When Selling Bare Land to a Real Estate Investor, What Should I Look Out for in the Contract?

When Selling Bare Land to a Real Estate Investor, What Should I Look Out for in the Contract?

Hi, I’m Beth with TB Properties Buys Land. When it comes to selling your vacant land, working with a real estate investor such as TB Properties Buys Land can be very attractive. One, you’re able to sell quickly: you don’t have to worry about your land sitting on the market forever. Two, you’ve got a price that is guaranteed, and you don’t have to worry about what you’re going to pay the realtor and how long it’s going to take to get paid. Even so, there are risks. How do you make sure that you’re not going to get scammed when it comes to selling your vacant land to a real estate investor?

One of the things I thought I would discuss today is the contract that you sign between you and whoever you are selling that property to because contracts can be scary things. If you don’t know what you’re signing you can get into a lot of trouble. When you work with the realtor, you’ve probably seen their 14 or even 20 plus pages long contract and there may even be a few contracts they send over to sign. When working with a real estate investor, everyone’s contract is different so I cannot tell you if another’s contract is legit or has the potential to scam you but I can discuss and explain our contract so that you know what to expect when it comes to selling your property. Our is so very simple. It calls out you as the seller, we as the buyer, and it calls out the specific property you are selling. It states the property’s location in terms of county and state, includes the property’s legal description, and it’s APN or the assessor’s parcel number. We state the price in US dollars. We state that it will be a cash sale, and that you are not going to accept a financing contingency. This means you don’t have to wait on us for loan approval, appraisers and all of the things that can dramatically hold up the sale of your property. We list the type of deed that will convey your property, a warranty deed and this is simply a directive to Title on how to prepare the deed. They’ll put together a warranty deed for us when it gets conveyed.

The closing cost verbiage: this is important. Our contract states that we as the buyer will pay for all escrow fees. That is your side of the Title Company fees as well as ours. It also states that we will pay for title insurance so that you will have title insurance, that we will pay for any transfer taxes if there are any, and that we will pay for the current year’s probation of property taxes as well as the recording fees that go to the county. This is clearly written as a complete list of what we as the buyer are going to pay for when it comes to purchasing your bare land.

When it comes to seller, which is you, the only thing that we include that you could potentially pay for with regards to closing costs are if you have any liens. The contract states that you’re going to cover any liens on the property. To be honest, that statement is simply a cover your butt statement and most of the time our sellers don’t have any liens but still, we throw that in there.

Next, we include the closing date on the contract. We also state that you have the right to cancel by written notice with email being acceptable. Next, it states that we each represent ourselves, that the agreement is binding, and we have a deadline in which that you need to sign the contract. You are always able to ask for more time in which to sign the contract but we have to include a sign-by date or else the Title Company may not have enough time to close. If you need more time to sign, we simply need to adjust the closing date on the contract and resend. It’s not a high-pressure thing whatsoever.

In sum, when you look at our contract, it’s very simple and very easy to understand. It’s only a single page and we try to keep it straightforward. One thing that I wanted to reiterate is that we’re going to pay in cash. Some real estate investors, chose to do things differently. Some may try to seek financing during this period, which could hold up the sale of your land. Others may have the money in order to purchase in cash and they will try to sell your contract to someone else in the meantime. If they cannot find a seller for the contract, that leaves you with time wasted and no one to buy your property. Other real estate investors may put your property under contract but try to sell your property while it’s in the closing process. Again, if they cannot find a buyer for your property during the closing, they’ll delay your closing date and continue to push it off until they can find someone. It’s nice to know these things in advance, especially if you are planning on closing quickly and are expecting the cash to use for something. You will want to make sure that whoever’s buying your property is paying in cash, and they’re actually going to buy your property on that closing date, so that’s really, really important.

I wanted to explain our contract to you so that you understood how simple and easy it is. You’re always, always welcome to go and hire a real estate attorney in order to review. We had a young lady in which we purchased her family’s property from her, and they had a family friend who was a real estate attorney, and he said the contract was really easy and straightforward, so there was no problem for them to sign it, so you’re welcome to do that too. If you have questions about selling your bare land to a real estate investor, such as TB Properties Buys Land, please reach out to us. We pay in cash. That means we’re able to close faster. We close through a title company so that you are protected. This means you do not have to be worried about checks bouncing, or being scammed. We pay the title company, title pays you, everything’s done just like when you’re selling your home. But again, please reach out to us. We’re happy to work with you, and we look forward to hearing from you. Thanks again.

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