5 Things Every Land Offer Needs

1. What is the price going to be? This would seem to be an obvious thing to be sure you have in your land offer, right? And, it is critical that the offer price be in writing. The amount, or benefit, that is offered is the “consideration” and is an essential part of a real estate contract and an offer for land is not exception.  Also, be sure to include any financing information – such as whether it’s an all cash deal or if you’d be taking out a loan.   And make sure it is noted whether or not your offer is contingent upon you successfully obtaining a loan within a certain period of time.  

1. Notice that I said written contract (above). The statute of frauds is a law that states that certain kinds of contracts must be in writing to be enforceable. A purchase agreement for land typically would fall under this statue (in most, if not all states). Even if the statute of frauds does not apply to your area, it would still seem to be in everyone’s best interest that the offer be in writing.

2. Every land offer should have a time specified as to when the land offer must be accepted by.  This is very important.

3. Every land offer needs to be signed by both the buyer and the seller, before the deadline date of when the offer expires. (number 3 above)

4. The agreement should say if earnest money – a “good faith deposit” – is being offered and, if so, where will it reside until closing (the seller, trust account of an attorney, title company, real estate brokerage, etc.,)

Of course there are several other things that a land offer would normally include: information regarding any present leases (if it is some land that is being leased by a farmer, for instance); what other things may be included or not included with the sale – in other words, what stays, what goes? (Do you want to let the buyer have that old hay wagon still sitting by the back gate, for instance?); what attorney’s/title companies are being used to do an opinion of title; when the buyer would take possession; etc.,

Basically you – or any seller – can put anything in an offer that they want. Of course, for offers to be legal, they cannot promise illegal activities within the scope of the offer. Illegal offers are not legal…well duh!

Valid legal land offers also need to be made by competent parties, with each party not being under any sort of duress that forces them into the contract at the time.  

Keep in mind that by signing any sort of written offer to purchase, that you become bound by it’s terms.  Make sure you look things over in detail before signing! You should have an attorney on your side that does this with you!  

Yes, you do need an attorney (I heard that question coming).  Well, technically you don’t but I sure suggest having one to help you from the start of the offer process through the end of the closing.  For one thing — this is where you should get your purchase agreement — from a good local real estate attorney.  That is the best way to ensure that you are using a purchase agreement that includes the necessary components of local and state law.  You can also use forms provided by a local real estate agent or brokerage  (I suggest using an agent with the Realtor designation — they have access to the most recent forms available, as provided by their respective state regulatory agencies).