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Norm Geddis
Norm is a contributing writer at Online Land Sales, LLC.

Pricing, Terms, & Money

How Does Seller-Financed Land Work?

First off, the financing in seller-financed land fits the needs of buyers looking for a simple buying process and no-hassle contract purchase. Since there is no credit check and everyone is guaranteed financing, the threshold is low, and many new customers can access land ownership.

The contract is between the seller and the buyer; no mortgage company gets involved in the buying process. At OnlineLandSales.com, all buyers have a loan management area in their account where buyers can make payments, schedule recurring payments, and see all the terms of their loan.

You also can buy the land outright or pay off your loan early and receive a discount (more on that below).

Unlike many suburban developments, you are not required to do anything with your land. You can Use, Build, or Hold, as the term goes. Many buyers purchase for hunting and camping purposes, building a cabin, using a trailer, or pitching a tent. Others build their permanent home, while others hold the land as an investment. It's up to you. You are under no obligation to build on your land.


Interest rates on seller-financed are around 10%, and the note term is about 15 years. At OnlineLandSales.com, we offer a 9% rate with 15.5-year terms for all loans $10,000 or greater. Our terms are on the low side of the industry average. The down payment is usually $121.

A nice aspect of seller-financed loans is that there is usually no balloon payment—the loans pay off entirely at the end of the contract or upon the principal's early payment. There is no balloon payment. Most sellers even offer a discount for early payment of the balance. OnlineLandSales.com, loans have no balloon payment and provide a 10% discount off the remaining principal balance when paid early.

Monthly payments are usually due on the 1st or the 15th of the month. Your first due date will oftentimes be less than 30 days from the sale date.

At OnlineLandSales.com, upon completion of the purchase and down-payment, electronic and hard-copy contracts will be delivered for signing. Once either is signed, the buyer can start using their land.


Here is something exceptional. Most sellers allow you to return the land and get back the principal of your payments. Interest is usually not refundable. Since no credit check is required, if you need to vacate your land, there is a simple foreclosure process, no ding to your credit, and you can get back the principal you already paid. At OnlineLandSales.com, you will have 2 months from your date of purchase to return your land and receive a complete principal refund.

Property Taxes

Get ready for the sweet part of this deal. Property taxes are oftentimes ridiculously low compared to taxes for a suburban home. Some yearly taxes are as low as $10 per acre. Usually, taxes are paid to the seller (added to the monthly bill once or twice per year) until the loan is paid, and then they are paid directly to the county.

How can this be such a Good Deal?

Seller-financed land is set-up with a low threshold because of the wealth of inventory available, and the inherent security to the seller of having the land as security on the loan. This benefits buyers hugely, in that they are given more opportunities for land ownership. Large land dealers purchase a steady flow of land from developers and bring these opportunities to the public for use in homes, cabins, recreation and investment properties.

Lots are subdivided and sold at a discount because, truth be told, about 90% of US non-public land remains undeveloped. Brokerages and real-estate agencies aren't interested in these lands because they don't fit the needs outlined in their typical buyer profile. Buyers of these lands possess a more independent spirit and are looking for a DIY lifestyle, or they are hunters and outdoors people who want a plot of land far from suburbia. You do business directly with the owners, saving commissions, and other fees when making a purchase.

Plus, the deal is safe for both sides. Unlike a car, the buyer can't drive off with it, nor can it be stolen. The financier retains an interest in the land until the loan is paid. Their security is the land.

This dynamic provides another savings to the buyer. No insurance is necessary. You can always get insurance if you want and doing so is probably a good idea if you build a home, but it's not required as part of the loan.

So, while a typical buyer, agent, and bank scenario, involves a lot more paperwork, details, and of course, a separate source of collateral, buying land online skips all these things. Unlike when you buy a dwelling in a typical purchase scenario, there is no thirty to forty-five-day period during an online land sale, during which any party can back out of the deal for any reason. When you buy land online, the process is quick and straightforward. Usually buyers can start using their land almost immediatley. There's no reason not to purchase undeveloped land using the online method.