The Key to Understanding a Vacant Land Purchase Agreement
This article can be a great resource if you wish to create a vacant land purchase agreement on your own and save loads of money on lawyer fees. We also offer guides to many other documents to help you understand them better and speed up the drafting process.
A vacant land purchase agreement is a written contract that outlines the terms of purchasing vacant land to establish the conditions, due diligence time, and contingencies of a land deal.
Besides the vacant land purchase agreement (land contract), there are similar purchase agreements for other real estate property, such as apartments and houses.
A vacant land purchase agreement is a contract that employs seller financing, and it holds benefits for both parties.
Not many sellers wish to take the risk of financing the sale of their real estate, but there are many benefits they can reap from this contract. Thanks to vacant land purchase agreements, they:
- Can sell vacant land faster because many buyers can’t afford mortgages or get the necessary approval
- Can get more money for their property, but they won’t get it upfront
- May receive cash down payment if the buyer agrees to it
The buyers have perhaps even greater benefits. Thanks to a vacant land purchase agreement, they:
- Can have bad credit history and still buy vacant land
- May pay for a property in monthly installments, instead of paying the full amount upfront
- Can be indebted to a person who may have more patience and understanding than mortgage clerks
It’s imperative to discuss the details of any land purchase agreement with a real estate lawyer, no matter if you’re a seller or a buyer.
Vacant land purchase agreements need to be drafted carefully, with attention to detail. Otherwise, they may backfire and cause headaches to everyone involved. Every vacant land purchase agreement should contain these sections:
|Vacant Land Purchase Agreement Sections||Explanation|
|Personal details of all parties||The buyer and the seller must disclose their full names, addresses, and any other required information|
|The effective date||A contract must have a clear purpose and effective date, as well as a closing date on which the seller will transfer the deed to the vacant land to the buyer|
|Description of the property||The seller must provide a precise description of the land and make sure nothing is left out|
|Price||The parties need to negotiate and come to a clear final price of the property|
|Deposit||At least a low deposit is a nice touch and a guarantee that the buyer is serious|
|Seller financing||All the terms and details of seller financing must be disclosed, e.g., mortgage, interest rates, etc.|
|Inspection rights||The buyer can and should inspect the land before a purchase|
|Real estate agent details||All real estate brokers should be named, and their fees must be specified|
|Signatures||All parties must add their signatures next to the date of signing|
Note that these elements aren’t set in stone. Many additions and changes could be necessary to match your particular circumstances, so don’t trust online contract templates that claim they’re perfect.
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