When somebody first calls us about buying a lot, the question that comes up within the first ten minutes is always some variation of: "How much money do I actually need to bring to do this?"
It's a fair question, and most online sources make it more complicated than it needs to be. Let's just walk through every fee category that shows up on an owner-financed land deal here, what each one is for, and what we actually charge.
The down payment
What it is: Your initial equity in the land — the portion of the purchase price you pay before we finance the rest.
What we charge: Our standard down payments are listed on each lot and kept workable. If paying the full amount at once is a stretch, we may split it across a short written schedule, typically completed within 14 days and occasionally up to 21 days for a specific reason.
When you pay it: When you decide to purchase a specific lot. Once the first agreed payment is made, we take the lot off the market while you complete the down payment and we prepare the contract.
For comparison:
- A traditional bank land loan typically requires 20–35% down.
- A specialty rural land lender might require 10–20% down.
- Other owner-financed sellers commonly require 5–15% down.
We keep down payments low because they should show real commitment without creating an unnecessary barrier.
Recording fees
What it is: A small fee charged by the local Probate Judge's office to record real estate documents.
What it covers: When we eventually sign the warranty deed and record it at the county courthouse, the county charges a recording fee plus deed tax.
What it costs: Usually $50–$150 in the local area.
When you pay it: At payoff, when the deed is being transferred and recorded. Not at the start of the contract.
This is the only "closing cost" in the traditional sense, and it's tiny compared to a bank closing.
Property taxes
What it is: Annual taxes paid to the local area on the land.
What they cost: For a typical 5-acre rural lot in the local area, expect roughly $80–$200 per year in property taxes. Most of our lots fall on the lower end of that range. We have a full post on the local area property taxes with current numbers.
Who pays them during the contract: This is in your contract. Two common structures:
- We pay, you reimburse. We pay the county directly to keep our records clean, and bill you back annually.
- You pay directly. Once we set this up, the county sends bills to you.
We discuss this with each buyer at signing.
Late fees
What it is: A fee charged if a monthly payment is more than 10 days late.
What we charge: $35 per missed payment, applied automatically by Lendiom.
We don't compound it, we don't stack fees, and we don't make it punitive. The point is to encourage on-time payment, not to penalize folks who hit a rough patch. We have a post on what happens if you miss a payment.
Things we DON'T charge
For full transparency, here's what's NOT in our deals:
- No origination fee. Bank loans typically charge 0.5–2% of the loan amount upfront. We don't.
- No appraisal fee. Banks require one ($400–$700). We've already priced the lot.
- No survey fee unless you specifically request one. Most of our lots have existing surveys.
- No prepayment penalty. Pay it off in 1 year or 7 years, the math is the same to us.
- No "junk fees." Document prep fee, processing fee, courier fee — none of these on our deals.
- No title insurance fee unless you specifically buy title insurance. We don't require it. (We recommend it, though — see our title insurance post.)
A worked example
Every lot has different terms, so the exact numbers are shown on the lot listing and confirmed in writing before you pay. Your upfront amount is the listed down payment. Monthly payment, interest, property taxes, and recording costs vary by property and contract.
Compare that with a traditional bank land loan, which may require 20–35% down plus appraisal, origination, and other closing costs.
Title insurance (optional)
If you want title insurance — and we do recommend it for the peace of mind, especially on properties with any complicated history — expect to pay $400–$800 one-time through a local title agency. We can refer you to one we've worked with.
This is the one truly meaningful "extra" cost some buyers add. It's worth the money if you want it.
What to bring to the table
When you are ready to purchase a lot:
- Your down payment using the payment method we agree on
- Bank account information for setting up monthly payments through Lendiom
You will need identification when your contract is notarized, but we do not require a government ID to qualify you. There are no tax returns, W-2s, credit pulls, or bank-statement requirements.
Ready?
Look at our lots, find one you want, and call us at (205) 202-9620. We'll quote your specific deal in writing — every number, every fee, no surprises.
— Providential Real Estate