SW Financial Literacy
Are you planning or hoping to buy farm ground?
Then you need to know the basics of a purchase agreement.
The purchase agreement will outline the purchase price and legal description of the property exchanging ownership, along with listing the name of the buyer and seller. In addition to the obvious, here are a few other items you need to be aware of:
Does the closing date giving enough time for financing to be completed? Typically financing takes up to 30 days after the purchase agreement has been signed. Any government program for alternative financing may take longer and if a survey is needed, they cannot typically be completed within a 30 day window.
How are the current year’s taxes being paid? If you don’t get access right away or will miss out on some of the income potential that year, the sellers may pay taxes. Often the tax bill is prorated between buyer and seller.
What is the required down payment to the seller when the purchase agreement is signed? You may need to make an initial payment or earnest deposit which could be tied into your long-term financing later.
Will seller be covering of some of the fees? Closing fees could be split 50/50 or paid 100% by the buyer depending on terms.
Are there any easements on the property or is an easement needed to have proper access? Check with a realtor or attorney to make sure there isn’t anything unique about the property that could cause legal trouble later.
Whether you are asked to draw up your own purchase agreement or are handed one by the seller, always have it be reviewed by an experienced attorney. Good luck with the new ground and congratulations!
Have a Happy New Year!
Grant
All views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated. Information provided is authentic to the best of my knowledge, and as such, is prone to errors and the absence of key details. The content of this blog is for entertainment and informative purposes and should not be seen as professional advice to finances or any other field.