How to Buy Owner Financed Land Through a Title Company

Owner financing for land works differently depending on the purchase price. For higher-value properties, the transaction is typically managed through a title company rather than directly between buyer and seller. Here's how that process works.

⬜ IMAGE: Photo of a title company office or two people signing closing documents at a desk. Adobe Stock search: "title company real estate closing documents signing." Place after intro paragraph.

Why Owner Finance Land?

It can be difficult to get a bank loan for a land purchase for two reasons: the land itself is the only on-site collateral, and banks prefer a structure on the property. Unless you're building immediately and making it your primary residence, a traditional loan for recreational, investment, or camping land is unlikely. Investors like us will owner finance the property for you. We carry the loan so you don't need a bank.

New to owner financing in general? Start with How to Buy Owner Financed Land for the basics before continuing here.

How to Buy Owner Financed Land With a Title Company

If you're closing an owner-financed purchase through a title company (which is the right move for higher-value properties), here are the steps:

1. Select a title company. Often the seller will leave this choice to you. Do your research.
2. Notify the title company of the agreed financing terms. They need the purchase price, down payment, interest rate, and payment schedule to prepare the paperwork.
3. The title company prepares three documents: a Promissory Note, Deed of Trust, and Deed. These are sent to both buyer and seller for review and signature, typically via an online signing service like SignNow or DocuSign.
4. Both parties sign and receive copies. If using an electronic signing service, this happens automatically.
5. Down payment and title company fees are processed. The down payment goes toward your total purchase price. Title fees cover the paperwork, closing, and loan management.
6. Monthly payments are set up. The title company collects payments from the buyer and distributes them to the seller each month. You're now a land owner.

⬜ IMAGE: Illustration or photo of three documents fanned out representing a promissory note, deed of trust, and deed. Adobe Stock search: "real estate closing documents promissory note deed of trust legal paperwork." Place after the steps list.

What Is a Promissory Note?

This document states the terms of the sale: how much you pay each month, for how many months, the interest rate, and the starting principal balance. It also spells out the seller's promise. If you pay off the property in full per the terms, the seller promises to deed you the property.

What Is a Deed of Trust?

This is an agreement between the lender and borrower that allows a third party (the title company) to serve as trustee. The title company holds ownership of the property until it's paid off in full. Ownership is effectively transferred at signing from seller to buyer, but the title company doesn't release or record the transfer until you've paid it off.

What Is a Deed?

The deed legally transfers ownership from the previous owner (the seller) to you. At payoff, the title company releases the deed and records it with the county. Title insurance (issued by the title company at closing) protects your ownership interest against future claims.

Key Differences When Using a Title Company

There are three key differences versus a direct owner-financed transaction:

1. You get title insurance. Closing costs are higher but you have legal protection.
2. The title company acts as an independent third party throughout.
3. Property ownership transfers at signing rather than after completing all payments.

That last point is significant: when you close through a title company, you own the land from day one. You can camp, RV, trim trees, and use the property immediately while making your monthly payments.

Before closing, make sure you've done your homework: confirm the zoning, verify ownership, and check for back taxes or liens.