What documents do you need to sell land?
May 14, 2020 Land For Sale
Real estate transactions are always paperwork heavy. They aren't as easy as going to the store and walking away from the owner of a new tract of land. If you are buying the property, you're in luck because you end up primarily signing papers provided by the seller. Having a real estate agent involved will make everything easier for both parties as they provide most of the documents required. If you are selling land, you will have two rounds of documentation sourcing. The first round will be the documents to help acquire an offer, and the second round is the paperwork required to close the deal.
Round 1 - Getting an offer
When you go to post your land, there will be some things you can do to make the property more appealing to attract potential offers. You are likely asking a fair price, but that is still a lot of money for the purchaser, so they will want to do their homework before making an offer. Gather anything that can make your property more attractive. Here is a list of papers you may want to gather:
- Title to the property
- Recent Appraisal (for your use)
- Map of property lines and any associated buildings
- List of assets being sold with the land
- Property taxes
- Paperwork going over leases, easements, or anything that may affect your property
- Papers that show proof of income if you have an income source on the property
While some of these papers are publicly available, you want to have everything ready that will make you more knowledgeable, and that will make a potential buyer more comfortable with the deal. They will want to know everything about the property and what they are buying. Does it have agricultural value producing income? Is anything being included that they won't have to spend money on later? Where are the property lines? Who currently has access to the property? What flaws or features affect the property both positively and negatively? Having all this information will help get offers and make you ready for the next round of documentation.
Round 2 - Closing the Deal
Besides listings and doing showings, this is where having an experienced real estate agent can make your life very easy. Once you receive and accept an offer letter on your property, you enter into the closing process. To begin, you set up the agreement with a purchase agreement. Here you list the agreed-upon price, a general guideline as to how the deal will go down, as well as anything that may cause either party to back out of the agreement throughout the rest of the process. Next, some states require a disclosure form where the current owner tells the buyer any known hazards or faults with the land. This is how the state makes sure the buyer knows everything they are getting into and can hold the original property owner accountable for anything knowingly withheld. If everything is going smoothly at this point, both parties sign a contract finalizing the price and anything else to do with the sale. After the contract is signed, a deed transfers the title to the new owner. Finally, the deal can be finished with a closing statement that goes over anything else left on the table. This could be property taxes, mortgage insurance, and anything other fee associated with the transaction.
- Purchase Agreement
- Disclosure Forms
- Closing Statement
These are required for a standard land transaction. Still, depending on the financing situation, bank, seller, or cash, this list can change some. There is more paperwork required when borrowing money. If you are willing to finance the new buyer yourself, you will want documentation protecting you from any payment faults. Find all the paperwork on this list, and you will have a good start to selling your property. We also recommend doing some research for any specific local legal requirements. And again, hiring a real estate agent who can make the process as headache-free as possible i