16+ SAMPLE Land Purchase Agreement

What is a Land Purchase Agreement?

A land purchase agreement is a document that has the terms and conditions of the purchase of the land that is done between a buyer and a seller. The contract usually includes the purchase price. It also has the closing date when the buyer has to complete the payment. If the buyer cannot make full payment on the stated date, any deposits that have been made will be forfeited and will remain to the seller. The land purchase usually comprises a vacant lot that is bought by the buyer. This has been bought by cash or trade. The land purchase agreement is similar to a sale agreement. It also has contingencies and due diligence periods.

The land purchase agreement is a notarized agreement that will be signed by both parties. Having a real estate purchase is good because you can have an investment that can be used for future business. Vacant land is also good if you want a specific design for your house that you cannot find in the real estate markets. Making a property purchase these days is advisable because as you enter a land contract, you can secure a sure property for yourself that you can sell in times of need. And you can earn a profit through the sale. Besides, years may pass and the actual value of the purchased land will become higher. It can make you have a great profit.

Before you enter a vacant land purchase agreement, you must ensure that you are buying land that can be legally yours. You must get a lawyer that can help you in the process if you want to be sure that you will not be a victim of scammers who are so active nowadays. You can enter an installment land contract that will enable you to have partial payments for the land that you are purchasing. This is good for buyers who cannot afford to pay cash for the property. Through installments, they can buy a property that can be used for whatever purpose they may have, whether to build a home or a place for a commercial business.

The land sale and purchase agreement can make buyers confident that they will have a property that is legally theirs in a court of law. They can do whatever they like with the property after it is paid to the seller. When having an agreement, be sure to comply with the terms so that you will have a good land purchase. You will not want any misunderstandings to be a source of dispute that can be brought to court. This may risk your money and even the property that you are buying. So, when buying land, you should also be wise so that you will not waste any money that you can spend from buying.

Elements of a Land Purchase Agreement

The land contract purchase agreement has elements that you have to know so that you will know what is the contract that you are entering. It will be good for you to know about them because you will know whether you can accept the agreement or not. Read the following and know some of the elements of a land purchase agreement:

Information of Parties: The first element of the agreement is the information of the parties involved. You must identify who is the seller. Write the name of the seller in the contract. Opposite the name is the address and contact information. Then identify who is the buyer. Write the name of the buyer and include the address and contact information.Address of the Property: The address of the property is a very important element in a land purchase agreement. You must be able to identify the property that is being sold. This will denote that the buyer has the full right to the property at that address. Be sure to write the address rightfully. Or this will cause some trouble if you will not write it correctly.Price of the Property: You should state the price of the property in the agreement. This is especially needed in vacant lots that will be paid through installments. By putting the price, you will agree that you should pay this price to the seller. It does not matter if you will pay in full or through partial payments. You must recognize the price that you have agreed to pay. You should also state your payment terms. State the methods that you will use, whether you will pay in cash or you should have a deposit. Or if you have to get a mortgage loan. The agreement provides a financing addendum that can especially help buyers if they have to face a lending situation. The land purchase agreement has earnest money requirements so you have to be careful in stating the payment terms.Date of Transfer: You must state the date of transfer or the date that the buyer will have complete rights to the property. This is necessary so that the buyers will be confident that they already own the property. This is the transferring of the rights of the property from the seller to the buyer. When you state the date of transfer, you must be clear in it. Make a clause that will clearly define this thing. This clause will relay that the buyer already owns the property.Closing Date: Any stipulations or changes that you have to make for the closing date should be written in the agreement. The closing date states the conveyance of the property’s title. It is kept through a bill of sale. You must be sure to pay the complete amount of the sale before the closing date. After that, you can have the completed title of the property.Special Assessments: Special assessments should be stated in the agreement. You should state the property taxes, maintenance fees, and homeowner’s association fees. Payments can be prorated. The taxes should be addressed by an addendum if they are not paid properly. But you have to know that the seller is responsible for paying the special assessments.Homestead Classification: You must state if the property is homestead or classified for reduced taxes. This should be outlined in the agreement. The property will not be considered as a homestead unless you occupy it or your relatives.Included Items: You have to be definite in the agreement if there are included items for the property. The structures that can be attached to the property are light fixtures, equipment, windows, doors, built-in appliances, and bathroom fixtures. This is needed so that the things that are included in the purchase will be clear. Or else, the seller may require another payment for these. You have to be clear in the land agreement that they go together with the land purchase.Disclosures: You have to be definite about the disclosures that will go together with the contract. This includes well disclosure, paint disclosure, sewage disclosure, facilities disclosure, radon gas disclosure, annexation disclosure, and methampethamine disclosure. These are the other things that can go together with the land purchase. The seller must be clear if the buyer has to pay for these things or not. If the buyer has to pay, the seller should include the appropriate prices in the agreement. It will be added to the total cost that the buyer has to pay to the seller.Contingencies: The first contingency in the agreement is the inspection. To give the buyer’s satisfaction, an inspection must be made to the property. It must complete any health and inspection safety checklist. The seller must allow the buyer to inspect the property. Though, the buyer will be responsible for all the expenses for the inspection. Usually, there will be a deadline of ten days for the home inspection. The next contingency is the appraisal. This is should be done by the lender. The appraisal must not go over the value of the home. It will then be up to the buyer to negotiate the price. The repair that should be done to the property will be at the seller’s expense. If the buyer will not be satisfied with this contingency, he or she can cancel the contract. Another contingency is financing. Most buyers have mortgage loans to pay for the purchase. In this, the buyer needs a pre-approval letter. This will guarantee the ability of the buyer to pay for the mortgage. A financing contingency can protect the buyers from failing to pay. But if the buyer cannot get the funding, he or she can back out with the deal. Through financial contingencies, buyers can recover earnest money like the deposit. The last contingency is the title. The seller must prove that he or she has the title for the land. This will give confidence to the buyers before the closing date. There should be a title report that an authorized title company can handle the things about the title of the property.Acceptance Date: There should be an acceptance date in the agreement. Write the date when the buyer has agreed to purchase the land. There should be an offer expiration if the things will not go as planned and the buyer becomes hesitant in buying.

How Land Purchase Agreement Works

Do you need a land sale and purchase agreement template or a land purchase agreement sample? Do you need it because you want to know how the land purchase agreement works? If you want to know that, we can do something about your problem. We have provided you with some steps that you can use for a land purchase agreement. They are the following:

1. Make an Offer

The first that is needed is buyers have to make an offer. They have to search for properties that they can purchase. The offer for land purchase is needed so that lawyers can also assist them in finding land to purchase. Buyers can complete the contract with the help of lawyers. They should list all the conditions that they have for sale, listing all the information needed for a land purchase.

2. The Seller’s Response

After the agreement has been made, buyers should wait for the sellers to respond to their call. The sellers can reject the offer. They can also make a counter-offer. They can negotiate the terms that they want to have in the agreement. But if sellers will accept the offer, the agreement will start and the buyer may start to make a deposit. This is earnest money that buyers have to give.

3. Due Diligence Period

The due diligence period will start after the deposit. It allows the buyer to test everything to ensure that he or she will have good land to purchase. The contingencies will be tested and proved. The tests also include environmental tests and other tests on local government. If buyers will find anything disagreeable with the property, they may back out on the deal and get their deposit, depending on the terms that are written in the agreement about contingencies.

4. Property Closing

When due diligence has been made, it is time for the property closing. If the property will be paid in cash, then the property closing will be sooner. If buyers have financing, an environmental report is needed. The property should be also appraised by a 3rd party. When buyers have completed the funding, both parties will schedule a closing date.

5. Recording the Deed

After the closing date, the seller will sign the deed on the property. This will happen after all payments have been made by the buyer. The deed should be filed in the county where the property is located. A tax on the sales of property should be given. The payment for this is divided between the seller and the buyer.

FAQs

Can I sell the land contract?

Yes. You can sell the land contract if that is specifically stated in the agreement. So, if you want to sell your property, be sure to have some clause about this in the agreement. This way, when you do not need the property anymore, you can sell it even if it is not fully paid.

Can land properties be rented?

Yes, land properties can be rented. This is common in commercially used land properties.

Is a land purchase agreement important?

Yes, it is important. You have to take care of all of the legal processes when you are going to purchase land. The land purchase agreement is one of these things.

When you are going to purchase land, be sure that you are going to have a land purchase agreement. Buying land is a crucial thing. You have to ensure that you will have all the legal rights to the property that you are going to purchase. Well, do you need a template for a land purchase agreement? This post has 16+ SAMPLE Land Purchase Agreement in PDF. Have one to create a better agreement that you can use. Download now!