Buying Land for Sale by Owner in Texas: What to Check
Short answer: You can buy Texas land directly from its owner, but no agent is checking anything for you. The seller's disclosure notice in Texas Property Code Section 5.008 is written for a home: it covers residential property with not more than one dwelling, and it does not apply where any dwelling is worth 5% or less of the property's value, so on vacant land you should not count on getting one. That puts the checking on you. Close through a title company: Texas does not require title insurance, but the Texas Department of Insurance says it insures against loss from title defects that arose before you bought, the premium rate is set by the state, and the title commitment you get before closing lists the problems to clear. Use a written contract (TREC's Unimproved Property Contract, form 9-18, is built for land without buildings), and check access, the survey, the flood map, deed restrictions, septic and the taxes before you sign.
Land sold by its owner, with no agent on either side, is common in rural Texas: a sign on a fence, a post online, a neighbor who wants out. The price can be good and the seller easy to deal with. The catch is that nobody in the middle is checking anything, so the checking falls to you. This guide covers what Texas law does and does not require the seller to tell you, why you still want a title company, and the checks to run before you sign.
What the seller has to tell you (often not much)
Texas has a required seller's disclosure notice, but it is written for homes. Texas Property Code Section 5.008 requires it from a seller of residential real property comprising not more than one dwelling unit, and its checklist asks about roofs, smoke detectors and plumbing. The same section lists exceptions, including transfers under a court order or foreclosure, transfers between co-owners or to relatives, and property where the value of any dwelling does not exceed 5% of the property's value.
So on a vacant tract, or land with an old shed, do not count on getting a disclosure at all. That does not stop you from asking. Put your questions to the seller in writing: how the land is reached, whether it floods, whether there is a survey, any leases or easements, any unpaid taxes, and whether there is a well or septic system. Keep the answers with the contract.
Use a written contract
A handshake deal on land is a dispute waiting to happen. The Texas Real Estate Commission publishes an Unimproved Property Contract, form 9-18, for property that does not have buildings, additions or fixtures on the land. Whatever form you start from, make sure the contract spells out the price, the earnest money, who pays for the title policy and any survey, how long you have to object to title problems, and the closing date, and have a Texas real estate attorney review it. Our guide on earnest money on a Texas land sale covers who holds the deposit and when it can be kept.
Close through a title company
The single best protection in a by-owner deal is closing through a Texas title company. According to the Texas Department of Insurance:
- It is not required, but it protects you. Texas does not require title insurance. It insures against financial loss caused by defects in title, and it protects you against losses from problems that arose before you bought the property.
- The price is the same everywhere. The premium rate is set by the Texas Department of Insurance, and all title companies charge the same premium for a policy.
- You see the problems before closing. The title commitment comes before closing and is an offer to issue the policy on conditions, such as the seller fixing certain problems.
The title company also handles the money, so you are not wiring funds to a stranger. Our guides on how to read a title commitment and what a title search finds on vacant land explain what to look for.
The checks to run before you sign
- Legal access. Make sure the land touches a public road or has a recorded easement. A gate the seller has always used is not the same as a legal right. See landlocked land and access easements.
- Survey and boundaries. Ask for any existing survey and whether the title company will accept it; see what title companies accept without a survey.
- Flood zone. Look the land up on FEMA's map; see how to check if Texas land is in a flood zone.
- Deed restrictions and county rules. Restrictions can limit what you build or ban RVs and mobile homes. Our rules checklist shows which ones to check for your plans.
- Septic and water. If you will live there, ask the county about a septic permit; see septic systems on Texas land.
- Taxes and valuation. Check the appraisal district record for unpaid taxes and any agricultural valuation, which can bring a rollback tax if the use changes. See how to look up property taxes owed.
Red flags in a by-owner deal
- The seller wants cash or a wire directly, not through a title company.
- The seller cannot show how they hold title, or the name on the appraisal record is someone else's.
- Pressure to sign today, or a contract that skips the title policy and survey.
- No written answer on access or flooding.
None of these means the land is bad, but each one is a reason to slow down and get the title company and an attorney involved.
Compare before you buy
A by-owner price looks good only next to other land like it. Our guide on how much Texas land is worth explains how to compare tracts, and you can browse the land we have for sale, where we tell you what we know about each tract and what we do not.
Common questions
- Does a Texas seller have to give a disclosure for vacant land?
- Texas Property Code Section 5.008 requires the seller's disclosure notice for residential real property comprising not more than one dwelling unit, and it does not apply to property where the value of any dwelling does not exceed 5% of the property's value. On vacant land, do not count on a disclosure; do your own checks and ask the seller written questions.
- Do I need title insurance to buy land in Texas?
- The Texas Department of Insurance says Texas does not require title insurance, but it insures against financial loss caused by defects in title that arose before you bought the property. A lender will require its own policy; without a loan, the owner's policy is your protection.
- Are title insurance rates different between title companies in Texas?
- No. The Texas Department of Insurance sets the premium rate, and all title companies charge the same premium for a policy, according to TDI.
- What contract should I use to buy land from an owner?
- Use a written contract. The Texas Real Estate Commission's Unimproved Property Contract (form 9-18) is for property that does not have buildings, additions or fixtures on the land. A Texas real estate attorney can draft or review it.
- What is a title commitment?
- It comes before closing and is an offer to issue a title policy on conditions, such as the seller fixing certain problems. TDI notes it does not guarantee that there are no current issues or that none will arise.
Sources
- Texas Property Code Section 5.008 (seller's disclosure of property condition)
- Texas Department of Insurance: Title insurance FAQs
- Texas Real Estate Commission: Unimproved Property Contract (form 9-18)
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