This post covers the Land Sale Agreement.
Here you will learn;
- What is a land sale agreement
- Contents of land sale agreement
- How to write a land sale agreement
- Land sale agreement template
- land sale agreement word document (free download)
Let’s get started
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What is a land sale agreement?
A land sale agreement refers to the legally binding contract between two parties i.e seller and buyer set-outs terms and conditions of selling and buying the landed property. It comprises the purchase price, earnest money down payment, closing date, and any other criteria that the parties have agreed upon.
The buyer must finish the land sale contract either by himself or with the aid of a real estate agent or attorney in order to submit an offer for acquisition.
The buyer must provide the relevant property details, which can be received from the neighborhood assessor’s office, and specify any sale restrictions.
The seller must next decide whether to accept, reject, or make a counteroffer after the buyer has finalized the contract.
If the offer is accepted, the buyer must proceed with their due diligence phase and pay the earnest money deposit.
Most land sale and purchase agreements include a due diligence period that gives the buyer the opportunity to inspect the property and make sure it can be used for the purposes for which it is intended.
This might entail performing environmental tests, securing licenses from the local authority, or taking any other precautions specified in the agreement.
After due diligence what follows is closing. The closing might happen quite quickly if the buyer wants to pay cash.
When a buyer decides to get finance, the majority of lenders demand a phase I environmental assessment and a third-party appraisal of the property.
The parties may set a closing date if the buyer has taken all necessary actions to secure the cash required to acquire.
The seller will confirm receipt of the funds and give the buyer the deed to the property after the closing. The deed serves as the property’s title, attesting to the buyer’s ownership.
The deed must be submitted to the county’s Registry of Deeds in the area where the property is situated.
For each jurisdiction, there is often a tax on real estate sales based on a “mill rate.” Unless otherwise specified, the buyer and seller will typically share this tax.
How to write a land sale agreement
First of all, legal agreements are drafted not written. But to keep it plain and understandable, I will proceed to use the word ‘write’ troughout this post.
To write a legally accepted land sale agreement you have to clearly outline the terms and conditions of the transaction so that both the buyer and the seller are aware of what they are signing.
To be enforceable your agreement must comply with the contract and land law of your state.
The following are the things that you should write in your land sale agreement
- Title of the document i.e LAND SALE AGREEMENT or LAND PURCHASE AND SALE CONTRACT etc.
- Date of the agreement
- the names and addresses of the seller
- the names and addresses of the buyer
- Description of the land (property) i.e plot and block no. location, size, etc.
- Earnest Money
- Actual selling price.
- Closing Terms
- Survey/ due diligence terms
- Termination clause
- Governing law clause
- signatures of the buyer and seller
Land sale agreement template
The following is the simple land sale agreement template that you can use in any land sale and purchase transaction
LAND SALE AGREEMENT
This Land sale AGREEMENT made this ……….. day of……., 20…
NAME OF THE SELLER of ADRESS OF THE SELLER (hereinafter called “the Vendor”) of the one part
NAME OF THE BUYER of ADRESS OF THE BUYER (hereinafter called “the Purchaser”) of the other part:
WHEREBY IT IS WITNESSED as follows:
Description of the property
The Vendor being the owner of ALL THAT piece or parcel of land comprising [INSERT PARTICULARS OF THE land] (hereinafter referred to as “the Property”) hereby sells the said property to the Purchaser who buys the same on the terms hereinafter stated
The Buyer undertakes to pay $[AMOUNT] as consideration by [DATE] at [TIME] AM PM (“Earnest Money”) following acceptance by the Parties. Subject to the Buyer’s capacity to perform in accordance with the provisions of this Agreement, the Earnest Money will be applied to the Purchase Price at Closing. In accordance with State law, any earnest money accepted is/is not needed to be kept in a separate trust or escrow account.
The purchase price of the Property is USD………………….
The closing of this transaction will take place in the office of a title company chosen by the Parties on [DATE], at [TIME] AM PM or earlier (“Closing”).
The Buyer/Seller/Both Parties shall be liable for the Closing Costs associated with the Property.
Survey and Due Diligence
Before the Closing, the Buyer may have the Property surveyed to make sure there are no problems (referred to as “Survey Problems”). The buyer is responsible for covering the survey’s costs. Any survey issues, which are believed to be a flaw in the title to the Property, must be reported to the seller by the buyer to the seller no later than [#] business days before the Closing. Prior to the Closing, the Seller must fix any problems within [#] business days.
Buyer has the option of canceling this Agreement, in which case the Earnest Money will be returned to Buyer if Seller does not or is unable to fix any such defect(s).
The Buyer shall have [#] business days following receipt of the Title Search Report to advise the Seller in writing of any matters disclosed in the report that the Buyer finds unsatisfactory. The Buyer shall be deemed to have accepted the Title Search Report if they fail to timely protest it.
The Seller has [#] business days from the day the objections were received to make the necessary corrections if the Buyer objects to the Title Search Report, the mortgage loan inspection, or any other information that reveals a substantial flaw. Buyer may decide to cancel this Agreement, in which case the Earnest Money will be returned to Buyer if Seller does not fix any defects found by the Title Search Report.
Any Earnest Money must be repaid to the Buyer in full within [#] business days in the event that this Agreement is terminated as specified in this Agreement, barring default, and all parties are released from the responsibilities outlined in this Agreement.
The laws of the state of [STATE] shall apply in interpreting this Agreement.
Expiration of Offer
Unless this Agreement is signed by the Seller and a copy is personally delivered to the Buyer by [DATE], at [TIME] AM PM, this offer to acquire the Property as described in this Agreement shall be deemed revoked and the Earnest Money shall be returned.
If any clause or portion of this agreement is determined to be illegal or unenforceable, only that clause or portion will be inoperative. the full agreement.
IN WITNESS WHEREOF the parties hereto have set their hands hereunto and respectively signed these presents the day, month, and year hereinafter appearing.
Buyer’s Signature: ________________________ Date: ______________
Seller’s Signature: ________________________ Date: ______________
Land sale agreement word document (free download)