THIS LAND PURCHASE AND SALE AGREEMENT (the "Agreement") is made on this the ________ day of ________________, ________ (the "Execution Date")
BY AND BETWEEN:
The Purchaser, _________, with a permanent address at _________
(individually and collectively, the "Purchaser")
-AND-
The Seller, _________, with a permanent address at _________
(individually and collectively, the "Seller")
CONVEYANCE OF THE PROPERTY
1. The Seller agrees to sell and convey to the Purchaser (individually the "Party" and collectively the "Parties") and the Purchaser agrees to purchase from the Seller, upon the terms and conditions hereinafter set forth, the property situated at _________, and all right, title, and interest of the Seller in and to the property with the following legal description: _______________________________________________________________________________________________________________________________________________________.
The property herein described includes all of the following:
(a) All that certain lot, piece, or parcel of land located in the address mentioned above and as described in this Agreement (the "Land").
(b) All buildings and improvements located on the Land and all the Seller's right, title, and interest in and to any and all fixtures attached thereto (collectively, "Improvements").
(c) All equipment, machinery, apparatus, appliances, and other articles of personal property located on and used in connection with the operation of the Improvements (collectively, "Personal Property").
(d) The fixtures and improvements located on the property and all associated rights, privileges, and appurtenances. Lastly, the property also includes any permits, easements, and cooperative and association memberships (the "Property").
AGREEMENT TO PURCHASE THE PROPERTY
2. The Seller agrees to sell and convey to the Purchaser and the Purchaser agrees to purchase, from the Seller, the Property.
PURCHASE PRICE
3. The purchase price shall be paid in cash at closing. There shall be no financing contingency on such payment for the Property. The purchase price for the property (the "Purchase Price") shall be in the following amount: $_________.
EARNEST MONEY DEPOSIT
4. The Purchaser shall deposit $_________ as earnest money at ____________________ with ____________________ acting as escrow agent (the "Escrow Agent"), on or before ________ day of ________________, ________. If the Purchaser does not deposit the earnest money amount as required under this clause, such failure shall result in the Purchaser being in default under this Agreement.
TITLE GUARANTY POLICY OR TITLE INSURANCE
5. The Seller shall provide the Purchaser, at its own expense and if the Purchaser so chooses, with a title guaranty policy guaranteeing good title to the Property or an owner's policy of title insurance issued from a reputable title company (the "Title Company"). The Title Policy shall cover the total amount of the Purchase Price and dated as of the Closing Date when the sale of the Property becomes final, and the Purchaser takes possession.
The Title Policy will be subject to the following exceptions (collectively, the "Title Exceptions"): building and zoning ordinances; standard utility easements; standard riparian matters; common restrictive covenants relating to platted subdivision; oil, gas, and mineral rights; taxes, mortgages, or deeds of trust and assessments which the Purchaser shall be assuming; discrepancies in regard to shortages in area or boundary lines; and any liens that the Purchaser may have created as part of the financing for the purchase of the property.
TITLE POLICY COMMITMENT
6. The Seller shall provide at its own expense or cause to be furnished to the Purchaser a commitment to issue the Title Policy requested by the Purchaser (the "Commitment"), including copies of restrictive covenants and documents evidencing exceptions in the Commitment (the "Exception Documents"). These documents, however, shall not include the standard printed exceptions. The Seller hereby authorizes the Title Company to deliver the Commitment and Exception Documents to the Purchaser's address as provided in this Agreement.
PROPERTY SURVEY
7. Before the Closing Date, the Seller shall provide the Purchaser and the Title Company with the Seller's existing property survey. The Seller shall also submit an affidavit to the Purchaser and the Title Company, affirming the survey's approval. The survey must have been completed within the past year. In the event that the Title Company or the Purchaser's lender does not approve the survey, a new survey shall be obtained. The cost of the new survey shall be shared equally between the Purchaser and the Seller, and it must be obtained at least seven days before the Closing Date.
OBJECTIONS AND CURE
8. The Purchaser shall have the right to submit a written objection within 10 days after receiving the Commitment and Exception Documents regarding any defects, exceptions, or encumbrances to the title that may make the title unmarketable, not including the Title Exceptions.
9. Except for the requirements in the Commitment that are not waived, failure by the Purchaser to provide a written objection within the allowed time will constitute a waiver on the part of the Purchaser to object. Any timely objections by either the Purchaser or any third-party lender must be cured by the Seller at the Seller's expense before closing. The Closing Date will be delayed as necessary. If the objections are not cured, this Land Purchase Agreement shall terminate, and the earnest money will be refunded to the Purchaser within ten days, unless the Purchaser has waived the objections in writing and elected to close the sale, accepting the title with the existing defect.
SELLER'S DISCLOSURE
10. The Seller does not know of any material facts that would affect the value of the Property, except those observable by the Purchaser or any known to the Seller, which are disclosed in this Agreement and the attached addenda.
COUNTY DISCLOSURE
11. The Seller is responsible for satisfying any local disclosure requirements before signing this Agreement. Please consult the local county department in which the Property is situated and/or a local real estate attorney to ensure compliance has been met.
PROPERTY ACCESS AND INSPECTION
12. The Purchaser may select inspectors and pest controllers licensed to practice within the State of Alabama or any lawful agent authorized to make inspections to inspect the Property. The Purchaser shall assume the costs of selecting such inspectors and pest controllers. Further, the Purchaser shall deliver to the Seller, within ten days following the inspection report, a written notice of any defects, including a copy of the inspection report. The Seller shall permit the Purchaser or its agents to have access to the Property for the purpose of inspection at all reasonable times. Lastly, the Purchaser shall pay for turning on existing utilities.
PROPERTY CONDITION
13. The Purchaser accepts the Property in its current state and condition without any further work, repairs, treatments, or improvements. However, this does not include the following specific work, repairs, treatments, and improvements that the Seller will perform at its sole cost: Paint the entire interior of the house.
WARRANTIES
14. The Seller makes no express warranties aside from those expressly described in this Agreement or the attached addenda. Following the closing of this Land Purchase Agreement, the Seller shall assign all warranties of the manufacturer that are assignable to the Purchaser.
CLOSING
15. The Closing Date shall be within seven days after any objections have been revealed from the Commitment or Survey have been cured or before _________, whichever date is later. Failure to close the sale on the Closing Date by either Party will give the non-defaulting party the right to pursue any default remedies provided in this Agreement.
16. Following the closing, the Seller shall execute and deliver a general warranty deed showing title to the Property to the Purchaser with no further exceptions to the title of the Property except the Title Exceptions. The Seller shall also furnish a current tax statement that shows that their Property has no delinquent taxes.
17. The Purchaser shall pay the Purchase Price in good funds acceptable to the Escrow Agent.
18. All notices, statements, certificates, affidavits, releases, loan documents, and any other required documents under this Agreement, the Commitment, or by applicable law, necessary for the closing of the sale or the issuance of the Title Policy, shall be promptly executed and delivered by both the Seller and the Purchaser.
19. All covenants, representations, and warranties made in this Agreement shall remain valid and enforceable beyond the closing date.
20. Upon proper funding at closing, the Seller shall deliver possession of the Property to the Purchaser in its current or required state, ordinary wear and tear excepted. In the absence of an authorized written lease agreement, if either the Purchaser has possession prior to closing or the Seller has possession after closing, a tenancy at sufferance relationship shall be established between the Parties. Both Parties are advised to consult their respective insurance agents to ensure adequate coverage is in place during the transfer of ownership and possession.
SETTLEMENT AND OTHER EXPENSES
21. Unless both Parties agree otherwise in writing, the Seller (the "Seller's Expenses") shall be responsible for paying the following expenses at or prior to closing:
a. All existing liens; prepayment penalties; recording fees; lender, tax statements or certificates; preparation of deed; half of escrow fee, title expense, and any other expenses payable by the Seller under this Agreement must be released or discharged accordingly.
22. The Purchaser shall pay for the following expenses (the "Purchaser's Expenses") must be paid at or prior to the closing:
a. The Purchaser shall be responsible for loan origination, discount, buy-down, and commitment fees.
b. The Purchaser shall also bear all expenses related or incident to any loan, including but not limited to, appraisal fees, application fees, credit reports, loan document preparation fees, recording fees on notes and mortgages or deeds of trust, as well as recording fees on the deed, financing statements, inspection fees, half of the escrow fees, all prepaid items including flood and hazard insurance premiums, documentary stamp tax, and all other expenses necessary for the Purchaser to perform their obligations under this Agreement. All such expenses must be released or discharged accordingly.
PRORATIONS
23. At the closing Date, the following items shall be prorated and adjusted: any taxes due for the current year, association fees, maintenance fees, assessments, dues, and rents of the Property. In the event that the tax rate for the current year is not known, the Parties will calculate the proration based on the tax rate from the previous year plus an additional five percent at closing. Further, in the event that the tax rate for the previous year is also unknown, then the Escrow Agent will estimate the prorated amount and hold back sufficient funds. The prorated amount will be adjusted once the new tax statements become available. The Purchaser must pay their share of the prorated taxes for the current year if the taxes are not paid before or at the closing.
REMEDIES ON DEFAULT
24. In the event of the Purchaser's failure to comply with the provisions of this Agreement, the Seller may take the following actions:
a. Pursue specific performance of the Agreement;
b. Seek any other legal remedies available;
c. Opt for a combination of the aforementioned remedies; or
d. Consider the earnest money as forfeited, treated as liquidated damages, and the sole remedy for the Seller.
25. In the event of the Seller's failure to comply with the provisions of this Agreement, the Purchaser may exercise the following choices:
a. Seek specific performance of the Agreement;
b. Pursue other legal remedies available;
c. Opt for a combination of the aforementioned remedies; or
d. Consider this Agreement as terminated and receive the earnest money within ten days of cancellation.
ESCROW
26. The Parties hereby agree that the Escrow Agent is not:
a. It is a neutral party and not a party to this Agreement, and shall not assume any liabilities arising from the performance or nonperformance of either the Purchaser or the Seller. The Escrow Agent's liability will only arise in cases of gross negligence or willful breach of the terms of this Agreement;
b. It shall not be held liable for the loss of earnest money resulting from the failure of any financial institution where the earnest money has been deposited, unless the said institution is acting as an Escrow Agent;
c. It shall not be liable for any interest accrued on the earnest money.
27. Following the closing of this Land Purchase Agreement, the excess of the earnest money shall be refunded back to the Purchaser and the rest must be applied in the following order:
a. any cash down payment; and
b. Purchaser's Expenses.
28. The Escrow Agent is obligated to provide prior notification to the other Party before releasing any funds to the requesting Party during the course of this Agreement.
29. Notice from the Escrow Agent to either Party will be considered effective upon deposit at any US Postal Service offices or mailboxes with the receipt requested, as long as the notice bears adequate postage and contains the correct mailing address of the Party as specified in this Agreement. Any objection to the demand for earnest money will be considered effective upon receipt by the Escrow Agent.
SELLER REPRESENTATIONS
30. The Seller hereby represents and warrants that, as of the Closing Date, there shall be no liens, assessments, or security interests from third parties against the Property that will not be fully satisfied from the proceeds of the sale. The Seller's representations and warranties are limited to those expressly provided in this Agreement. In the event that the Seller's representations are found to be untrue on the Closing Date, the Purchaser shall have the right to terminate this Agreement, and the earnest money shall be refunded to the Purchaser within ten days.
FEDERAL TAX REQUIREMENTS
31. The Purchaser shall be responsible for withholding ten percent of the gross Purchase Price from the sales proceeds, as required by applicable tax law if the Seller is classified as a 'foreign person' under the relevant law. The Purchaser shall then submit the withheld amount to the Internal Revenue Service along with the necessary tax forms. However, the Seller may be exempted from this requirement if they provide the Purchaser with a duly executed affidavit stating either of the following:
a. The Seller is not considered a 'foreign person' under the applicable law and provides their United States taxpayer identification number.
b. The Purchase Price is below $300,000.00, and the Property will be utilized as the Purchaser's residence.
NOTICES
32. All notices required under this Agreement must be in writing and signed by the respective Party or its authorized agent. Such notices will be deemed effective when sent via one of the following methods: (a) mailed with the return receipt requested, (b) hand-delivered, or (c) transmitted by email to the following addresses:
TO THE PURCHASER AT:
Name: _________
Address: _________
Telephone: _________
Email: _________
TO THE SELLER AT:
Name: _________
Address: _________
Telephone: _________
Email: _________
33. The following addenda shall also constitute a part of this Land Purchase Agreement:
a. Third Party Financing Condition Addendum.
ASSIGNABILITY
34. The Purchaser shall not assign this Agreement without obtaining the prior written consent of the Seller. This Agreement shall be binding upon and inure to the benefit of the respective heirs, executors, administrators, successors, personal representatives, and assigns, as the case may be, of both the Seller and the Purchaser.
EFFECTIVE DATE
35. The effective date of this Agreement (the "Effective Date") shall be the latter of the date on which the Purchaser executed this Agreement and the date on which the Seller executed this Agreement.
GOVERNING LAW
36. The Parties agree that this Agreement shall be governed by and construed in accordance with the laws of the State of Alabama, without regard to the jurisdiction in which any action or special proceeding may be instituted or what any prior choice of forum clause may establish.
SPOUSAL INTERESTS
37. The real estate transaction resulting from this Land Purchase Agreement has received the consent of each married Seller. Further, each married Seller agrees to sign and deliver all manner of documents requested by the Title Company, including deeds and other documents necessary to provide evidence of such consent, as well as facilitate the transfer to the Purchaser of any dower, homestead, elective share, community property, or any other rights which the spouse may have in or to the Property.
SEVERABILITY
38. In the event of any conflict between the provisions of this Agreement and the applicable legislation of the State of Alabama (the "Act"), the Act shall take precedence, and the conflicting provisions of the Agreement shall be amended or deleted as necessary to comply with the Act. Additionally, any provisions required by the Act shall be deemed incorporated into this Agreement.
39. In the event that any terms or provisions of this Agreement are deemed invalid or unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall remain unaffected. Each unaffected term and provision of this Agreement shall be considered valid and enforceable to the fullest extent permitted by law.
NO BROKER OR AGENT
40. Neither Party has any obligations for the payment of broker fees under this Agreement. The Parties confirm that no real estate brokers or agents were engaged or procured for their services in connection with this Agreement or any part of the sale agreement before the execution of this Agreement. In the event that either Party did retain a broker or agent, the Party responsible for employing such broker or agent shall bear the sole liability for any costs associated with their services.
41. This document constitutes the complete and exclusive agreement between the Parties, and it may not be contradicted by any evidence of prior, contemporaneous, or subsequent oral agreements. The provisions contained in this Agreement cannot be altered or modified except by the mutual written consent of both Parties, signed and delivered.
CONSULT AN ATTORNEY
42. Prior to executing this Agreement, the Seller and the Purchaser are advised to seek the counsel of an attorney if any aspect of the Agreement is not fully understood. Furthermore, the Seller and the Purchaser mutually agree to inform each other about the contact information of their respective attorneys, if any, who are handling this real estate transaction.
GENERAL PROVISIONS
43. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Additionally, facsimile signatures on this Agreement shall be considered legally binding and treated as if they were original signatures.
44. All monetary amounts referenced in this Agreement shall be deemed to be in US dollars, and all payments required to be made pursuant to this Agreement shall be made in US dollars unless the Parties mutually agree otherwise in writing.
45. The headings in this Agreement are included solely for the convenience of the Parties and shall not be used in the interpretation of this Agreement. Words in the singular shall be deemed to include the plural, and vice versa. Additionally, words in the masculine gender shall be deemed to include the feminine gender, and vice versa. Furthermore, words referring to persons shall be interpreted to include firms and corporations, and vice versa.
46. Time is of the essence in this Agreement. For the purpose of calculating relevant time periods, every calendar day, except Saturday, Sunday, or U.S. national holidays, shall be considered a business day. Performance of any obligations or deadlines falling on a Saturday, Sunday, or a national holiday shall be due on the next business day.
A business day shall be considered concluded at five p.m. local time in the time zone where the Property is situated.
EXECUTED by _________ on the _______ day of ___________, 20____.
_____________________________
Witness: ______________________ | _____________________________
_________ |
EXECUTED by _________ on the _______ day of ___________, 20____.
_____________________________
Witness: ______________________ | _____________________________
_________ |
RECEIPT
The Receipt of $_________ as earnest money in the form of __________________ is hereby acknowledged on this _______ day of ______________, _______.
Name: ____________________
Address: ___________________
Phone: ____________________
Email: ____________________
REAL ESTATE AGREEMENT CHECKLIST
This list serves as a reminder to the Parties of some of the items and common issues that need to be kept in mind during the completion and execution of this Land Purchase Agreement (the "Agreement"). Please take the time to go through the checklist and identify the items that need to be provided to the Parties.
1. Before the signing of this Agreement, the Seller should:
• Provide any required Seller Disclosures or optional disclosures to the Purchaser;
• Ensure both the Seller and the Purchaser have read through and understand the Agreement and any necessary addenda. Note that there may be additional disclosures under the Real Property Disclosure section of the Agreement.
2. The Parties have to initial or sign on each page at the bottom part of this Agreement after thoroughly reading it.
3. Make sure that the Parties have signed the Land Purchase Agreement in front of a witness who is an independent party to the transaction. The Purchaser and the Seller can sign in front of different witnesses. However, they do not have to be in front of the same witnesses or in the same place. Each witness needs to sign as a witness on the execution (last) page.
4. If any terms of this Land Purchase Agreement are changed, the Parties should initial near the changes to reflect their acceptance of the new terms and conditions. However, the witness does not need to initial the changes.
THIRD PARTY FINANCING CONDITION ADDENDUM
This Third Party Financing Condition Addendum is hereby made part of a Land Purchase Agreement (the "Agreement") between _________, individually and collectively the "Purchaser" and _________, individually and collectively the "Seller" concerning the Property located at _________.
INSTRUCTIONS TO THE PURCHASER AND THE SELLER:
a. Fill in the blank areas and check off the applicable boxes accordingly.
b. Complete and sign a copy of this form prior to the closing of the Real Estate Sales Agreement.
The Purchaser must promptly, and with every reasonable effort, apply for the financing described in this addendum. Upon the lender determining the financial requirements of the Purchaser are satisfactory (e.g. Purchaser's items relating to assets, income, and credit history), financial approval will be deemed valid. If the Purchaser cannot obtain adequate financing within thirty days of the Effective Date of the Agreement, the Purchaser must furnish a written notice to the Seller, upon which, either party may cancel the Agreement and the earnest money will be refunded to the Purchaser within ten days. If a written notice and cancellation are not furnished to the Seller at the designated time, the Agreement will no longer be subject to the Purchaser being able to acquire the financing described in this addendum. Time is of the essence and strict compliance within the time frame stipulated is required.
Each note must be secured by mortgages or deeds of trust. The financing conditions are as follows:
_____ General Financing
a. The principal amount of the first mortgage (excluding any PMI premium) valued at $__________ is payable in full in ______ month(s). For the first ______ month(s), the interest rate is not to exceed ______% per annum and the loan origination, discount, buy-down and commitment fees (the "Loan Fees") are not to exceed ______% of the loan.
b. The principal amount of the second mortgage (excluding any PMI premium) valued at $__________ is payable in full in ______ month(s). For the first ______ month(s), the interest rate is not to exceed ______% per annum and the loan origination, discount, buy-down and commitment fees (the "Loan Fees") are not to exceed ______% of the loan.
_____ FHA Financing
The FHA-insured loan, excluding any MIP, valued at $__________ is payable in full in ______ month(s). For the first ______ month(s), the interest rate is not to exceed ______% per annum and the loan origination, discount, buy-down, and commitment fees (the "Loan Fees") are not to exceed ______% of the loan.
It is expressly agreed that, notwithstanding any other provision of this contract, the Purchaser shall not be obligated to complete the purchase of the Property described herein or to incur any penalty by forfeiture of earnest money deposits or otherwise unless a written statement issued by the Federal Housing Commissioner, Department of Veterans Affairs, or a Direct Endorsement Lender setting forth the appraised value of the Property of not less than $__________. The Purchaser shall have the privilege and option of proceeding with the consummation of the contract without regard to the amount of the appraised valuation. The appraised valuation is arrived at to determine the maximum mortgage the Department of Housing and Urban Development will insure. HUD does not warrant the value or the condition of the Property. The Purchaser should satisfy himself/herself that the price and the condition of the Property are acceptable.
_____________________________
Date |
_____________________________
Signature of Seller |
_____________________________
Date |
_____________________________
Signature of Purchaser |
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