First Time Land Buyer Part 1

Key Takeaways: 

• Establishing early on what kind of property you want and what you’ll use the land for is an important step to ensure you find the acres right for you.
• Consider factors like the terrain, soil type, current structures on the property, flood zones, and whether the land already has utilities and water set up. Also identify what exemptions, if any, the land currently has.
• Whether you should go with a land loan or traditional mortgage loan will depend on your individual situation. It’s important to work with an experienced lender who knows the ins and outs of each option.

This content has been updated as of July 2025.

In this video, we give a high-level overview of what you need to know to purchase land, especially if you’re a first-time land buyer. Part 2 can be viewed by clicking here.

If you’re looking to buy a piece of rural real estate in Texas, here are some things to know.

First, it’s important to define what type of property you’re looking for and the intended use of the land. Options include agricultural use, such as raising cattle, growing crops, haying, or hunting. You might also be looking for acreage where you’ll build a home.

Regardless of property type, it’s important to find a broker that specializes in that area. The process of searching, contracting, and closing on a property will be much smoother if you work with an experienced and knowledgeable broker.

You and your broker will have a list of things to consider as you search for the perfect piece of land:

• Depending on what you’re wanting to use the land for, you’ll want to consider the terrain, soil, elevation, wildlife, and vegetation.
• Utilities will be important no matter how you plan to use the land. Does the property have utilities and water? Or is that something that will need to be added? How much would that cost?
• Are there any current structures on the property?
• Is the property in a flood zone? A flood zone could be a deal breaker for a home site.
• Is there legal access to the property?
• Does the property currently have an ag exemption?

Next, you’ll want to line up financing for the property. Just like it’s imperative to work with a broker experienced in agricultural and rural land, it’s equally important to find a lender with the same qualifications.

You and your lender will also have a list of things to discuss. One topic will be how land loans differ from traditional mortgage loans:

• The down payment for land financing typically begins at a minimum of 20%.
• The interest rate can be locked in for anywhere from 1 to 20 years.
• Interest rates on raw land will differ from conventional mortgage rates.
• Borrowing money from a co-op could help lower your borrowing costs through a cash-back dividend.

Relationship Managers at Texas Farm Credit can walk you through the entire financing process. We’ll discuss estimated rates, terms, down payments, and monthly payments.

We can also customize options based on the type of land you plan to purchase. Providing various financing options and helping you work within your budget are our specialties.

Whether you’re a first-time land buyer or an experienced landowner, Texas Farm Credit can help every buyer finance or refinance their dream property in the country.

Give us a call and let’s talk!