Anyone here familiar with purchasing land from a seller using Assumption Transaction/Assumption Deed? I was thinking assuming someone’s land, who needs to sell, could let a buyer find a lower interest rate by assuming. This seems like a legitimate way to purchase land, but I’m curious how much risk is associated with this type of purchase agreement?

It used to happen back in the day. I don't know any lenders that don't have a due on sale clause in their notes now. It's been a long time since I heard of anyone assuming a note.

Loan assumption or more commonly referred to as “Subject to” or “sub 2”, is a very common way of buying properties, be it homes or land. A lender rarely calls a loan due, they would rather keep making the interest money every month that have the loan paid off immediately. Most people buying this way are investors and have a couple of exit strategies. Sub 2 can be a great way to acquire recreational land at a great price.

Risk wise, you need to close the deal just like any other purchase, with a title company. You don’t want to find out that the owner has a lien on the property, or owes back taxes, or maybe they own the property with 8 other heirs and can’t legally sell the property. Other than that, there really is no risk on the purchasing side. Your exit strategy is where your greatest risk comes from.