The Contract
The land sales contract is the agreement on paper that is legally binding. The contract will spell out each of the terms of the sale in writing. Some of the most basic and more important details include, but are not limited to: Total Price of the property, down payment, Interest rate, monthly payment amount, and all the legal aspects. With any contractual agreement, make sure you read the ENTIRE contract. Do not sign any document unless you fully understand all terms.
In order to ensure accuracy of information, please see the list below:
- Triple check the spelling of your contact information: Name(s), Address
- Make sure the property parcel ID and legal description are correct
- Understand the terms of the contract: total price, down payment, monthly payment, financing term, document preparation/ recording fees, closing date etc.
- Read the entire contract along with all of the fine print. The contract spells out the legalities of the financing process. Please keep in mind that you are not the legal owner of the property until the property has been fully paid and the deed conveyed.
Most land sale contracts have strict restrictions on what you can and cannot do during the financing term.
Some of the things that you may or may not be limited to during financing may be:
- You may not build on the property unless permitted by the seller
- The property cannot be resold or the contract assigned
- Liens or encumbrances cannot be placed against the property
- You may visit the property at any time
- A survey may be conducted
If you plan on building on the property and are financing the land, be sure to pay for the property as soon as possible. Many land sellers offer no penalties for early payments. Also, they may allow you to build on the property as well, the easiest thing to do is to approach the company/individual you are financing with and work out an agreement that will work out best. |