Sell Your Raw Land Note in Texas Today

Raw land notes are the unsung workhorses of the Texas owner-financing market. Every week, hundreds of parcels of undeveloped land across the state change hands with seller financing, and each of those transactions creates a promissory note backed by Texas dirt. If you are one of the thousands of Texans holding a raw land note and you have been wondering whether you can turn that paper into cash, the answer is yes — and the market for these notes is more active than you might think.

Raw land notes have a reputation for being harder to sell than notes on improved properties, and there is some truth to that. An unimproved parcel does not have a house, a barn, or a commercial building to anchor its value. But that does not mean raw land notes are unsellable. Far from it. Texas raw land — from five-acre recreational tracts in the Hill Country to hundred-acre spreads in the brush country to development parcels on the outskirts of growing cities — has real, tangible value. And where there is value, there are buyers willing to purchase the notes that land secures.

This guide is specifically written for holders of raw land notes in Texas. You will learn how buyers evaluate these notes, what factors drive the pricing, how to maximize your payout, and what the process looks like from start to finish. If you have been sitting on a raw land note and thinking about selling, today might be the day you finally make that call.

The Raw Land Note Market in Texas: Bigger Than You Think

Texas leads the nation in owner-financed land transactions, and a huge portion of those deals involve raw, unimproved land. The reasons are straightforward. Many buyers of raw land do not qualify for traditional bank financing because banks are reluctant to lend on unimproved property without structures that serve as more conventional collateral. Seller financing fills that gap, and it creates an enormous volume of raw land notes across the state every year.

Who Creates Raw Land Notes

Raw land notes are created by a diverse group of sellers. Individual landowners who inherited a parcel and want to sell it, investors who bought land and are ready to cash out, developers who subdivide larger tracts into smaller lots and sell them individually, and land companies that specialize in buying and reselling rural acreage with owner financing all contribute to the supply of raw land notes in the Texas market.

Many of these sellers structured the financing at the time of sale without thinking about whether they might want to sell the note later. Now, months or years down the road, their circumstances have changed. They need cash for a medical expense, a business opportunity, a retirement nest egg, or simply because they are tired of tracking payments. Whatever the reason, the note they created has become a financial asset with real market value.

Who Buys Raw Land Notes

The buyers of raw land notes are typically experienced note investors and companies that understand how to evaluate unimproved property and the unique risk profile it carries. These buyers look at the same core factors they evaluate for any note — payment history, interest rate, LTV ratio, borrower reliability — but they apply an additional layer of analysis related to the specific characteristics of raw land as collateral.

Longhorn Note Buyers has been purchasing raw land notes across Texas since 2007, and the company's founder Nick McFadin has been in the note business since 1983. That depth of experience with Texas land means they understand the raw land market in a way that national note buyers or residential-focused buyers simply do not.

How Buyers Evaluate Raw Land Notes: The Key Factors

Understanding how buyers evaluate raw land notes gives you a significant advantage as a seller. When you know what the buyer is looking for, you can present your note in a way that addresses their concerns and highlights your strengths.

Location, Location, Location — It Matters Even More for Raw Land

For raw land notes, location is the single most influential factor in the buyer's evaluation. This is because raw land derives its value almost entirely from where it is. There are no buildings, no improvements, no income-generating structures to contribute to the value — just the land itself and whatever potential it holds based on its location.

Raw land within an hour's drive of major Texas metros — Houston, Dallas-Fort Worth, San Antonio, Austin — tends to support the strongest note values. This land appeals to a broad market of buyers: people looking for recreational weekend property, future homesite buyers, small developers, and investors betting on metro expansion. The liquidity of the market for this land gives note buyers confidence that they could sell the property relatively quickly if they ever needed to foreclose.

At the other end of the spectrum, very remote raw land — deep in the Trans-Pecos, the far reaches of the Panhandle, or isolated stretches of the border region — presents a smaller potential buyer pool and longer marketing times. Notes on this type of land can still be sold, but the discount will reflect the reduced liquidity. That said, even remote Texas land has value, particularly for hunting, recreation, and conservation purposes.

Acreage and Parcel Size

The size of the parcel matters both in terms of absolute value and marketability. Very small parcels — under five acres — can be challenging because the total note balance may be small relative to the transaction costs of buying the note. Very large raw land parcels — over 500 acres — can also present challenges because the pool of buyers for such large tracts is limited.

The sweet spot for raw land note sales tends to be parcels in the 10 to 200 acre range, which represent the bulk of owner-financed land transactions in Texas. These parcels have broad market appeal for recreational use, hunting, future homesites, and small agricultural operations, which gives note buyers confidence in the collateral's marketability.

Access, Utilities, and Basic Infrastructure

Raw land is, by definition, unimproved. But the degree to which basic infrastructure exists or is available can dramatically affect the property's value and, by extension, the note's value. A buyer evaluating your note will consider whether the property has legal road access, either through a public road frontage or a deeded easement. Landlocked parcels with no legal access are extremely difficult to sell and significantly reduce note values.

The availability of utilities — electricity, water, and in some cases natural gas — also matters. A parcel with electric service to the property line and a proven water well is worth considerably more than one that would require the owner to drill a well and run power lines a mile from the nearest connection. These factors do not need to be in place already, but the feasibility and cost of bringing them to the property are part of the valuation.

The Borrower's Payment History

Just as with every other type of note, the borrower's payment track record is critical. For raw land notes, payment history may be even more important than usual because the collateral itself — unimproved land — does not generate income. The borrower is making payments purely from their external income, which means consistent payments demonstrate both willingness and financial capacity.

A raw land note where the borrower has made 24 or more consecutive on-time payments is a fundamentally different asset than one where the borrower has been paying for only three months. Seasoning reduces the buyer's risk perception and directly translates to a higher price for you. If your borrower has a strong payment record, make sure it is front and center in your presentation to buyers.

Interest Rate and Terms

Raw land notes in Texas often carry higher interest rates than residential notes, typically ranging from 8 to 14 percent. These higher rates reflect the additional risk associated with unimproved property and the fact that borrowers who buy raw land with owner financing often cannot qualify for conventional loans.

From a note selling perspective, those higher interest rates are actually a significant advantage. Higher rates generate more income for the note buyer, which translates to a higher purchase price for you. A raw land note at 10 or 12 percent interest is generating returns that are very attractive to note investors, and that attractiveness is reflected in the offers you receive.

Loan-to-Value Ratio

The LTV ratio on your raw land note is calculated the same way as any other note — the remaining balance divided by the current property value. For raw land, maintaining a low LTV is especially important because the property has no improvements to fall back on for value. A raw land note with a 50 percent LTV tells the buyer that even if property values dropped by half, they would still be made whole through the collateral. That level of protection commands a premium price.

Texas land values have generally appreciated over the past decade, so if you originated your note several years ago, your LTV has likely improved. Research current land prices in your county to estimate the property's current value and calculate your current LTV. This information is one of the most powerful tools you have in negotiating with buyers. For a deep dive into how LTV and other factors drive pricing, check out this guide on what determines note value in Texas.

Why Raw Land Notes Sell at a Steeper Discount — And Why That Is Okay

Let us address the elephant in the room. Raw land notes typically sell at a larger discount than notes on improved properties. Where a note on a single-family home might sell at a 10 to 20 percent discount, a raw land note might sell at a 20 to 40 percent discount depending on its characteristics. There are legitimate reasons for this, and understanding them will help you approach the process with realistic expectations.

The primary reason for the steeper discount is collateral risk. If a borrower defaults on a note secured by a house, the buyer can foreclose and sell a house — an asset with a large, liquid market. If a borrower defaults on a note secured by raw land, the buyer forecloses on a piece of unimproved property that takes longer to sell and appeals to a smaller pool of buyers. That additional time and uncertainty is real, and buyers price it into their offers.

The second reason is that raw land does not generate income. A house has a tenant or an owner-occupant. A commercial property has business income. Raw land, in most cases, just sits there. The borrower is making payments from external income, and if that income is disrupted, there is no property-level cash flow to fall back on.

Despite these factors, selling your raw land note at a discount is often a very smart financial decision. You are converting a risky, illiquid asset — the right to receive future payments from a borrower who may or may not continue to pay — into guaranteed cash today. For many note holders, the certainty and immediacy of a lump sum far outweigh the cost of the discount. You can learn more about how discounts work when selling a note in Texas and why the math often works in the seller's favor.

Maximizing Your Payout: Strategies for Raw Land Note Sellers

While you cannot change the fundamental characteristics of your note, there are strategies that can help you get the best possible price.

Let the Note Season

If you are not in a rush to sell, every additional month of on-time payments from your borrower adds value to your note. The jump from 6 months of seasoning to 12 months is significant. The jump from 12 to 24 months is even more meaningful. If your borrower is paying reliably and you can afford to wait, letting the note season before selling is one of the most effective ways to increase its value.

Document Everything About the Property

Buyers discount uncertainty. The less they know about a property, the more conservative their offer will be. Counter this by providing comprehensive information about the land: survey maps, aerial photos, soil information, flood zone status, road access documentation, utility availability, any permits or approvals in place, and recent comparable sales in the area.

If the property has any features that add value — a creek, mature trees, a hilltop building site, proximity to a lake or state park, existing fencing, a cleared homesite pad — make sure the buyer knows about them. These details differentiate your parcel from generic raw land and can meaningfully improve the buyer's valuation.

Consider a Partial Sale

Because the discount on raw land notes can be steeper than on improved property notes, a partial sale sometimes makes more financial sense than a full sale. In a partial sale, you sell a specified number of future payments while retaining the rest. The discount on a partial sale is typically more favorable in percentage terms, and you preserve a future income stream.

For a raw land note with an $800 monthly payment and 15 years remaining, selling the next 36 payments gives you a meaningful lump sum while leaving you with 12 years of future income. If your cash need is specific and limited, this approach lets you access it without giving up more of the note's value than necessary. For a side-by-side comparison, read this overview of full vs. partial note sales.

Present Your Note Professionally

First impressions matter in note transactions just as they do everywhere else. A seller who contacts a buyer with all their documents organized, their numbers clear, and their questions thoughtful will receive a different level of attention than one who calls and says "I have a note, what will you give me?" Prepare your note package before you make the first call. Include the promissory note, deed of trust, payment history, property information, and any supporting documentation. This preparation signals that you are a serious seller and gives the buyer everything they need to make a strong offer quickly.

The Process: From First Call to Cash in Hand

The process of selling a raw land note follows the same framework as any note sale, with some nuances during the property evaluation phase.

Step 1: Submit Your Note Details

Contact a note buyer and share the core information about your note — the unpaid balance, interest rate, monthly payment, remaining term, payment history, and property details including location, acreage, and any notable features. A buyer like Longhorn Note Buyers can provide a preliminary cash offer within 24 hours.

Step 2: Review and Accept an Offer

Evaluate the offer based on the price, the buyer's reputation and close rate, the expected timeline, and whether the offer is firm or subject to significant revision during due diligence. If the numbers work for your situation, accept the offer and move forward.

Step 3: Due Diligence

The buyer verifies your documents, orders a title search, and obtains a valuation of the property. For raw land, the valuation may involve a broker's price opinion or an appraisal based on comparable land sales in the area. This phase typically takes two to four weeks. Your responsiveness to document requests is the most important factor in keeping the timeline on track.

Step 4: Close and Get Paid

Once due diligence is complete, the closing documents are prepared — an assignment of the promissory note and an assignment of the deed of trust. You sign, the assignment is recorded with the county, and the purchase price is wired to your bank account. The borrower is notified of the change in ownership and continues making payments under the same terms to the new note holder.

Special Considerations for Different Types of Raw Land Notes

Not all raw land notes are alike, and specific property types warrant additional consideration.

Recreational and Hunting Tracts

Texas is a hunting state, and recreational tracts represent a significant portion of the raw land note market. Notes on properties with good hunting potential — mature whitetail habitat, dove fields, hog country, or proximity to public hunting areas — can command better pricing than notes on featureless parcels because the recreational value supports the property's marketability.

Development and Subdivision Lots

Notes on individual lots within a subdivision can be among the most straightforward raw land notes to sell, particularly if the subdivision has existing infrastructure like roads, utilities, and drainage. The key factor is the pace of development in the area — notes on lots in actively developing subdivisions where new homes are being built are much more valuable than notes on lots in stalled or abandoned developments.

Large Acreage in Remote Areas

Notes on large, remote raw land tracts present the biggest challenge in terms of pricing. The land may have real value — for ranching, hunting, conservation, or mineral potential — but the small buyer pool and long marketing times mean deeper discounts. If you hold a note on this type of property, focus on documenting every value driver you can: hunting lease income, mineral rights, conservation easement potential, water availability, and any development trends moving toward the area.

Ready to Sell Your Note?

If you are holding a raw land note in Texas and you are ready to find out what it is worth, there is no cost and no obligation to get an answer. Contact Longhorn Note Buyers today at (210) 828-3573 or visit longhornnotebuyers.com to get your free cash offer within 24 hours. With over $47 million in notes purchased across Texas, an A+ BBB rating, and a 100 percent close rate on quoted deals, Longhorn has the experience, the market knowledge, and the capital to give you a fair price for your raw land note and close the deal efficiently.

Frequently Asked Questions

Can I sell a raw land note if the parcel is very small, like one or two acres?

Yes, you can sell a note on a small parcel, but the economics may be less favorable. The fixed costs of due diligence — title search, property valuation, closing — remain roughly the same regardless of the note size. For very small notes with balances under $10,000 or $15,000, those fixed costs represent a larger percentage of the deal, which can reduce the net price. That said, small-parcel notes with high interest rates and strong payment histories can still be attractive to buyers.

What if the borrower plans to build on the land but has not started yet?

The buyer evaluates the note based on the property's current condition, not the borrower's future plans. Today, it is raw land, and it will be valued as raw land. If the borrower does eventually build on the property, that would increase the collateral value if you still hold the note at that point. But for the purposes of selling the note now, the valuation reflects what exists today.

Does the property need to be surveyed before I can sell the note?

A survey is not always required, but having one significantly strengthens your note package. If a survey was done at the time of the original sale, include it in your documentation. If no survey exists, the buyer may require one during due diligence, which could add time and cost to the process. A metes-and-bounds description in the deed of trust is the minimum, but a recent survey with clearly marked boundaries is ideal.

What if there are back taxes owed on the property?

Delinquent property taxes create a lien that takes priority over your deed of trust, which is a serious concern for note buyers. If the borrower is behind on taxes, this issue will need to be resolved before a note sale can close. In some cases, the buyer will address the tax delinquency as part of the closing and deduct the amount from your purchase price. In other cases, you or the borrower will need to bring the taxes current before closing can proceed.

Is it better to sell my raw land note now or wait for the land to appreciate more?

This depends on your specific situation and financial needs. While waiting for land appreciation can improve your LTV ratio and potentially your note price, it also means continued exposure to borrower default risk, property damage risk, and the opportunity cost of not having cash in hand. If you have a productive use for the cash today — paying off debt, investing in something with higher returns, funding a life event — selling now often makes more financial sense than waiting for uncertain future appreciation. For more perspective on timing, see this analysis on selling a mortgage note in Texas.