A credit card could be used to obtain a cash withdrawal to pay for the land but it cannot be used if getting a loan too without disclosing and obtaining approval from the lender because it will change the debt to income ratios and may affect the qualifying. Discuss all potential payment options with a lender and be prepared to pay with cash or a loan either from credit card or loaning institution or seller financing. A credit card may have higher interest rates too so check with a lender for your best options.