Texas is a state that is rich in beautiful and diverse farm land, cattle ranches and other industries including timber. Finding the right property is the first step in the buying process. The second is obtaining the necessary education regarding State regulations and requirements; both of which can be challenging especially for a first time land buyer. If you have been contemplating purchasing land in Texas, you will definitely want to consider using an auction company. The knowledgeable professionals at Central Texas Auction Services have real estate experts on staff to answer your questions and ensure that your transaction is completed seamlessly.
Some of the Most Commonly Asked Questions About Buying Land in Texas Include:
How do I finance a land purchase in Texas? The purchase of raw land is very different from the purchase of land that is zoned for residential use. Regular banking institutions typically don’t approve raw land loans so instead look at farm credit institutions who are the experts when it comes to purchasing rural land. Your credit advisor will take the time to walk you through the loan approval process including explaining the necessary insurance requirements and any tax discounts that you may be eligible for.
How is a raw land loan different from a home mortgage in Texas? Financial institutions that offer land loans typically require a higher down payment than mortgages for primary residents. The length of the loan and the interest rate can vary depending on the size of the loan and the amount of the down payment. For example most farm credit institutions will finance a purchase of 10 acres or more for 5 to 30 years with different interest rates available depending on your eligibility.
What can I expect to pay in closing costs on Texas land purchases? Once you have decided on a lender, the loan officer that is assigned to your case will discuss the closing costs with you. For example:
• You can generally expect to pay 20% of the full purchase price as a down payment
• Other closing costs can range from between 1.2 to 1.5% of the total loan
• The cost of the title policy is set by the state along with deed recording fees which may vary from county to county.
What Kinds of Property Tax Exemptions are Available for Rural Landowners in Texas?
Landowners in Texas may qualify for an agricultural, timber or wildlife exemption which can potentially reduce the amount of your annual property taxes by several thousand dollars. Your local tax office can explain which properties qualify for the exemption.
Am I Required to Purchase Insurance on Vacant Land in Texas?
Insurance is only required is there is a structure or the land. A title policy however will be required by the lender holding the note on your loan. Title insurance is a one-time purchase that will protect your interests should any liens or other encumbrances appear at a later date. The title company will be responsible for either resolving the problem and/or recovering your costs.
Buying & Selling Raw Land in Belton, Killeen, Temple & Central Texas
Educating yourself about the purchase of land in Texas requires a lot of steps to ensure that you are successful but the end result is certainly worth the effort. For more information regarding purchasing land at auction, contact the professional auctioneers and real estate specialists at Central Texas Auction Services today.
