How to Buy Land in Oklahoma

In Oklahoma, the process of buying land involves finding and researching a property. The buyer then makes an offer and the seller accepts it. Next, the parties form a written agreement for the buyer to purchase the piece of land. Finally, the buyer pays the seller.

After these interactions, the buyer records the deed, the legal document transferring ownership to the property. The buyer files the deed with the county clerk’s office. Recording a deed is not necessary to finalize the purchase, but doing so provides notice to other potential buyers that the buyer owns the land.

A buyer usually has to secure financing to purchase land. They should always research the quality of the seller’s title – the property rights that the current owner holds. The owner may not have clean, clear and full title if another party has a right to access or use the land.

The cost of an acre of Oklahoma land differs greatly depending on the location, water and mineral rights, fertility, structures and features, like pools and gardens, and natural resources available on the land. The zoning and level of pollution of the real estate are also factors. In addition, plans for development close to the land make a difference.

If the land is used for agriculture, data about what crops can grow on the land and how crops have been grown on the land in the past, such as organically, are relevant. The wide range of features real property can have means there is no set or average price for an acre of land in Oklahoma.

There is also no definitive method to determine whether land for sale will be a good investment. A prospective buyer should talk to a real estate agent, investment counselor and property law attorney to understand the true value of a property. In Oklahoma, a person age 18 or older is allowed to own or sell real property.

A buyer has the option to purchase many types of land in Oklahoma. Lots could include homes with yards in metropolitan areas like Tulsa, Norman and Oklahoma City; they could also include acres of undeveloped land, or raw land, in rural areas.

Undeveloped land is often in areas without public utilities or structures. A person interested in buying land should talk to a land broker or real estate agent. That type of professional can help them search land listings in a rural county, such as Choctaw County.

A person who needs help financing the purchase of land should talk to a loan counselor at a bank or other financial institution such as a credit union. A loan to buy a home or residential property is typically called a mortgage; a loan to buy primarily the land may be called a land loan or a lot loan.

The interest rate on a land loan varies depending on the amount of the loan, the size of the property, whether the interest rate is fixed or variable and how the buyer intends to use the land. Real property is typically used for residential or commercial purposes.

Real property may also be used for agricultural, forestry or recreational purposes, such as hunting, fishing and all-terrain vehicle use.

A land loan is not a construction loan. A construction loan is used to build a house or a commercial space. A buyer can get a mortgage, a land loan and a construction loan at the same time. Types of land loans include:

• ‌Raw land loan:‌ To purchase a lot in an area that does not have electricity, sewers or roads. To get this type of loan, a buyer should show how they want to develop the vacant land. Raw land loans tend to have much higher interest rates and require a larger down payment than other types of land loans.

• ‌Unimproved land loan:‌ To purchase a lot in an area that has some utilities but is still largely undeveloped. Unimproved land usually does not have an electric meter, phone box or natural gas meter. Such loans have higher than average interest rates but require a lower down payment than raw land loans.

• ‌Improved land loan:‌ To purchase a lot in an area that has roads, electricity and water. Improved land loans usually have comparatively low interest rates. They require a lower down payment than raw land loans and unimproved land loans.

A buyer who applies for a land loan will be expected to:

• Share their credit score.
• Draft a plan for how they intend to use the land.
  
• Show what they have done to check the restrictions on the land, including zoning.

The lender can then estimate the rates and conditions of the loan. The lender will determine whether to approve the borrower who must agree to the loan’s terms. The borrower then makes a down payment on the loan. Next, the borrower is expected to pay the loan back in the period outlined in the loan contract.

The state of Oklahoma does not require that a buyer purchase homeowner’s insurance. Yet a lender usually requires a borrower to do so in order to qualify for a loan. A borrower may also be required to buy flood insurance and earthquake insurance. The cost of homeowner’s insurance depends on certain factors, such as:

• Value of the home.
• Cost to rebuild the home. For example, if the home is recognized as historic and would have to be rebuilt to certain specifications, the homeowner’s insurance policy premiums would be high.
• Location of the home. The crime rate and weather risk in the property’s zip code are relevant.
• Age of the roof.
• Policyholder’s claims history.
• What the policy covers. Basic policies usually cover protection for the home and other structures on the property, like barns or sheds; personal property inside and outside the home, such as furniture; and medical payments to people who come on the property and incur an injury there
• Size of the deductible. A policy with a high deductible usually costs less than a policy with a low deductible.
• Policyholder’s credit score and history.
• Whether policyholder has bought other types of insurance, such as auto insurance, from the same company. Sometimes insurers give customers better rates on bundles.

A county clerk’s office charges a fee to record a deed. The fee varies by county. For example, in Beaver County, the fee is $18 to record the first page of a deed or mortgage. This amount includes a $10 record preservation fee. Recording each additional page of the same instrument costs $2 per page.

An individual can buy land from a state agency such as the Oklahoma Department of Transportation (ODOT) through an auction administered by that agency. The person should submit a bid with the agency.

An individual who is interested in a piece of real estate that the agency has not listed as surplus real estate should fill out the agency’s surplus land request form and include any documents that can add to the application, such as warranty deeds, construction plans and proposed sketches.

Reasons to have a parcel reviewed as excess and surplus include:

• To purchase vacant ODOT property next to the individual’s currently owned property.
• To purchase a private utility easement, or right of access for a private utility company to service the property or ones close to it.
• To lease property for business or personal use.
• To purchase access rights to access the individual’s property.
• To investigate the ownership of the property in which the individual is interested.

ODOT may offer land for sale in a metropolitan area such as Oklahoma City. ODOT lets potential buyers know which lands are available by publishing a map of which parcels have been approved. A buyer should be aware that ODOT sometimes approves lands for sale, but the properties do not have a current sealed bid auction date or established appraisal value.

A person who is interested in leasing land from the state to engage in residential, industrial or retail development should review land sale auctions held by the state’s Commissioners of the Land Office (CLO).

The CLO advertises auctions in a newspaper with county-wide circulation in the county where the land is located. It also advertises these auctions in a brochure available in electronic format and by direct mail. All land sales are auctioned at public bid.

An individual can buy private land at auction through a real estate agent in Oklahoma by submitting a bid with the agent. Lots are typically sorted by size, such as 0 to 10 acres; price, such as under $50,000; and type, such as horse property or residential property.

It is a good idea for a prospective buyer to be aware of the taxes assessed on the property and whether the land presents a business opportunity, such as a cattle feed yard.

In cities such as Oklahoma City, the municipality has established specific urban design and historic preservation districts. Buying land in these areas may present additional hurdles for a buyer who wants to improve the property after the sale. For example, the new owner will need to get a certificate of approval from the city’s planning department to make improvements on a house.

A buyer should first determine whether the property they want to buy is in a design or historic preservation district and then learn the requirements for projects like additions to a home.

Next, they should look over the design review submittal packet to determine what they will need to provide to the city, such as the site plan including the proposed work and elevations and floor plans. There is a fee to submit the packet.

A real estate attorney can assist a person interested in buying property by performing a title search, reviewing the contract for the sale of property, reviewing the contract for financing, and checking over forms like the design review submittal packet after the sale.

A real estate attorney can help revise the contract if they are unfair and they can indicate what difficulties the contract might present down the road for the buyer.

A real estate attorney is also able to assist with identifying restrictions on the property like easements, defined as a right to cross a person’s property or access features on the land. For example, the right of a neighbor to fish on a creek on the property would impair the owner’s title.

A real estate attorney can help a new owner offer money to terminate the easement through a buyback or file a lawsuit.