Who should be named in the contract, and is the land described correctly?
Every person on the deed should sign as seller. If an owner has died, the estate representative or the heirs may need to sign, which can take probate or an heirship affidavit first. See co-owners and heirs selling land.
The property should be described by its parcel number and its legal description from the deed, not only an address. Check that the acreage matches. A wrong description can delay closing or, worse, transfer the wrong land.
What should the price and earnest money terms say?
The price should be a fixed number. Watch for language that lets the buyer "adjust" the price after inspection without a clear reason, or that ties the price to a future survey without saying how it changes per acre.
Earnest money shows the buyer is serious. It should be deposited with the named title company or closing attorney within a few days of signing. The contract should say when the buyer gets it back (usually if they end the deal inside the due diligence period or a contingency fails) and when you keep it (usually if the buyer defaults after that). See earnest money on land.
How long should the due diligence period be?
Long enough for the buyer to check what matters for land: road access, survey, zoning, flood zone, utilities, septic and title. For simple vacant land many contracts use a few weeks. Rural tracts that need a survey or a perc test can take longer.
The risk for a seller is a long period where the buyer can walk away for any reason and get all the earnest money back. During that time your land is off the market. Texas's state-promulgated land contract handles this with an option fee paid to the seller for an unrestricted right to end the deal during a set option period. Whatever form you use, know when the buyer's free exit ends.
What is an assignment clause, and should I worry about it?
An assignment clause lets the buyer transfer the contract to another buyer before closing. Many land investors use it: they sign a contract, then look for an end buyer who pays more. That is legal in most situations, but it changes who you are really dealing with. If the first buyer cannot find an end buyer, the deal may stall until the due diligence period runs out.
Ask the buyer in writing whether it will close in its own name with its own funds. If you do not want an assignment, you can ask to strike it or to require your consent. See land buyer stopped responding and how to check a land buyer is legit.
Who pays the closing costs, and are back taxes covered?
The contract decides who pays what, even where local custom says otherwise. Look for each item: the owner's title policy, escrow or attorney fees, recording fees, any state transfer tax, the survey, and prorated property tax for the current year. If you owe back taxes or a lien, the contract should say they are paid at closing from your proceeds, so you do not need cash up front. See closing costs when selling land and selling land with back taxes.
Can I back out of a land sale contract after I sign it?
Usually not on your own, unless the contract gives you a way out. A signed contract binds both sides. The FTC's Cooling-Off Rule, which gives buyers 3 days to cancel some sales, does not apply to real estate. A seller who refuses to close can be in breach of contract.
What a buyer can do then depends on the contract and state law. Common remedies include asking a court to order the sale (called specific performance), suing for damages, or ending the deal and getting the earnest money back. Some buyers also record a memorandum of the contract, which can cloud your title until it is released.
- Ways a seller may lawfully end a contract: the buyer misses a deadline, fails to deposit earnest money, or does not close on time, if the contract allows termination for that.
- A contingency that is the seller's, such as finding a replacement property, if one was written in.
- A mutual release that both sides sign. Many buyers agree if asked early.
- A legal defect in the contract itself, such as a missing owner's signature. Only an attorney can judge that.
- General information, not legal advice. Talk to a real estate attorney in your state before you stop performing under a signed contract.
Can the buyer back out?
Often yes, more easily than the seller, because most land contracts give the buyer a due diligence period and contingencies. If the buyer ends the deal inside those terms, they usually get the earnest money back. If they simply fail to close after those terms end, the contract usually lets you keep the earnest money as your remedy. Read both the termination and default sections.
What red flags should stop me from signing?
Do not sign until these are fixed.
- Any fee you must pay to the buyer before closing.
- No title company or attorney named, or one you cannot verify on your own.
- Blank spaces for price, dates or earnest money.
- Pressure to sign today, or a contract sent only by text with no company name.
- Wiring instructions sent by email. The CFPB warns that scammers send fake ones near closing; confirm by phone with a number you trust.
How EasyLotBuyer handles this
EasyLotBuyer was founded in 2021. You get a written cash offer within 24 hours. There are no fees or commissions, and we pay closing costs. Back taxes are paid at closing from the sale. Closings go through an independent title company or attorney, and we can close in as few as 7 days. Read any contract, ours included, before you sign, and ask questions.
Get a cash offer for your land