Types of Land Transactions

March 1, 2021

The definition of a land transaction is simply the process taken once you have decided to purchase real property.  There are several types of land transactions which happen in the world of real estate. Land transaction definitions include residential, bare land, commercial, and farm and ranch. Farm and ranch or bare land can be broken down further by the types of land use intended by the property owner. 

Most buyers understand their intent for use of a property long before a real estate contract is written. Once the decision has been made to buy real property, there are basic elements of the real estate transaction which are about to take place. During a real estate transaction, usually earnest money is put down to secure a contract followed by a due diligence or inspection period where a potential buyer will do research on the property to understand land ownership rights and potential land policy and laws.  Many times, water rights will be reviewed, buildings inspected, and other investigations performed to make sure the property is free of any major encumbrances or detrimental issues that may turn up. Also, during this due diligence time the title will be reviewed and financing in most cases will be secured which includes an appraisal of the subject property. Once all contingencies have been waived and financing has come together finally the buyer and seller come to closing. Many times, buyers will use an exchange of land or 1031 tax deferred exchange to purchase property.

When it comes to commercial or residential purchases concerns such as land-use policy and land ownership rights come into play more often than with farm and ranch transactions as there are significantly more regulations.

Types of land use encompassing farm and ranch or bare land purchases can be broken down into agriculture, recreational or a combination of both. The state of Montana has become a larger commercial market as its largest cities continue to grow. Montana continues to be one of the most sought after farm and ranch/recreational markets in the United States. Montana is one of the most diverse landscapes in the United States and most buyers in the large tract of land market can find just about any topography for their needs or wants.

At 18 Land Company our primary goal is to help people buy the property that perfectly fits them and then help them enjoy that property after the purchase. We want to alleviate some of the burdens of farm and ranch ownership by creating a great relationship with our clients during the land purchase process and to maintain that relationship by offering a full line of management services based on our extensive experience in agriculture. Please visit the Land Concierge page on our website to learn more about what 18 Land Company can do for you to make your farm or ranch ownership experience the very best it can be.

If you have questions or would like to talk to one of us about types of land transactions , we welcome you to contact Keith Handlos at 406.988.0055 or keith@18landco.com

For more about 18 Land Company and investing in or operating a farm or ranch, check out:

Why You Should Invest in Rural Property


What to Look For When Vetting a Land Broker


How to Start a Successful Ranching or Farming Operation


18 Land Company Land Concierge Services


About 18 Land Company