Buy vacant land in this order: confirm the parcel is what the seller says it is, verify legal access in the county records, order a title commitment and read Schedule B, then test what you can build. Cheap questions first, deal-killers early, wire money last.
What order should I do due diligence in?
Cheapest and most fatal first. Confirm identity and ownership from the tax record and the deed, then legal access, then a title commitment, then permitted use, then buildability — perc, water, utilities — then hazards and money. Every step should be able to kill the deal before you have spent much on the next one.
Start with identity, because a surprising number of land deals are about a different parcel than the buyer thinks. Match the legal description on the deed against the parcel number on the tax record and against the recorded plat, and confirm that the person offering to sell is the person on the deed. An estate that was never probated, a dissolved LLC still holding title, or four heirs where only one is talking are all common on land that has sat unused, and each of them has to be resolved by someone before a deed can convey. Then ask the county whether the parcel is a legal lot of record.
Put the sequence in the contract. A due diligence period with a defined length, a refundable earnest money deposit during it, and written contingencies for legal access, title, and a satisfactory soil or percolation result are what let you exit without argument. Verbal understandings do not survive a disagreement about a deposit. On raw land the diligence window has to be long enough for a county health department and a title underwriter to work, and both of them run on their own calendars rather than yours.
Spend the free layer before the paid layer. County GIS, the tax record, the recorded plat, the FEMA Flood Map Service Center, the National Wetlands Inventory, and USDA Web Soil Survey cost nothing and eliminate most bad parcels in an afternoon. Only then pay for a title commitment, a perc test, a survey, or a wetland delineation, and order those in the sequence where each one can still stop the deal before the next invoice arrives. Our own process runs the same way, and how it works sets out where the money goes.
How do I verify legal access before I wire money?
Legal access means a recorded right, not a road you can drive. Verify it three ways: frontage on a road the county or state actually maintains, an express recorded easement in the chain of title, or a dedicated public right-of-way on the plat. A two-track you drove during a showing is not evidence of any of them.
Ask three offices and one company. The county road department can tell you which roads are on the maintained inventory, which is not the same as which roads exist. The recorder can produce the plat and any recorded easement instrument. The assessor can tell you what the parcel is credited with. And the title company can tell you the answer that actually matters: whether the underwriter will insure access. If a title underwriter declines to insure access to the parcel, you have your answer, and no amount of driving the road will change it.
Curing bad access is slow and uncertain. A negotiated easement from a neighbor costs whatever the neighbor decides it costs, and the neighbor has no obligation to sell one. An easement by necessity generally requires proving common ownership at the moment of severance and is litigated, not filed. A prescriptive easement requires open and continuous use across a statutory period that varies by state. None of these is fast, and buying on the assumption that one will work out is how people end up owning landlocked land they cannot use or resell.
Landlocked parcels are still worth buying at the right price, which is a landlocked price. The buyers who do well are adjoining owners consolidating ground, timber buyers with a haul agreement in hand, and recreational buyers who genuinely accept permissive access. What does not work is paying a with-access price and planning to fix it later. Permissive access is also revocable: the neighbor who waves you through has no obligation to keep doing it, and a new owner of the adjoining tract has none at all. If you are shopping, our available parcels state the access situation rather than leaving it for you to discover.
What does title insurance on a rural parcel cover, and what does it not?
An owner's policy insures against defects in title that existed before you bought, per the CFPB. It does not insure zoning, environmental condition, boundary lines in the absence of a survey, or anything the policy excepts. On rural parcels the exceptions are where the risk lives, which makes Schedule B the part worth reading.
A title commitment has three parts and only one of them is reassuring. Schedule A says who owns the parcel and what will be insured. Schedule B-I lists what has to happen before the policy issues. Schedule B-II lists the exceptions — the things the policy will not cover. On rural land the standard exceptions routinely include rights of parties in possession, unrecorded easements, and any matter an accurate survey would disclose, and in many states unpatented mining claims and water rights as well. Per the CFPB, the policy protects you against claims arising from before your purchase, not against everything that can go wrong afterward.
Some risks are excluded outright rather than excepted. Zoning and land use regulation, environmental condition, and the exercise of eminent domain are not title matters, and neither are defects the insured buyer created or agreed to. Zoning coverage exists only by endorsement, and the endorsements available for vacant land are narrower than the ones written for improved commercial property. The American Land Title Association publishes the standard policy and endorsement forms, and it is worth reading the exception language before you assume a policy solves a problem.
Rural chains break in predictable places. Metes-and-bounds descriptions written a century ago leave gaps and overlaps against neighboring calls. Estates were never probated and the deed still names someone who died in 1978. Tax deed chains exist that some underwriters will not insure without a quiet title action first. Severed mineral estates are excepted, not insured, so a policy will never tell you that you own the oil and gas. Ask the underwriter what they will insure before you rely on the policy to fix anything.
How does seller financing on land actually work?
Two structures, and they are not equivalent. A note with a mortgage or deed of trust conveys the deed at closing and secures the debt against it. A land contract keeps legal title with the seller until the last payment, and in some states default ends in forfeiture rather than foreclosure. Know which one you are signing.
The federal overlay depends on whether a dwelling is involved. In an advisory opinion issued in August 2024, the CFPB stated that a contract for deed financing a home sale generally meets the definition of credit under the Truth in Lending Act, which brings residential mortgage protections with it. Raw land with no dwelling on it generally sits outside those dwelling-specific rules, which leaves state law to decide what happens on default — and forfeiture statutes differ enormously from one state to the next.
Regulation Z also decides whether the seller is acting as a loan originator. Under 12 CFR 1026.36(a)(5), a natural person, estate, or trust financing the sale of one property it owned in any 12-month period is excluded from the loan originator rules, and a second exclusion covers a seller financing three or fewer properties in any 12-month period where the financing is fully amortizing and carries a fixed rate or a rate that resets no sooner than five years, subject to annual and lifetime limits. A seller doing volume beyond that is in a different regulatory position.
Structure it so it survives a dispute. Close through a title company or a real estate attorney, with a title search and an owner policy. Record the instrument — an unrecorded land contract leaves you invisible to the world and exposed if the seller borrows against the parcel or sells it again. Confirm there is no underlying mortgage with a due-on-sale clause. Put the deed in escrow with written release instructions, pay property taxes directly to the county so you can prove they were paid, and get an amortization schedule and a stated payoff. A seller who refuses recording is telling you something.
Why do land loans price differently from mortgages?
Because raw land is the weakest collateral a bank takes. Under the Interagency Guidelines for Real Estate Lending Policies, the supervisory loan-to-value ceiling is 65 percent for raw land against 75 percent for land development. There is also no secondary market for a raw land note, so the lender keeps it on its own balance sheet.
The supervisory limits are published. Per the Interagency Guidelines for Real Estate Lending Policies, an institution may lend up to 65 percent of value for raw land, 75 percent for land development or finished lots, 80 percent for multifamily and other nonresidential construction, and 85 percent for one-to-four family residential construction. These are supervisory guidelines rather than hard caps — a bank may exceed them — but the aggregate of loans above the limits should not exceed 100 percent of total capital, which is exactly why exceptions get rationed to the borrowers a bank already knows.
Farm Credit is a different lender with a different rule. Under 12 CFR 614.4200, a Farm Credit System institution may not advance funds where the outstanding balance would exceed 85 percent of the appraised value of the real estate, or 97 percent where the loan carries a federal, state, or other governmental guarantee, with private mortgage insurance permitted to cover the amount above 85 percent. The collateral has to be primarily agricultural or rural property. For acreage a commercial bank will not touch, that is often the institution that will.
What this means at the closing table is a larger down payment, a shorter term, a balloon rather than a 30-year amortization, and a rate above a conforming mortgage, because the note stays in portfolio instead of being sold. Local banks and credit unions that know the county lend on land national lenders decline outright. A large share of land still changes hands for cash or on seller paper for exactly this reason. If your plan depends on maximum leverage, land is the wrong asset to buy.
Can I buy land sight unseen without getting burned?
Yes, if you replace boots on the ground with records and a paid local set of eyes. County GIS, the recorded plat, the FEMA flood map, the National Wetlands Inventory, USDA soil data, and dated aerial imagery answer most questions. Hire someone local for the rest, and never let the seller pick them.
Each source answers something specific. A county parcel viewer gives boundaries, acreage, ownership, zoning, and what the neighbors are doing. The FEMA Flood Map Service Center gives the current effective flood zone rather than whatever a listing claims. USDA Web Soil Survey gives soil series with ratings for septic absorption fields and building limitations, which is a screen rather than a substitute for a perc test but eliminates hopeless sites fast. Historical aerial imagery shows whether there was ever a structure, a pit, a dump, or a road.
Then pay a person. What no record answers is the condition of the access road and whether it is gated, whether the low ground holds water in spring, whether anyone has been dumping, what the neighboring use smells like, whether cell service exists, and whether the corners can be found. Hire a local surveyor, land agent, or inspector directly and pay them yourself. A seller-supplied photo set is marketing, and the drone footage was shot on the one clear day of the year.
Land has been sold sight unseen at scale since the 1950s, which is why Congress passed the Interstate Land Sales Full Disclosure Act. Under Regulation J, 12 CFR part 1010, a developer of a subdivision containing 100 or more nonexempt lots must register with the CFPB and give each purchaser a printed property report before any contract is signed. That obligation falls on developers of large subdivisions, not on an ordinary resale between two parties, so on a one-off purchase the diligence is entirely yours to do.
When should I walk away from a land deal?
Walk when the problem is legal rather than physical. No recorded access with an unwilling neighbor, a broken chain of title, an unprobated estate, a parcel that is not a legal lot of record, or a seller who will not let a land contract be recorded. Physical problems have prices. These have lawsuits.
The legal defects share one trait: you cannot buy your way out of them at closing. A title underwriter that will not insure the parcel, heirs who have not all signed, a tax deed chain that needs quieting, a seller who is not actually on the deed, a lot the county says was never legally created — each of these requires a court or a stranger to cooperate, on a timeline nobody controls. A cheap price does not compensate you for a defect that also prevents you from reselling.
Physical problems are different, and most of them are just arithmetic. A flood zone, jurisdictional wetlands, a failed percolation test, no utilities at the road, steep or rocky ground, severed minerals — every one of these has a cost you can estimate and subtract from what you offer. The parcels that are genuinely dangerous are the ones where nobody has ever established the answer, because uncertainty is what gets mispriced in both directions. The guides work through what each of those determinations costs and who issues it.
Then there is fraud, which on vacant land follows a recognizable pattern. Impersonation of an absentee owner works precisely because nobody lives on the parcel to notice, and a below-market price paired with pressure to close quickly and a seller who will only communicate by email is the standard shape of it. Confirm wiring instructions by telephone using a number you looked up independently, never one that arrived in an email. Verify identity against the recorded deed. Insist on closing through a title company or attorney, every time.
Supervisory loan-to-value ceilings that shape what a land loan looks like
Collateral
Ceiling
Where the limit comes from
Raw land
65 percent of value
Interagency Guidelines for Real Estate Lending Policies, 12 CFR part 365, subpart A, appendix A
Land development or finished lots
75 percent of value
Interagency Guidelines for Real Estate Lending Policies
Multifamily and other nonresidential construction
80 percent of value
Interagency Guidelines for Real Estate Lending Policies
One-to-four family residential construction
85 percent of value
Interagency Guidelines for Real Estate Lending Policies
Agricultural or rural real estate, Farm Credit System lender
Check legal access, title, permitted use, and buildability, in that order. Confirm the deed description matches the tax record and the plat and that the seller is the person on the deed; verify access through the county road inventory, the recorded plat, or an express easement, and ask the title underwriter whether they will insure it; order a title commitment and read the Schedule B exceptions; then confirm zoning, septic feasibility, and flood or wetland status before the diligence period expires.
How do I know if a parcel has legal access?
Legal access exists only if it is recorded, so check the record rather than the road. Frontage on a road the county or state actually maintains, an express easement recorded in the chain of title, or a public right-of-way dedicated on the plat all establish it; a two-track you drove, a neighbor who has never objected, and a road that appears on a mapping app do not. The cleanest test is whether a title underwriter will insure access to the parcel.
Does title insurance cover boundary problems on rural land?
Not unless a survey removes the standard survey exception. Owner policies routinely except any matter an accurate survey and inspection would disclose, along with rights of parties in possession and unrecorded easements, and on rural land those exceptions cover most of what actually goes wrong. Title insurance also excludes zoning, environmental condition, and eminent domain entirely, and severed mineral estates are excepted rather than insured. Schedule B is where the real risk on a rural parcel is disclosed.
Why is it harder to get a loan on vacant land?
Because regulators cap the loan-to-value lower on land than on anything built. Under the Interagency Guidelines for Real Estate Lending Policies, the supervisory ceiling is 65 percent of value for raw land and 75 percent for land development, against 85 percent for one-to-four family residential construction. There is no secondary market for a raw land note either, so the lender holds it in portfolio, which shows up as a shorter term, a balloon, and a higher rate. Farm Credit lenders can go to 85 percent of appraised value on qualifying agricultural or rural property under 12 CFR 614.4200.
Is a land contract safe for the buyer?
Only if it is recorded and closed through a title company or attorney. A land contract leaves legal title with the seller until the final payment, and in some states default ends in forfeiture rather than foreclosure, meaning you can lose both the land and everything paid toward it. Record the instrument, confirm no underlying mortgage with a due-on-sale clause exists, get an owner title policy, put the deed in escrow with written release instructions, and pay taxes directly to the county. A seller who refuses recording is the clearest warning sign there is.
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