A land purchase agreement, also known as a land contract, is a document signed by the parties involved in the sale and purchase of a piece of land. The document records the details of the purchaser and seller, their contact information, and the terms of the deal between the parties. It is an important document that transfers the ownership of the property from one party to the other.
Last Updated: October 2026. This guide is reviewed and updated regularly to reflect current law. If you notice an error or outdated information, please contact us.
Land purchase agreements are legal documents through which the buyer and seller agree to complete the transaction according to the terms of the agreement. It is similar to a standard real estate sales contract and typically includes details regarding the purchase price, seller financing, and other conditions, disclosures, and contingencies of the deal.
The purpose of this document is to clearly state what the seller and purchaser can expect from each other. A purchase and sale agreement can be of different types depending upon the payment plan including a warranty deed, grant deed, bargain and sale deed, and quitclaim deed.
In practice, the document works like a checklist for the sale. Before the parties sign, it gives both sides one place to see the price, the deposit, the closing date and the condition of the land. After signing, it is the record they come back to if a question comes up about what was agreed.
A land purchase agreement usually records:
A land contract is used to finalize the deal between the buyer and seller. It may be used whenever a person wants to buy any type of land in the United States. The parties should thoroughly go through the entire document to make sure that there are no discrepancies.
Typical situations include:
A land purchase contract should be used after the parties have concluded the negotiations and are ready to enter into the deal. However, before agreeing to buy a piece of land, the buyer should be aware of the pros and cons of investing in undeveloped land.
Buying a piece of vacant land is a huge investment and requires thorough research. There are some pros and cons attached to buying undeveloped land.
The pros of buying an empty land include:
Buying an empty land is commonly cheaper than buying developed real estate. For instance, a fully developed residential property will probably be more expensive than a piece of undeveloped land which the purchaser might develop himself or herself. The property tax on vacant land is generally lower than the tax on developed property. Buying vacant land can serve as a long-term investment.
Vacant land is purchased by paying in cash. This allows the buyer to have full ownership of the land without having to worry about mortgage payment and interest rates.
Buying undeveloped land gives the purchaser the flexibility and freedom to build the type of property he or she wants. The purchaser may build an office space, family homes, a multifamily community, or any other property depending upon the size of the property and zoning rules in place. Moreover, it is easier to maintain undeveloped land than developed real property.
The cons of buying a piece of vacant land include:
Buying undeveloped land might be cheaper but it typically does not provide an immediate return on investment. The purchaser may also have to pay property tax and improvement costs. However, the purchaser can cover these expenses by selling the rights attached to the land, including gaming rights and mineral rights.
Although buying raw land gives the purchaser flexibility to build whatever he or she wants on the land, the possibilities may be limited due to the existing zoning laws and regulations. Zoning defines what the land can be used for. Zoning also determines how many lots can be developed by the purchaser. This would also affect the return on the buyer’s investment.
Even if the purchaser wants to get the zoning restrictions changed, he or she will have to go through official channels which can be time-consuming. Undeveloped land usually requires more approvals and permissions than a developed property.
When a purchaser buys raw land, it becomes his or her responsibility to arrange for utilities including plumbing, gas, and electricity. The purchaser must also decide if he or she will connect the land to municipal utilities. Arranging for utilities can substantially add to the money and time taken to complete the purchaser’s project.
There are several ways to finance a land purchase, depending on the financial position of the buyer and the seller. The three main options are bank financing, seller financing and paying without financing. Each one changes who provides the money and how the buyer repays it.
Bank financing or third-party financing is the most common way to finance a real estate deal. In this method, the third party may be a bank, credit union, commercial lender, or any other financial institution, and it provides a loan to the purchaser. These institutions will check the purchaser’s credit rating, building plans, and financial situation before providing financing. There are several loan options available to the purchaser including lender land loans and home equity loans.
In some cases, the seller may provide financing, also known as owner financing, to the purchaser if he or she is unable to obtain financing from other sources. However, seller financing often comes with higher interest rates, a hefty down payment, and a shorter repayment term as the seller may not have an elaborate lending portfolio. This can put more financial burden on the purchaser.
In case the purchaser already has sufficient funds there is no need to obtain financing from an external source. For instance, if the purchaser is willing to pay up entirely in cash, there would be no need for external financing.
Buying land can be a complicated process depending upon the type, size, and location of the land. In many cases, buyers look for legal advice from real estate brokers or attorneys before buying a piece of land. Typical steps involved in the process of buying land are listed below.
The first step is to find a piece of land that the buyer wants to purchase. The purchaser should first analyze all the pros and cons of buying the land. This includes checking for utilities including water, electricity, and septic systems. Another thing to consider is road access and easements on the land and nearby properties.
If the purchaser has to cross someone else’s land to get to his or her land, the purchaser must legally record the easement. Real estate brokers can help the purchaser in taking care of the finer details while finalizing the land.
Once the land has been finalized, the next step is to make an offer to the seller. Once an offer is made, it is up to the seller to accept or reject it. This marks the beginning of the negotiation between the parties. This process includes negotiations regarding the purchase price, earnest money, financing details, and timeline.
After the parties have agreed upon the purchase price and other details of the deal, the next step is to prepare a purchase agreement or land contract. The land contract will record all the details regarding the deal. The parties may exchange several drafts of the purchase contract before finalizing a version that satisfies their needs.
One of the most important steps of any purchase agreement is the due diligence process. It is the investigation that a person must carry out before entering into an agreement with another party. It becomes especially necessary in real estate deals.
The purchaser must conduct a title search to determine if the seller has the title to the property and if there are any claims on the property by researching public records. Another step would be to inspect the property with the help of qualified professionals.
It is important to check the zoning and land use regulations with the city, county, or state authorities to make sure that the purchaser is allowed to do what he or she wants to do with the land. For instance, some counties may not allow the purchaser to build anything on land smaller than one acre.
The purchaser should also enquire about the property tax applicable on the land. In most cases, property tax on vacant land is cheaper but it may vary depending upon the land’s location.
Once the due diligence has been completed and the land contract is ready, the final step is to sign the document and move towards closing the deal. The closing time may depend upon the payment structure of the deal.
After the parties have signed the document and closed the deal, the transfer of ownership may be recorded through a deed filed with the Registry of Deeds. The property may be under the seller’s possession till the closing date, but he or she must deliver the property to the purchaser on that date.
The main components of a land purchase contract are listed below. Each part covers one piece of the deal, from the names of the parties to the signatures at the end. The template on this page follows the same order.
This would include the names and addresses of the land buyer and land seller. This part usually comes at the beginning of the document.
This includes the name and contact details of the escrow agent including his or her full address. An escrow agent is a person who oversees the negotiation and administration of a real estate transaction and charges an escrow fee for the services. The escrow fee to be paid to the escrow agent shall be shared equally by the parties.
This section describes the property that is being purchased including the size, location, and property condition.
This section includes the total price that is to be paid by the land buyer to the land seller. It also includes the details of the earnest money to be deposited by the buyer with the seller or escrow agent. Earnest money is the money deposited by the buyer to show his or her seriousness in buying the land.
If the purchase is completed, this amount is credited to the purchase price. This amount becomes non-refundable after the feasibility expiration date or the closing date, as the case may be. The parties have the option to not deposit any earnest money at all.
Seller carry-back financing happens when the land seller becomes the lender and helps the buyer in financing the deal. In this case, the buyer may deliver a promissory note of a mutually agreed-upon sum to the seller at the time of closing. This may or may not be a mandatory part of the document depending upon the mode of payment and kind of financing.
This part includes the contingencies that the parties may want to include in the deal. The completion of the deal would depend upon the completion of these contingencies. For instance, the buyer might want to include a general feasibility contingency clause that allows the buyer and his or her consultants to conduct various environmental and zoning studies on the land.
This is the date on or by which the title and ownership of the property are transferred to the purchaser by the seller. The purchaser is often required to pay the full purchase price prior to the closing. Similarly, the land seller is obligated to hand over the property to the buyer on or prior to the closing date. There might also be some closing costs including recording fees associated with the transaction which may be shared by the parties.
Other details that might be specified in the agreement include liquidated damages, governing law, and the remedies available to the parties in case of a breach of the agreement. The seller may also make some representations and warranties to the buyer in the contract. If these representations and warranties turn out to be false, the buyer may take legal action.
Specific details regarding the property or the seller’s representations and warranties may be included in the exhibits attached to the document. These exhibits attached to the document also form a part of the agreement and the parties are legally bound by the same.
Once all the details of the entire agreement are finalized, and the parties agree to the terms of this agreement, they must sign the document, making it legally binding upon them.
These steps follow the FormsPal Land Purchase Agreement template that this page hands out, in the order of the form. Each step names the part of the form it covers and tells you what to enter there. The screenshots show sample entries, so you can see where each answer goes.
The screenshots under each step show the FormsPal Land Purchase Agreement template filled with sample entries in blue, so you can see where each answer goes. The names, addresses, dates and amounts are examples only.
Buyer and Seller in the opening paragraph. In the opening paragraph on page 1, enter the name and mailing address of the buyer in the blanks before “Buyer”. Then enter the name and mailing address of the seller in the blanks before “Seller”.
Escrow agent, feasibility expiration date and net acres. In Section 1 on page 1, enter the escrow agent’s name and address in 1(e). Enter the feasibility expiration date in 1(f) if one applies. Enter the size of the land, in acres, in 1(h). The legal description of the property can be mentioned in Exhibit A attached to the document.
Purchase price. In Section 3 on page 2, write the agreed purchase price in words and in figures in the blank spaces at the start of the section.
Earnest money deposit. If the buyer pays a deposit, tick the box on the left of the first paragraph of Section 3(a). Enter the deposit amount in the blank space of that paragraph. This money must be deposited within 3 business days after the execution of the document.
No earnest money deposit. If there is no deposit, tick the box on the left of the second paragraph of Section 3(a) and leave the deposit blanks empty.
Seller carry-back financing. Section 3(c) has two options. If the seller will carry back part of the price, tick the first box and enter the amount covered by the promissory note. If not, tick the second box.
Buyer’s contingencies. On page 3, Section 4 has two options. Tick the box on the left of the first paragraph if the agreement has no buyer contingencies. Tick the box on the left of the second paragraph if it includes them.
Zoning contingency deadline. The zoning deadline is the date by which the buyer must obtain the required zoning and land use permits. On page 4, enter the zoning deadline in the blank space under the second paragraph of Section 4(c) and tick the box on the left. If the zoning date is the same as the feasibility expiration date, tick the box on the left of the first paragraph instead.
Seller’s representations and warranties. Section 9 on page 7 has two options. Tick the box on the left of the first paragraph if the seller makes no representations and warranties. Tick the box on the left of the second paragraph if the seller’s representations and warranties in Exhibit B apply.
Seller’s contact information. Section 10 on page 7 sets out where each side can be reached. Start with the block under “If to Seller”. Mention to who the notice must be addressed to in the space in front of “Attn”, mention the contact number in the space in front of “Telephone No.”, mention the fax number in the space in front of “Fax No.”, and mention the email address in the space in front of “Email”.
Buyer’s contact information. Repeat the same four entries in the block under “If to Buyer”: Attn, Telephone No., Fax No. and Email, using the buyer’s information.
Broker. Next, mention the name of the broker to whom the seller will pay commission under a separate agreement. The broker’s name must be mentioned in the blank space provided under Section 20 of the agreement.
Signatures for the buyer and the seller. The parties should sign the document once all the other details have been finalized. The buyer must sign the document in the blank space provided under “Buyer”, and the seller must sign the document in the blank space provided under “Seller”. Under each name, also fill in the By, Name and Its lines on page 11. Keep a signed copy for each party.
Exhibit B: seller’s organization and state. Mention the details of the seller as required under Exhibit B on page 13 of the document if the seller’s representation and warranties are applicable under Section 9 of the document. In paragraph (a), enter the seller’s type of organization, such as a corporation or an LLC, then its state. The seller can strike out any of the warranties or representations that do not apply to the deal.
A land purchase agreement and a real estate purchase agreement both record the sale of property, but each is built for a different situation. The land version is written for a parcel with no home on it, so it puts its attention on the size of the parcel, access, zoning and the checks a buyer may want to make before closing. A real estate purchase agreement is usually written around a home or another building.
Most mistakes on a land purchase agreement come from small gaps, such as a blank left open or two boxes ticked in the same pair. A quick review before anyone signs catches almost all of them. Use the list below as a final check once the form is filled out.
Read the finished land purchase agreement once from start to end, and compare it with the screenshots above if anything looks unclear.
These are the questions people ask most often while they fill out the land purchase agreement template. Each answer points back to the part of the form it concerns, so you can find the right blank quickly.
Have this information ready before you start:
With these at hand, you can finish the land purchase agreement in one sitting.
Yes. Use the Create My Document button at the top of this page to answer a few questions and build your land purchase agreement online. You can also download the PDF or Word file and fill in the PDF with the FormsPal PDF editor, then print it.
Enter the size of the land in acres in Section 1(h) on page 1. The full description of the land goes on Exhibit A, a separate page near the back of the form, so keep any survey or deed at hand.
Section 3(a) has one box for a deposit and one for no deposit. Section 3(c) has one box for seller carry-back financing and one for no seller financing. Tick the box that matches your deal in each section, and fill in an amount only next to the box you tick.
Exhibit B on page 13 applies when you tick the second option in Section 9, which covers the seller’s representations and warranties. In paragraph (a), enter the seller’s type of organization and state. If you ticked the first option in Section 9, leave Exhibit B blank.
Yes. It is a good idea for the buyer and the seller each to keep a signed copy, along with the exhibits and any related document such as the promissory note.
General information, not legal or tax advice.
