I know some sellers, including my company, Rural Retreats (www.RurRet.com),offer owner financing for vacant land. This is usually accomplished via a "Land Installment Contract" by which you agree to pay a certain amount down (I usually require 20%)and then monthly payments over a period of time (usually 10-20 years) together with all other costs of the property (taxes, insurance, etc.). This contract is then recorded in the county's official records to give the buyer proof of his interest in the land. Upon completion of the contract (i.e. full repayment of the purchase price), the seller gives the buyer a deed for the land. One thing to be wary of, however, is that many sellers who use Land InstallmentContracts do not allow for prepayment/early payoff of the principal without a penalty because they want to be sure they get their interest. I never charge a penaltyfor prepayment- make sure this is in writing in any contract you sign!

Thebenefits of Land Installment Contracts are (i) that it provides an alternative for those with creditthata bank would not find sufficient and (ii) the closing can occur quickly and costs are usuallyminimal (we usually only charge $100 for closing costs, which covers document preparation and recording fees). The negatives are (i) that the interest rates are usually higher thanbanks charge (we typically charge 12.5% - but this is offset by low closing costs and our allowance for early payoff without penalty - if you can get financing from a bank after awhile because your credit improves/you gain equity in the property/you come into some money then you can pay it off early and avoid most ofthe interest) because sellers are taking on extra risk (if you have really good credit you'll just go to a bank)and typically have high costs of capital themselves and (ii) you have to read the contracts closely and ensure that thecontract is recorded in the Official Recordsto be sure you're not getting ripped off (i.e. prepayment penalties, tricky interest calculations).

I hope this information is helpful to anyone who is thinking about buying vacant land and is considering going with owner financing!

If you are looking for rural land in Southern Ohio/WV, please take a look at what we have to offer at www.RurRet.com or give me an email at [email protected].