Owner Financing

6 Ways to Get Your Land Sold Faster

  • Title Search & Title Insurance

This is the first thing you should do before putting your property on the market. If you did not do this when you purchased or inherited the property there is no better time than right now. Issues such as access and un-discharged mortgages to name two could cost you a sale, money or both. If any issues are discovered correct them now. A cursory title exam should cost from $400 - $750.

  • Survey

Do this when you purchase. If the seller has not already done so, try to negotiate this as part of the sale. Once done, be diligent about keeping the boundary lines cleared and painted. Occasional maintenance will save thousands of dollars later. Survey cost will run from $1,000 and up depending on the size of the lot and other factors.

  • Soil Test

Most every buyer asks if this has been done before coming to visit a property. Take this issue off the negotiating table by being proactive. A preliminary soil test in a choice location will satisfy most buyers. Cost will range from $250 for a preliminary to $400 - $750 for  full septic system design.

  • Offer Owner Financing

If you have no immediate need for cash, holding paper is an option which could help sell your land faster and for more money. Conventional banks often require down payments beyond the means of many buyers. Your reward will be a rate of interest much greater than the current rates on CD's, savings accounts and bonds. Hire a professional to help set this up and comply with government regulations regarding private financing.

  • Walking Trails/Clearings/Food Plots

A day or two of work on your land creating access trails, clearings to open views and establishing food plots for game is sweat equity worth the time investment. Potential buyers don't want bushes hitting them in the face any more than you do. Cost - Your time and equipment; $600 and up if you hire it done.

  • Driveways & Access Roads

Being able to drive onto a property is a BIG plus for most potential buyers. If your property has a driveway or existing road system maintain it over time. Consult a land professional before starting this project. DOT driveway permits and other issues may apply. The cost will vary widely depending on slopes, required culverts, the availability of local gravel and other factors.

Comments

  1. Mark on

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    Ocean, Lake, River or Stream - Maine Waterfront Property New England's Lowest Prices

     

    Maine Lakes and Ponds

    Maine Wild Trout Ponds

     

    Looking for an affordable waterfront vacation property or a second home spot in the northeastern United States, Maine is your best buy for both purchase price and lower development costs. In some areas of Maine it is currently possible to purchase a lakefront lot for as little as $30,000. Some fine riverfront land can be had for as little as $20,000. Salt water property along the northern Maine coast on bays and tidal rivers can be purchased under $40,000. Bold ocean front is cheap when compared to the other New England states. In Maine's northern interior it is not uncommon to find a 40 acre backwoods lot with a little stream flowing through it for under $35,000. Some of the land for sale is offered with reasonable owner financing.

    Compared to other New England states, rural areas of Maine have less permitting and the associated hassle and fees. The unorganized territories of Maine have very low property tax rates and a standardized low cost building permit application process. The small organized municipalities are not subject to code requirements found in the larger towns and cities. Building what you want, the way you want to, is still possible here.

     

    Union River

    Maine scenic rivers

     

    Most of the rural areas have a major service town or small city to provide culture, shopping and needed services. Areas near Augusta, Waterville, Newport, Bangor, Lincoln, Millinocket, and Houlton are all easily accessible along I-95. Drive a short distance out of these service towns, and you will begin to find waterfront land prices mentioned above.

    Along the coast of Maine and Route 1, service towns like Rockland, Rockport, Camden, Belfast, Bucksport, Blue Hill, Ellsworth, Machias, Lubec and Eastport have many nearby rural communities with clean and scenic rivers, lakes, ponds and the most undeveloped coastline you can find in the northeast.

     

    Maine Bold Coast

    Maine's Bold Coastline

     

     

    Of all the New England states, Maine is blessed with an abundance of waterfront in nearly every region of the state. The costs savings, cleaner environment, and freedom to do your own thing make the longer drive well worth it.

    Comments

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    Owner Financing Maine Land

    If you are interested in buying Maine land with owner financing find some great land parcels at our listing page. Are you trying to sell your land? Maybe you should try financing your Maine land sale. Why should you consider this option? Because owner financing can help get your land sold faster and earn you more money. Here are a few reasons why and other things you should know.

    Most Banks Don't Offer Land Financing

    When a buyer for Maine land is looking for options to finance their purchase they usually start with the bank that holds their checking and savings accounts. In many cases, if the acreage of the parcel is larger than a simple house lot, the lender will not consider the loan. If they do interest rates may be high, or worse, the down payment requirement is not reasonable.

    Specialty property types such as Maine timberland investments, hunting/fishing/recreational land, larger waterfront land parcels, farmland and other large acreage properties can be difficult to secure financing for. In Maine there are traditional banks and credit unions that offer attractive terms for land. However, the average buyer looking to purchase land will not know who those lenders are and will often get frustrated with the search. They will naturally look for ways to make the process cheaper or less complicated.

    Buyers Prefer Owner Financing

    Many buyers prefer the ease and speed that owner financing allows them to purchase land, so they search land for sale with such offers. This gives the land owner who is offering financing terms competitive advantage over other sellers. Although owner financing interest rates are usually higher than a bank rate, the lower down payment requirements, fewer required fees and closing costs combined with a less hassle process are often preferred by potential land buyers.

    Amortization

    Not only does it help get your land sold faster, another good reason to finance your land is the interest you can earn. When your Maine land sells, what will you do with the proceeds? If you said "put it in a savings account" why? Unless you need the liquidity cash, your money could be working better for you with amortized payments for the land. The front end of an amortization is mostly interest. Even if the borrower pays off early, you will be assured to collect a return on your investment. Looking at all of the options out there, owner financing can be hard to beat.

    Less Risk than other investments

    If done properly, holding a first mortgage on your land is a safe position to be in. Should the buyer/borrower default on repayment, you will have the land as security. There will be costs to pay for the foreclosure action should the borrower default. To reduce your risk, require enough down payment to cover your legal expense of recovering the property.

    Things to consider

    How much down payment should you require? That depends on many factors. Among others these are a few: how much risk are you willing to take, the interest rate you will receive, the buyers qualifications and standing timber values that could be removed.

    The process for lending has become more complicated for the land owner than it was just a few years ago. The reason is the need to be in compliance of new federal regulations on lending. You will hear a lot of different opinions from lawyers, land owners, buyers and others about these regulations. We advise our clients to consult with legal counsel and private lending loan originators regarding owner financing to be sure that all legal documents, lending processes and disclosures are complete.

     

    The Pros and Cons of Buying Land with Owner Financing

    The most common question we get from people interested in buying Maine land is; "Will the owner finance the purchase"? In some cases the answer is yes, but often the best land we have to offer for sale does not have owner terms of either a mortgage or contract for deed.

    Pros

    From a buying point of view what are the advantages of financing your land purchase with the owner? .

    Less Down Payment

    One of the advantages of owner financing is sometimes the down payment requirement is less than required by a conventional bank or lender. If the owner does not have a mortgage on the property they will sometimes finance with less than 20% down payment. This is considerably less than a bank would require.

    Easier Qualification

    If you have had a few credit blemishes in the past an owner is more likely to extend credit than conventional lenders. Many owners will ask for a credit report and a low score could cause the owner to decide not to finance the property or ask for more money down and/or a higher interest rate. The owner is also less likely to want to see all of your financial history which for many is enough of a reason to stick with the owner. Some banks and other lenders require a lot of documentation to consider a loan.

    Cheaper Closing Expenses

    Owner financing usually comes with lower closing cost requirements. Owners will rarely ask for appraisals, points, flood certifications, title work among other things. For buyers looking for short term financing the cost savings of low closing cost may be the reason they want the owner to hold paper.

    Time

    Without any question the purchase of land with the owner financing the transaction is much quicker than the same loan with a bank. Most owner financed land deals will close within 2 weeks of the offer being accepted. The owner may have a licensed loan originator package the deal but no underwriters or other reviewers will need to approve the deal.

    Cons

    For the buyer who insists at only owner financed purchases the downside could be considerable. You may think that owner financing is the best way to purchase but here are a few things you should consider before ruling out other means of borrowing.

    Interest

    Most owners ask for and get interest rates from 1 - 4 % higher than some of our conventional banks charge. Over the life of the loan this increase in rate could add up to thousands of dollars in additional land cost.

    Less Choices

    Many owners have mortgages on the land that they are selling. With a few exceptions most of the owners lenders will require them to pay off the note with the bank if they sell the property. This could cause the seller to ask for a larger down payment or refuse to consider owner financing altogether. If this is the perfect property for you, other forms of financing should be considered in order for you as a buyer to have all land available for you to purchase.

    Higher Price

    If you are asking the owner to finance the transaction they are less likely to take less than they are asking for the property. Having financing secured ahead of time with an alternative lender will put you in a position to offer the seller an all cash deal. Many, if not most owners will negotiate a better price for an all cash deal.

    When looking to buy land in Maine keep all of your options open for purchasing the right property. If you have sufficient down payment, good credit and patience; owner financing is not the best choice. Many more properties at better prices will be available to you with an all cash offer. Call us today for a list of land friendly banks and other lending options.

    Comments

    1. OK Cash Home Buyers on

      This is very informative and is probably one of the best presentations of the pros and cons. Thank you for sharing
      • Owner Finance OKC on

        Awesome presentation, thanks for such a comprehensive article
        • Sooner House Buyers on

          Very well presented article, good job writing such a comprehensive article, totally share-worthy

          Maine Lakefront Land With Owner Financing

           

          Ski Trail Road Folsom Pond

          The Narrows with views into Crooked Pond

           

          Lincoln, Maine - It has been a winter to remember, but spring is coming and many anxious buyers have been searching for lakefront and other waterfront land and lots this winter. While looking around the state for lake and pond properties with fair prices and easy owner financing terms, we found the following properties the best buys in Maine.

           

          Driveways are installed

          Driveways are installed

           

          The Narrows on Folsom Pond has seven available waterfront parcels ranging in size from 1.8 acres to over 5 acres. Prices starting at $29,900 The survey map linked here shows the configuration of the lots, those that are still available and the prices. MAP OF THE NARROWS

          Folsom Pond is a semi-remote pond hidden in the woods in Lincoln. The pond is connected to Crooked Pond by a navigable "Narrows" the division of land gets its name from. These two ponds are not lined with sandy beaches, this is not the perfect place to swim. There are other lakes and ponds in Lincoln that are ideal for swimming with a couple of sand beaches nearby. Folsom and Crooked are the perfect ponds for kayaking, canoeing or small power boating in a peaceful environment usually free of large boats and jet skis. The rocky and water lily covered shorelines are the perfect habitat for waterfowl, smallmouth and largemouth bass. Wild blueberries line the shorelines. There are some cabins on the pond but most are not visible when on the pond.

           

          Shoreline with view of Folsom Pond

          Shoreline with view of Folsom Pond

           

          The owner of these properties is offering owner financing terms that make buying the land very easy. If you thought you could never afford a waterfront property, you should look into these properties. See these properties and more at LandBrothers.com

           

          Cold Stream Pond - Central Maine's Premiere Cold Water Lake

           

          Cold Stream Pond View

          Cold Stream Pond View from Webb Cove

           

          Overview - Cold Stream Pond is one of the finest lakes in central Maine. It is very scenic with views of Mount Katahdin to the north and the "Bluff", a large elevated peninsula that separates the southern and northern basins of the lake. This large lake which is partly located in the towns of Enfield, Lincoln and Lowell, is probably best known for its incredible water quality and clarity. The water quality is so good that the state of Maine established a fish hatchery in Enfield using the lakes water via a pipeline.

          The lake is supplied water by springs and also fed by the outlet of the two Upper Cold Stream Ponds located in Lincoln. This outlet is Smelt Brook and enters Cold Stream Pond in the northern basin. A few other cold brooks enter the lake including Miles Brook and the outlet of nearby Trout Pond in Lowell.

          Size, Depths and Boating - The surface area of the lake is more than 3,600 acres. The upper basin is approximately 704 acres and max depth of 56 feet. The state lake survey says that the upper basin has good water quality but can suffer from lower dissolved oxygen levels in the later part of summer. This is a quiet place to explore large rocky coves with a kayak and is usually the first area of safe for ice fishing in the winter. The lower basin contains about 2,924 acres with water depths up to 104 feet. This is a deep round basin perfect for boating, water skiing and sailing.

           

          Map-of-Cold-Stream-Pond

          Depth Map of Cold Stream Pond

           

           

          Fishing - Lake Trout are native to CSP and naturally reproduce in the spawning beds within Webb Cove and other locations. No stocking is necessary to maintain this fishery. The lake is known to occasionally produce a trophy lake trout in excess of 20 pounds. Landlocked salmon and brook trout are maintained by a stocking program. One fish not mentioned on the online survey of the lake by Maine DIFW is the cusk. If you have never eaten this fish you are missing a real treat. The odd looking fish in the Cod family is somewhat difficult to clean unless you know how. Google search some videos on how it is done. I recommend the technique of skinning then filleting. Fishing regulations for Cold Stream Pond include no taking of smelts in the lake or tributaries, no size or bag limit on bass and daily bag limit on salmon is one fish. For all regulations click on this link to Maine 2015 open water and ice fishing regulations. CLICK HERE FOR MAINE FISHING REGULATIONS

           

          Maine Lake Trout

          Ice fishing for Maine Lake Trout or "Togue"

           

           

          Boat Landing and Beach Location - Cold Stream Pond has one improved boat landing located at the south west corner of the lake at its outlet. There is a concrete ramp and parking area located at the end of Old Hatchery Road near the center of Enfield. The ramp is located in the outlet and is sheltered from wind and weather. Large boats can be launched at this landing but use caution when exiting the channel of the stream as there are a few large rocks.

          There is a public beach located on the western shore known as Morgans Beach. It is a beautiful sand beach and an excellent place for swimming and a family picnic. Traveling north on the Lincoln Road from Enfield village look for the signs for the beach on the right.

          Real Estate Types & Values - Property types around Cold Stream Pond include small seasonal cottages and cabins which are mostly on the west shore of the lake. This was the area first developed nearly 100 years ago. Some of these properties have since been converted to year round homes. Finding land for building is rare on this side of the lake. Cottages will range in value from $125,000 to $250,000 depending on lot size, building and lake front quality among other variables. Year round converted properties will sell from $200,000 - $300,000 on average.

          The eastern side of the pond was not developed until the late 1980's. Lots on this side of the lake are much larger because of changes in zoning regulations and required setbacks that went from 75 to 100 feet in residential zones and 250 foot lake setbacks in the resource protected areas of Enfield and Lowell. Most of the properties found on this side of the lake are much newer and larger than the west side. Most are year round residences. Property values on this side of the lake currently range from $250,000 to over $400,000.

          Getting Here - From I-95 you take exit 217 and head east on Route 155 about 6 miles to the boat landing on Old Hatchery Road. The landing is located 39 miles from Bangor, Maine and 272 miles from Boston, Ma.

          If you are looking for a perfect central Maine waterfront property see our listings linked CLICK HERE FOR MAINE WATERFRONT PROPERTIES.

          ARE YOU PREPARED TO BUY MAINE LAND

          Are you planning on buying a parcel of Maine land this year? If so, you need to know a few things before you start, especially if you are not from here and/or have never purchased land before.

          FINANCING

          Before you fuel the car or buy the plane ticket, have you considered how you will pay for it? Obviously, if you have cash this item can be checked off your list. If you intend to get a loan to complete the purchase, you should know it is not the same process as getting a home mortgage. Most US banks do not do land loans. So if you planned on using the BIG bank you have a credit card or your home loan with, save yourself a lot of time and money by asking if they will finance raw land. Ask them questions like:

          • What down payment would be required?
          • Is there a limit on how many acres they will accept?
          • Do they do business in Maine?
          • Do they have approved appraisers and title companies in Maine?
          • Is your credit score high enough for their land loan program?

          If you find out they will not do the loan, you just saved yourself hundreds of dollars in travel expenses. There are a few solid lenders who finance raw land in Maine. So if you need financing give us a call to get the list. Also, many sellers will consider owner financing their lands.

          GREAT EXPECTATIONS

          Maybe before calling the lenders, you should ask yourself why are you buying land? What is your intended use of the property? Did you get all the information on your target properties to be sure the ground will meet your needs and desires? For example, if you intend to use the land for raising cattle, is the land zoned for that use? If not, you are going to waste time and money coming to see it. Make a list of your concerns and get the answers before you come, a few example as follows:

          • Is the zoning in line with your intended use?
          • Is the property in a tax program that prohibits your intended use?
          • Are the soils OK for your use?
          • Does the property have utilities to it? If not and you require them, how far and how much to extend them?
          • Does the property have year round access?

          CLOTHING AND EQUIPMENT

          The next item of preparedness that I nearly always forget to tell my customers before they get here is the appropriate clothing to wear for a visit to Maine. If you are looking at forested land, for example, and are unfamiliar with Maine, the forest here can be very dense and the ground uneven. Here is a checklist of the minimum gear you should have with you when you come.

          • Good pair of boots - waterproof if you have them
          • Sun or safety glasses to protect your eyes from tree branches
          • Layered clothing options for changing weather conditions
          • A waterproof coat

          If you are working with one of us to show you the land, the above list will get you by. If you intend to do some exploring on your own, think about the following items:

          • A good compass
          • GPS
          • Maps of the areas of interest
          • Backpack
          • Water bottles
          • Snow shoes in winter

          CUSTOMER OR CLIENT

          The final question to ask yourself is are you confident enough to represent yourself or should you hire a broker to help you with the process. If you have the time you can do your own research and represent yourself in the process, but if you do not have time a good land broker is worth a look. Maine does require a real estate agent representing a buyer as a client to have a written buyer brokerage agreement, so if you do decide to go this route be sure to carefully review the contract to see what the agent's and your obligations are to each other.

          Comments

          1. Allyson Vignola on

            Thanks for this! Can you send me the list of the Maine lenders that you're aware of that will finance a land-only loan? This is an improved lot, so not just raw land. We've found Maine Savings but that's it so far. Thanks for any help!
            • Phil McPhail on

              Please send me your email and which part of Maine you are in. We will send the information directly to you. phil2@lifestylepropertiesme.com
          2. Bill Hardie on

            Can you send me a list of lenders for the Brooksville, ME area? Thanks!
            • Phil McPhail on

              Please send me an email (so I can get yours) and I will send a list to you directly. phil2@lifestylepropertiesme.com