Thu January 19, 2012, 10:35am
Vacant Land Purchase Agreement Forms and Information - Real EstateVacant Land Purchase Agreement
The Vacant Land Purchase Agreement is intended for utilization of vacant land or vacant subdivision lots, exclusively. The contract is divided into ten sections, each serving an important consideration. Read on to find out more.
RECEIPT identifies and confirms the relationship between the broker and buyer. This section recognizes the buyer and the broker accepting the earnest money.
Earnest money is the amount of promised cash, which the broker is obligated to deposit, punctually. If the check is dishonoured, the seller may immediately cancel the Agreement.
OFFER section recognizes the property being transferred. Under this segment, Incidental Improvements and Additional Existing Personal Property are explained.
Any improvements or fixtures on the property are transferred in “AS IS” condition, under Incidental Improvements.
Under Additional Existing Personal Property, all specified additional personal property with no monetary value is transferred “AS IS.”
PURCHASE PRICE indicates the sales price and the amount of down payment. The agreement further states that if the buyer fails to produce the down payment at the close of escrow, then the contract is breached and the earnest money will be subject to penalty.
Closing Date is the agreed date of closing the escrow, between the seller and the buyer. If the recorded date is breached, the contract stands cancelled.
At the close of the escrow, possession and occupancy is to be delivered to the buyer.
FINANCING OPTIONS section involves the details of the new or an existing loan. If the loan provision is not consumed, then both parties should cancel out this section.
The first type of loan option available for purchasing vacant land/lot sales is Seller Carryback. It addresses the loan amount, interest rate, term, payment intervals, type of financing instrument, account servicing, late payment, priority of the loan, and default rate.
The parties must specify if the sale is dependent on the seller's approval of the buyer's credit, and the buyer must furnish a current credit report within five days. Further, financing options indicate if the loan is due on sale, and the carryback will be secondary to a construction loan.
This section also tackles the fact- the buyer acknowledges that he/she has personal liability on the carryback in case of a default, unless otherwise agreed.
The buyer agrees to provide the seller, a copy of the loan policy, and a delinquency notice will be sent across to the seller for any unpaid taxes if the buyer fails to furnish a tax service account.
TITLE AND ESCROW section deals with providing the marital status of the buyer(s) and the details of the Escrow Company.
The company is instructed to furnish a title commitment document with legible copies of Standard Owner's Title Insurance Policy and Schedule B documents, at seller’s expense. Meanwhile, the seller must furnish the details of the title via general warranty deed
IRS and FIRPTA Reporting is to notify the buyer if the seller is a foreigner. According to the Federal law, the buyer must withhold a 10% tax on the purchase price, unless an exemption applies.
DISCLOSURES section involves Environmental Due Diligence, Seller Property Disclosure Statement, Seller Notice of Violations and Affidavit of Disclosure.
The seller indicates that no hazardous substances are found on the property, except the material as disclosed in Environmental Due Diligence. Meanwhile, the buyer vows to investigate the previous ownership and use of the property in respect to commercial practice.
The agreement continues to focus the option of Seller Property Disclosure Statement, where in the buyer requires the seller to disclose it within 5 calendar days or waives off the disclosure.
The seller in the agreement represents that any violations notice has not been received and will immediately notify the buyer upon receiving any.
The seller is obliged to furnish the buyer with Affidavit of Disclosure, if the property is located at an unincorporated area and less than five parcels of land are being transferred. At the close of escrow, the Affidavit must be received.
INSPECTIONS AND WARRANTIES sections indicates the buyer’s responsibility to inspect every inch of land for water quality, any endangered species, presence of sex offenders or other heinous crimes must be investigated during the inspection period.
The inspection period is 15 days, where in the buyer must verify the square footage/acreage of the property.
Flood hazards, road maintenance are other areas covered under this section.
REMEDIES sections employ the disclosure of every remedy applied to rectify a problem.
Finally, ACCEPTANCE section closes the deal, with duly signed signatures from the parties.