Selling Your Land STEP 2: The Purchase Agreement

Selling Your Rural, Vacant Land Explained: STEP 2, The Purchase Agreement

Hi, I’m Beth with TB Properties Buys Land, and this is the second in a series of three videos in which we detail the process of how we purchase land, from land sellers like yourself.

In the first video, we talked about the first step of the process, which is really you getting in touch with us and then agreeing upon a price. Whether you did a Google search and found us online, or whether you got a letter in the mail with an offer to buy your rural vacant land, getting in touch with us is the first step of the process, and then agreeing upon a price to move forward.

The second step, which we’re going to detail today, is the purchase and sale agreement that we’re going to send out to you to review and to sign. Once both parties, you, the land seller, and we, the land buyers, sign that agreement, that goes off to the title company for closing. And that will be covered in the third video in this series.

So, the second step is the purchase and sale agreement. Once we agree on a price, we’re going to send you a one page purchase agreement. If you’ve ever bought or sold a house and worked with a realtor, your purchase and sale agreement that you got from them was probably pretty lengthy. We’ve seen some 12 pages, some that are 17, 18 pages long, and they’re kind of complicated. You almost feel like you have to have a real estate attorney in order to understand it!

When working with us, you’re always welcome to hire a real estate attorney or somebody who’s got experience in these matters, to review the agreement or to ask them for help. But we try to make the purchase agreement simple enough and short enough that you don’t have to do that. So, I thought I would walk through this step of the process and how this works. I mean, this simple agreement, as you can see, is just one page. There’s a date on there, and then we call out who the land buyers are and the land sellers.

It is important to note that whoever is on the deed to your property is going to have to sign this agreement. For example, if you’ve got brothers and sisters on this, we’re going to have everyone’s name on there who’s going to sign. We’re going to have your address as well, and at the bottom, we’ll end up having your phone number and your email address, if you’ve got email. If you are married, and maybe your spouse is not on the deed, we’re still going to have your spouse on this purchase agreement. That’s going to be important to have. We call out the state in which this property is located and the county. And then we have the property description and the title company is going to require that we have the legal description on here, which we have that information. We’ll put the legal description on there. We like to put the parcel number, or the APN as well, that way it’s just easy to have all that information in one place.

The next heading here is price. We’re going to have the price that we agreed upon in US dollars written out here. And then we’re going to say for payment that the buyer, which is us, will be a cash buyer. Now, this is important to you because it means that we’re going to be able to close on this transaction a lot faster. If the person who’s buying the land from you has to go and get a conventional loan or some sort of funding, that can drag the process out a lot longer. We’re seeing especially in these days of COVID, 60-90 days and longer in order to get an appraiser out there and get funding from the banks. With cash, we’re able to close as fast as two weeks in most cases. In some cases, it’s slower depending on the area, but we’re able to close quickly because we have cash.

Title and Conveyance. I’ll read this out. “Seller will transfer marketable title to the property by warranty deed. Seller will clear all liens and encumbrances from title.” You don’t have to worry about the warranty deed. The Title Company will take care of that. We’re just calling out the type of deed that we want from the Title Company. Now, liens and encumbrances. If you have a mortgage against your property, or if someone’s taken a lien out against your property, we’re not paying for that. We’re paying for the property. With this statement we’re covering ourselves by simply saying, “If there are liens, you are going to pay those.” That’s what that means.

This next heading is called Closing and this is important for you to always pay attention to. It reads: (A), the buyer, which would be us, will pay for “all escrow fees, title insurance, transfer taxes, prorated property taxes, and recording fees for the property.” That’s just about everything. (B), the seller, which would be you, will “pay for any liens against the property.” We already said that in the heading before that, and I want to remind you that’s the only thing the seller is responsible for in the closing costs. So the price that we’re agreeing to pay you is the price that you’re going to walk home with. And that’s what you want… This is the section of the contract that would be fine print if we had fine print. Finally under Closing (C), this transaction will be closed by a reputable title company, and we’ll call out the title company in that note.

The next heading is closing date, and we put a date on there. If it’s cash, if there’s no title issues, I try to be aggressive and put a two to three week closing date on there, depending on where we’re located.

Disclosure: this one is pretty simple. Each party represents itself is what we call out.

Assignment of Contract: this may be a little confusing, but it is exactly what it sounds like. We simply reserve the right to assign this contract to somebody else. It doesn’t mean you’re going to get any less money from the transaction or that anything will change. We’ve never done this before, but we do reserve the right to assign this contract, let somebody else buy the property from you instead of us should the need arise.

Binding agreement. It’s binding on all involved, the buyer and the seller, which is pretty standard.

Finally, we have a deadline for acceptance. If you tell us today “Yes, I’m ready to sell my property,” and we send this Purchase and Sale Agreement to you, we’re going to give you two to three days to sign the agreement and get it back to us. Some of the reasons for that are, if we put an aggressive closing date on here and you take a week to sign it, well, now we’ve lost a week of closing and the title company can’t do that. If you need more time for your real estate attorney or somebody to look over the agreement, no problem. We can always send you a new purchase agreement and push those dates out a little bit farther.

And at the bottom, we’ve got everyone’s name, your email and your phone number, and that all goes to title. With that, this is step two of the process. Step one is getting in touch with us, agreeing on a price. Step two is getting the purchase agreement and now stay tuned for the next video in which we talked about step three, where the Purchase and Sale Agreement goes to the title company.

If you have any further questions, and if you need more detail, please feel free to reach out to us. Give us a call at 214-699-4455, shoot us an email, or find us online at our website and reach out to us there. I hope this makes sense, and we look forward to working with you, should you choose to sell your rural vacant land through TB Properties Buys Land. Thank you.

For the third step in the process, you can find that here.

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