A land contract template is a legally binding contract between the buyers and sellers of the real estate. This agreement allows settlement of payment in installments within a defined period unless the total price is fully paid. The agreement must meet state requirements and highlight the details of the payment the buyer and the seller have to agree on.
Furthermore, a land agreement is a wholesome and precise record. It serves as evidence of the transfer of ownership of property from a seller to a buyer. It will generally provide you a closing date for the transaction. Other names of the land contract are;
- Contract for deed
- Land installment contract
- Agreement for deed
- Installment sale agreement
- Agreement to purchase and sale
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Land contract calculators:
Land contract calculators are websites that enable people to enter information for new or existing land loans. By doing this, they calculate how much they are expected to pay as installments. You may also like New Landlord Introduction Letter.
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How to craft a land contract?
Let us discuss below the crafting of a land contract;
Title for the land contract
At first, you have to make a title for the contract that should be reflective of the contents of the agreement.
Next, enter the effective date of the contract that indicates when the document was created.
Give details of the parties to the contract
Here, you have to provide the official names and addresses of the concerned parties.
In this section, give a legal description of the property to be traded. The description should explain the physical size of the property and its location.
Tax parcel information
The contract should also contain the property tax parcel information, including a Parcel ID number or the Tax map. This information should be written at this point to clearly identify the property for tax purposes.
Additional land definitions
Any additional information that is used to identify the property should be written down at this point.
Earnest money is money paid as a deposit. It indicates intent or commitment to purchase or reserve property to be purchased. The date when this payment is expected should be mentioned.
Cost of land
In the contract, specify the amount the buyer is expected to pay as purchase price to get ownership of the property. It should be provided in figures, numerically, and the monetary unit.
Unlike earnest money, a down payment is automatically part and a portion of the purchase price. The contract should declare the down payment and the due date.
To raise funds for the purchase of a property, there are various ways buyers can employ. Paying the total amount upfront is the first option.
In case, the buyer is using a bank as their financier then mention it in the contract. Moreover, there are different types of financing the buyer can use;
- Conventional loan
- FHA loan
- VA loan
Letter of credit
This letter is given by a financial institution in which they promise the seller that they will get the exact amount they are owed at the mentioned time.
For raising funds, the other alternative is having the seller provide the finances through credit. The following should be declared in the contract;
- Loan amount
- Down payment
- Interest rate
Sale of another party
Sometimes, the purchase of a property is based on the buyer’s sale of his or her personal property. It should also be declared in the land contract.
During the term of the land contract or at closing, the sale of a property sale will come at some costs.
Other elements to include in a contract are;
- Closing date and time
- Deadlines for land survey
- Due dates for the property inspection
- Property cures and maintenance
- Earnest money return
- Governing law
- Offer expiration
- Additional terms and conditions
- Notary public
Hence, a land contract template is an important document for people who want to acquire property but aren’t able to raise the full asking price.