Vacant land contracts are typically used to purchase land in Florida. What are the main components of these contracts and what should you look out for?
I’m Ray Seaman with eXp Realty, Your Florida Land Agent.
First, an important disclaimer. I’m not an attorney, and if you have questions about a vacant land contract – one you’re putting together or have received – I strongly recommend you talk to a real estate attorney. The content in this video is not legal advice.
There are six key components worth paying attention to, but this is by no means a complete list.
One, there is Purchase Price which says how much the buyer is willing to pay for the property. There are subsections here which detail the amount of money the buyer will initially deposit (aka their “earnest money deposit”) within a certain time period after the contract becomes effective.
Two, there is the Effective Date and Closing Date. This says when the contract goes into effect, and when the transaction will close, or end.
Three, is the Financing section, which details how the buyer is paying for the property – all cash, with third party financing, with owner/seller financing, and/or assuming the seller’s mortgage on the land.
Four is Title Evidence and Examination, which defines who will be paying for the title insurance (and therefore who will select the title company) and when title evidence will be delivered to the buyer.
Fifth is the Due Diligence Period, which says how long the buyer can inspect the property and possibly terminate the contract without losing their earnest money deposit.
Six are Closing Costs, which details what closing costs are paid by the seller vs the buyer.
These are some of the components of a vacant land contract you should pay attention to, whether you’re a buyer putting one together or you’re a seller reviewing one. Again, if you have questions about your contract, it’s a smart move to consult a real estate attorney.
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