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Land Contract Form PDF Free Download
Land Contract Template
What is a Land Contract?
A land contract is a document that establishes the terms and conditions for the purchasing of vacant land for cash or trade.
A land contract, similar to a standard purchase and sale agreement, details the agreement between the buyer and seller, including conditions, contingencies, and due diligence periods.
Instalment Land Contract
An instalment land contract is when a buyer makes partial payments, each month, after the closing to pay the full sales price.
Also referred to as “owner financing,” it allows a seller to act as the bank and collect principal plus interest payments from the buyer.
Even though the buyer will own the property after the closing, the seller will be a lienholder with the right to repossess the property if payment is not made.
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More Information about Land Contract Template
Land contracts, also known as Deeds of Trust, Trust Deeds, Notes, Contracts for Deed, or Privately Held Mortgages, are seller-financing contracts that let a buyer pay the seller straight for their home throughout time without the use of traditional lenders.
Rather than paying a full amount of money at settlement, or closing, the buyer is paying an agreed-upon money down-payment when the signing of the land contract, and further decides to make frequently scheduled payments up until the price has been paid fully.
The contract might specify monthly payments until the whole amount has been settled, or it might demand the last balloon payment at some settled time at some point.
A written land contract is necessary for buying real property.
It stands as proof of the agreement made between two the buyer and seller of the land.
Some of the most important components found on a land contract are written below.
Land Contract Basic Format
The following describes the characteristics of a land contract:
1. Payments are made in instalments based on agreed schedules.
2. The seller retains the ownership of the property while the sum of the principal, including the interest rate, is not yet fully paid.
3. The buyer typically occupies and uses the property even if he still owes the owner some amount of the purchase price.
4. Lump sum payments can be made to clear the remaining balance.
5. The seller issues the buyer the deed once the balance is paid off.
6. Once the balance is paid, the legal transfer of ownership occurs with a conveyance.
How a Land Contract Works
Step 1 – Make an Offer
In order to make an offer for purchase, the buyer will need to complete the land contract on their own or with the assistance of a real estate agent or attorney. The buyer will need to enter all the information about the land, which can be obtained from the local assessor’s office, and list any conditions for the sale.
Step 2 – Wait to Hear from the Seller
After the contract has been finalized by the buyer, the seller will need to either reject, counter-offer or accept the terms of the agreement.
If accepted, the buyer must pay the earnest money deposit (use the Earnest Money Deposit Receipt) and begin their due diligence period.
In most agreements, there is a due diligence period that allows the buyer to conduct tests on the property to ensure it can be used for the buyer’s intentions.
This may include conducting environmental tests (Phase I, Phase II, etc.), obtaining permits from the local government, or any other contingencies mentioned in the agreement.
Step 4 – Closing on the Property
After the due diligence on the property has concluded and contingencies have been waived, it’s time to prepare for the closing.
If the buyer is seeking to pay cash, then the closing can occur almost immediately.
If the buyer has decided to obtain financing, then most lenders will require an environmental report (i.e. Phase I) and have the property appraised by a third party.
After the buyer has completed the necessary steps to obtain funds to purchase, the parties may schedule a closing date.
At the closing, the seller will verify the funds have been received and sign over the deed to the property to the buyer.
The deed acts as the title to the property proving the buyer’s ownership.
It is required for the deed to be filed with the Registry of Deeds in the county where the property is located.
There is usually a tax on property sales calculated on what is known as a “mill rate” for each jurisdiction.
Unless otherwise agreed upon, this tax is usually split between the buyer and seller.
| Author | – |
| Language | English |
| No. of Pages | 9 |
| PDF Size | 2 MB |
| Category | Form |
| Source/Credits | eforms.com |
Land Contract Form PDF Free Download