Take advantage of our Land Purchase Agreement template that allows you to make the transaction of land straightforward. Our outline is easy-to-use, so you can make your valid document stress-free.
Last Update May 18th, 2023
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- What Is a Land Contract
- Elements for a Land Purchase Agreement
- How to Write a Land Contract
- Land Purchase Agreement Sample
- Land Purchase Agreement FAQs
What Is a Land Contract
A Land Contract is a legal document that sets the terms and conditions for the purchase of land. This purchase finalizes when one party provides the other with a determined amount of cash or trade.
A Land Contract goes by alternative titles:
Land Purchase Agreement
Land Sale Contract
Land Purchase and Sale Agreement
A Land Purchase and Sale Agreement works similarly to an ordinary purchase and sale agreement. The terms, protections, and time limits are all included in the agreement.
Land Contracts are extremely useful to both parties as they present numerous benefits to both the buyer and seller.
Buyer benefits: This type of agreement can be beneficial to buyers who do not have a good credit history. Buyers unable to get a mortgage can pay directly to the seller.
Seller benefits: Sellers can ask for a higher price by offering this type of contract to buyers because it does not require a buyer’s credit history. It would also be easier to ask for a larger money down payment.
Use our template to make it simple to create a Land Contract.
Installment Land Contract
Using an Installment Land Contract offers you another way to complete the transaction for land.
Deciding the payments will be paid in installments, each month, means you are making an Installment Land Contract.
The selling party can act as a bank and receive the payments, and the purchasing party will have the land.
If the selling party does not receive payments, they will have the right to retake the land from the buyer.
Elements for a Land Purchase Agreement
To create a valid Land Purchase Agreement, there must be 2 parties that agree to the transaction, a buyer, and a seller.
You must reach an agreement with the other party regarding the price and terms and conditions.
Using a purchase and sale Agreement for land will help to protect the rights of both parties.
A traditional Land and Sale Agreement works in the following way:
The seller keeps the title until the buyer pays off the amount that is owed.
The buyer and seller can choose how the installment payments are.
The buyer receives an equitable title.
Once the buyer pays off what is owed, the land will fully belong to them.
How to Write a Land Contract
To further clarify the requirements for creating a Land Contract, we have included the following steps.
Review the following parts of a Land Contract to make the writing process easier when creating your document.
Details of the Parties – Include the date the agreement will be signed, as well as the names of each party in the agreement.
Property Information– Describe what the property is. This includes the space, type of land, and the exact location of the land.
Sale and Purchase – Add the name of the state and city that will be included in the agreement to sell and purchase between both parties.
Price of Purchase – Put the amount of money that will be given to complete the purchase of the land. This also includes how the money will be paid.
Title and Survey – Include that the buyer will accept the title and that facts are disclosed by the survey of the property on a specific date by a surveyor.
Inspection Period – Add the time frame that will be known as the inspection period. This begins on the effective date until a determined number of days after.
Conditions for the Closing – Make a selection if the closing will be conditioned upon the purchaser’s ability to finance or not.
The Closing and Time – Include a statement that includes when the agreement will be made official, in other words, the date of closing.
Transaction Costs – Included the costs of the transaction, as well as how these costs will be distributed.
Closing Documents and Deliveries – Write what the selling party must bring to the closing. This includes writing the designation of exhibit.
Casualty and Condemnation – Determine what amount of money will each party be responsible for regarding repairing damages to the property.
Default and Waiver – Include the amount of days the seller or purchaser will have to cure a default, as well as the money that could be given to the seller for damages by the buyer.
Notices – Write the contact information of both parties for receiving any notifications regarding the Land Purchase Agreement.
Resolving Claims or Disputes – List the options available that can provide a solution to any claims or disputes that may arise.
Governing Law – Add the state that’s laws the Land Contract will be governed by.
Offer to Purchase – Include when the offer to purchase will be signed and the different options regarding the offer to purchase.
Additional Terms and Conditions – Add any additional terms and conditions that you would like to add to your Land Purchase Agreement form.
Signatures of Both Parties – In the final part, add both your names and signatures and the names of any representatives involved. Finally, add the date of the agreement.
Land Purchase Agreement Sample
To give you a better understanding of what a simple Land Purchase Agreement looks like, we have included a sample below.
Along with this sample, LawDistrict provides a Land Contract template that allows you to write your contract with much less effort.
Using both the template and sample, you can make the writing process stress-free.
Land Purchase Agreement FAQs
To clarify any doubts you may still have about Land Purchase Agreements, we have replied to some of the most frequently asked questions on the subject.
Review the answers below to have all the information necessary to create your document.
What Happens If the Buyer Fails to Make the Land Contract Payments On Time?
The seller may have the right to retake the land that is purchased if the buyer does not provide payments on time.
The selling party can act as a bank and if payments are not made, the land can be repossessed.
How is Land Contract Interest Calculated?
The interest rate is a defined part of the land agreement. Both parties can agree to the rate of interest before signing the contract.
This rate can also change if the terms and conditions allow it to.
Who Pays Property Taxes on a Land Contract?
The buyer is the party that must pay the property tax after the completion of the Land Contract.
It is not the seller’s responsibility to pay this tax, it will be left to the purchasing party.