The Paperwork You Need to Buy and Sell Land in Alabama

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The Paperwork You Need to Buy and Sell Land in Alabama

Bart Waldon

According to a 2022 survey by the Alabama Center for Real Estate, over 60% of land parcels sold in the state in 2021 were vacant plots or raw land purchases. With increasing interest in buying and selling vacant land across Alabama, it's important to understand the documentation required to properly execute these real estate transactions.

Alabama has a rich history and culture, known for landmarks like the white sandy beaches of Gulf Shores, the Space and Rocket Center in Huntsville, and civil rights destinations like the Rosa Parks Museum in Montgomery. The state features diverse terrain, from the Appalachian Mountains in the north to the Gulf Coast plains along the southern border. Both urban centers like Birmingham and rural agricultural communities contribute to the local economy. With population growth across metro areas like Huntsville and Tuscaloosa, demand for raw land is likely to continue rising.

When preparing to buy or sell a land parcel in Alabama, the key paperwork includes:

  • Purchase Agreements 
  • Sales Deeds 
  • Surveys/Plats 
  • Title Search Reports 
  • Closing Disclosures

Ensuring all documentation is complete, accurate, and legally compliant is essential for a smooth transaction, especially when vacant land has less standardized value than residences.

Key Paperwork to Buy and Sell Land in Alabama

Purchase Agreements

A real estate purchase agreement stipulates the negotiated terms between a buyer and seller for the land sale. Common components include:

Sale Price & Contingencies: Outlines the sale price, earnest money deposit, and any sale contingencies needing fulfilled before closing. For example, many buyers want land appraisal or inspection contingencies.

Property Description: Details the land's location/acreage, existing structures, access routes, etc. Ensures both parties understand precisely what is being transacted.

Closing & Possession: Defines target closing date plus when buyer can assume possession of the vacant land after purchase.

Survey Condition: States if land will be sold "as-is" or if seller will provide updated land surveys before closing. Lays out process to terminate the deal if terms are not met.

Having an experienced real estate attorney review the purchase agreement is highly recommended to protect buyer/seller interests in the land sale.

Sales Deed

The sales deed legally conveys ownership of the land parcel from seller to buyer, transferring "title." In Alabama, general warranty and special warranty deeds are common.

Key elements include the parcel's legal description, sellers' formal names as "grantors," buyers' names as "grantees," sale price/terms, plus the deed's execution and notarization date. Recording the executed sales deed with the county becomes part of the public land record reflecting the buyer as the new legal owner.

Surveys / Plats

A land survey by a licensed surveyor maps a property's boundaries and key features like fences, structures, easements, topography, etc. A survey allows a buyer to verify the parcel acreage matches listings and the full area is usable before purchasing.

For recently subdivided land, an official plat map from the county registrar defines legal lots in a planned development. Plat maps complement land surveys by showing lot boundaries/numbers for an entire area. Buyers should review both plats and surveys when available.

Title Search Reports

A title search examines public records to uncover past liens, tax issues or ownership disputes for a property before a sale. If "clear title" cannot be verified, buyers often delay or cancel transactions.

Title professionals research documents like previous sales deeds, court judgements, mortgage releases, unpaid taxes, etc. looking for problems impacting title. Many buyers purchase title insurance to cover exposure if undiscovered title defects surface later.

Closing Disclosures

Closing disclosures itemize all real estate transaction costs for both buyers and sellers. This includes expenses like lender fees, pro-rated property taxes, title insurance, attorney/escrow charges, recording fees, etc.

There are separate versions for buyers and sellers outlining totals owed at closing. Final figures often adjust slightly from initial disclosures after last-minute re-calculations. Reviewing closing disclosures just before closing allows both parties to address surprises before signing final paperwork.

How Land Sales Differ from Houses

When buying raw, vacant land parcels, extra diligence with paperwork facilitates smoother deals compared to home purchases.

Land values per acre depend greatly on development potential, mineral rights, commercial access, surrounding growth patterns and other factors. Standardized appraisal methods like comparing previous sales of similar vacant lots help determine fair parcel prices.

Without structures to inspect, buyers rely more heavily on surveys, title reports and legal documents to uncover any restrictions that could limit land utilization in the future. Items like contested ownership rights or utility easements cutting across a property warrant extra scrutiny.

Furthermore, mortgage financing options differ for vacant land. Many buyers choose to pay cash or leverage private lending at higher interest rates. Less available financing means land buyers with cash to close quick offers often prevail.

For sellers with equity, companies like Land Boss specialize in buying and selling land across Alabama and surrounding states. Land Boss pays cash for property based on merits like location, terrain, and resource potential. By providing fast sales without commissions, Land Boss created over 100 discounted land transactions across the region in its first 5 years. The company sees adding value for property owners as their long-term business mission.

The team at Land Boss emphasizes that selling land without professional guidance rarely achieves full open market prices. Property marketing, price negotiations, contingency lifting and closing tasks often take 1-2 years even for motivated sellers acting solo. Companies able to purchase land at below retail values simply reflect broader market difficulties converting raw land into cash efficiently.

Key Takeaways

The paperwork involved with buying or selling land in Alabama may seem daunting without real estate experience. However, being an informed party and working with competent professionals streamlines vacant land transactions.

Ensuring proper purchase agreements, deed transfers, surveys, title reports and closing disclosures get executed avoids headaches. Paying attention to localized land values and consulting qualified attorneys also smoothes the process.

With demand rising for open lots across Alabama's metro and rural areas, understanding how to navigate both buying and selling land empowers more residents to become successful real estate investors. Taking the time upfront to gather paperwork, conduct due diligence and negotiate fair terms translates into wise long-term asset building.

Frequently Asked Questions (FAQs)

What are the main purchase agreement terms I should review before buying vacant land in Alabama? 

Some key sections to review include the purchase price, due diligence period, closing date, property description, survey requirements, mineral rights details, and conditions for terminating the contract. Scrutinize each section to ensure terms match your understanding and expectations before signing. Also work with a real estate attorney to customize the purchase agreement appropriately for your situation before an offer gets submitted.

Does a warranty deed provide better land title protection than a quitclaim deed in Alabama?

Yes, warranty deeds (general or special) provide fuller title protection than quitclaims for land buyers in Alabama. With a warranty deed, the seller guarantees they hold clear title without encumbrances, thus covering the buyer if title disputes emerge later. Quitclaim deeds provide no such protection - transferring the land "as is" with no legal recourse for the buyer if flaws surface afterwards. Pay the extra cost for a warranty deed at closing whenever possible.

If I'm buying 10 acres of rural hunting land, what survey details do I need the seller to provide before closing? 

For raw recreational land, prioritize having survey markers clearly delineated at all corner boundaries and any access easements or rights-of-way crossing the property marked as well. Also confirm the total acreage matches within reasonable rounding relative to what gets advertised and recorded in the deed transfer paperwork itself. Having the land surveyor measure and map any encroachments by neighboring structures or significant vegetation also proves useful for maintaining boundaries long-term when dealing with vacant land.

What are the pitfalls of trying to sell land myself without a broker? 

Attempting to sell land without professional guidance generally fails to achieve full market value for sellers. Paying for real estate services like pricing guidance, marketing reach, networking contacts, buyer vetting/negotiations, and handling closings is complex without experience. FSBO land owners must also set aside substantial time to field buyer inquiries, schedule showings, address contingencies, plus keep closing documents moving properly. Leveraging services like Land Boss that buy land directly for cash can make the sales process easier for many property owners.

Could mistakes in closing disclosures invalidate a land sale after closing? 

Major errors on real estate closing disclosures could leave buyers or sellers in Alabama with grounds to contest a land transaction even post-closing. However, for minor discrepancies that get identified after the fact, rescinding a recorded land sale over small dollar differences typically proves extremely difficult unless fraud gets alleged. All parties should still carefully review figures on CDs before signing to avoid post-close disputes. Having an experienced real estate attorney assist at closing lowers potential disclosure mistakes substantially as well.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.


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