7 Things Not To Miss When You Sign Land Purchase Agreement!
1. The Closing Date- Every land purchase agreement should have a closing date, and the date should be far enough away to ensure that all necessary research and documents can be available. Whether the purchase agreement is for mountain land for sale, a home in the city or something in between, a common mistake is not allowing enough time after signing before the closing date for the necessary processes and procedures.
2. The Title Search- Owner financed land should include a title search the same as a bank financed purchase, and this will ensure that there are no problems or obstacles in the way of obtaining a clear title once the full payment is made for the property.
3. All Required Signatures- Every land purchase agreement must be signed by all of the parties, and a common mistake is a missed signature. This is especially true if one of the parties is a business corporation or a partnership legal entity; because the right company officer must sign the agreement or it may not be legally binding.
4. The Type of Interest Being Charged- Whether you will be using land investment companies or you have reached a private agreement, make sure you know the type of interest being charged. Is it a flat interest rate or compounded rate? Will the rate stay the same as a fixed rate or is it a variable rate? This can have a big impact on the final cost of the land purchase.
5. Recording the Purchase Agreement- A land purchase agreement should be recorded with the proper authorities and agencies as soon as the documents are signed by all the parties. Recording the contract protects the buyer and seller both, but this is a missed step that is commonly neglected.
6. A Legal Consultation- When purchasing land for sale by owner you should always get legal advice. It is better to pay for a short legal consultation to ensure the contract is legal and clear than it is to find out later that a mistake or missed clause will cost significant money and time to clear up.
7. An Immediate Title Commitment- An immediate title commitment should be included with the land purchase agreement, as well as a listing of any other business or individual who may have a claim to the property title.