LEGALDOCS - Purchase Agreement - Unimproved Property
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This Agreement is a very comprehensive, detailed purchase agreement used for the purchase and sale of unimproved real property. This Agreement constitutes the agreement for purchase and sale, and also acts as escrow instructions to escrow holder. This agreement is derived from a form used by major law firms and generally used for transactions involving properties worth several and more million dollars. Lawfirms will typically charge thousands of dollars for an agreement of this type and complexity.
This Agreement is meant for persons knowledgable in the real estate area, and pre-supposes basic knowledge of real estate transactions, specifically commercial real property purchase and sale transactions.
To create a Purchase Agreement - Unimproved Property, complete this form.
The Parties to the Agreement
The name of the Seller of the property is
The Seller is:
The name of the Buyer of the property is
The Buyer is:
The Property being transferred
The land that is being sold is located in:
- the city of ;
- the county of ;
- the state of .
Does the Property have a street address?
Yes, and the full address (street, city, state) is .
Does the Property have a legal description that will be attached to the Agreement as an exhibit? (if a legal description exists, it is good practice to attach it to the agreement to ensure that the property is exactly described).
Escrow, Title, Dates
The date the contract is signed by both parties is called the "Effective Date".
This contract will specify a "Contingency Date" (also known as "Due Diligence Ending Date"), which is a date where the Buyer will have to complete its "due diligence" investigation of the Property. Therefore, prior to the Contingency Date, the Buyer will basically have a "free look" at the Property without jeopardizing the Deposit. This is standard in most real estate transactions that deal with high value properties. This contract specifies standard due diligence matters that have to be approved by the Buyer, and these are matters (i) concerning title, (ii) environmental matters, and (iii) a catch-all for everything else, i.e., suitability for development, marketability, etc. Prior to the Contingency Date, the Deposit will be fully refundable. Following the Contingency Date, if Buyer has approved and/or waived the matters Buyer discovers in its due diligence investigation, the Deposit will be non-refundable (in industry parlance, the "Deposit goes hard"). To provide flexibility, this contract allows a Contingency Date to be computed either from the "Effective Date", or from another event, to be specified by you. Pick the choices that fit your transaction.
The name of the Escrow Agent is . (State the full name; i.e., "Nationwide Title Insurance Company".)
The name of the Title Company is . (This may be, but does not have to be, the same as the escrow agent. State the full name; i.e., "Nationwide Title Insurance Company".)
The date for the Close of Escrow can be picked as a date certain, or as a date dependent on another date or event. Complete the following depending upon your needs.
Preliminary Title Report. Normally, the Seller at its expense provides a preliminary report to the Buyer for Buyer's due diligence review. Sometimes this burden is placed on the Buyer. Choose the following depending upon your agreement. The Preliminary Report will be provided by:
Purchase Price, Deposit and Contingency Removal Method
The purchase price of the Property is:
(Write the entire purchase price; i.e., Three Million, Two Hundred Fifty Six Thousand, Seven Hundred and Fifty".)
Enter this same Purchase Price in numerical format: $. (I.e., "3,256,750")
The initial Earnest Money Deposit, in numerical format, is $.
The waiver of the Buyer's contingency matters can be either passive or active. Passive means that unless the Buyer gives written notice of disapproval, the contingencies are deemed waived, and on the Contingency Date the Deposit goes hard. Active means that the Buyer has to give written notice of waiver of the contingency matters, and if no written notice is given by the Contingency Date, the contingencies are deemed disapproved, the Escrow gets terminated and the Deposit returned to the Buyer.
Waiver of Contingencies will be by the "Passive" method.
Waiver of Contingencies will be by the "Active" method.
For Buyer to perform its due diligence investigation of the Property, Buyer will need copies of documents that pertain to the Property. Sometimes these documents have already been provided to Buyer when the Purchase Agreement is signed: if not, then the parties normally give Seller a certain number of days in which to provide these documents. Complete the following:
Physical Inspection of the Property
In almost all instances, Buyers are allowed to conduct a physical inspection of the Property (for soils conditions, environmental, physical characteristics, etc.). Most purchase agreements provide some guidelines regarding whether notice of Buyer's entry onto the Property has to be given to the Seller, and whether Buyer has to provide insurance coverage to guard against a claim resulting from Buyer's entry onto the Property (for example, if Buyer is driving a vehicle on the Property, and a member of the public is injured by Buyer's vehicle). Complete the following accordingly:
Reps and Warranties
Representations and warranties given by Seller to Buyer are always some of the most contentious issues in negotiating a purchase and sale contract. Obviously, the Seller prefers to give as few reps and warranties as possible, and the Buyer wants the Seller to give very broad reps and warranties, so that if there is a problem with the Property, or Seller's review documents contain inaccuracies that Buyer was not aware of and causes Buyer to incurr a loss or unanticipated mitigation expense, Buyer can seek recourse against the Seller for that loss.
Normally, if a Seller has owned a property for a long time, and/or has actually used that property, the Buyer can more easily demand greater reps and warranties. Conversely, if the Seller is "flipping" the property and has not owned the property for any period of time, the Seller will be uncomfortable and unwilling to give many or even any reps, and will try to place the burden on the Buyer to undertake careful inspection of the property, and to place all risk of Buyer's due diligence inspection onto the Buyer. Sometimes the Seller will not even guarantee that the Seller's own property disclosure documents are free of material defect or omission. Most often, however, the Seller and Buyer will come to some agreement in the middle, and the Seller will give most, if not all, the representations desired (especially if the Seller is extremely familiar with the property, and knows that its reps are true and correct).
These are the actual Reps and Warranties as they are worded in the agreement. As you are completing this part of the Questionnaire, open this page in a new browser window so you can review the actual wording of the representations as they will appear in the purchase agreement.
Set forth which of the following reps and warranties Seller will be required to make. "Yes" will insert the full reps wording shown on the reps and warranties page. Click "No" if Seller will not include that specific rep into the Purchase Agreement.
- No Hazardous Materials. That the Property is free of hazardous materials, and that no hazmat actions have been brought against the Property.
- Condition of Soils. That except as set forth in any soils report provided by Seller to Buyer as part of the Property Documents, no soils conditions exist which would make the construction of the Improvements unduly problematic.
- Agreements affecting the Property. Except as reflected in the Property Documents actually delivered to Buyer, there exist no committments or agreements with any agencies, public utilities, adjacent or other that affect the Property.
- No Defaults. Seller is not in default of any obligations that pertain to the Property.
- Condition of Property. Seller has no actual knowledge of any material conditions relating to the Property that are not reflected in the Property Documents delivered to Buyer.
- Actions or Violations. Seller has received no notice of any court or governmental agency actions, proceedings or investigations, etc. pending or threatened against the Property.
- Condemnation. Seller has received no notice of any pending or threatened condemnation proceedings.
- Environmental Restrictions. Seller has no knowledge of any environmental conditions, including but not limited to presence of any endangered species, vegetation or wetlands areas, that would make any portion of the Property subject to development restrictions.
- Liens and Claims of Possession. Buyer will take the Property free from all claims, including any claims for rights of possession, any easements and/or rights of way for private or public uses, other than as shown in the Review Documents and/or title policy.
- Contracts. As of the Close of Escrow, there will be in place no contracts that will be an obligation affecting the Property subsequent to the Closing, except for contracts entered into in the ordinary course of business that are not chargeable against Buyer, and are terminable without cause on thirty (30) days' notice without penalty or cancellation fee.
- Information Provided by Seller. All Property Documents and other documents and information delivered to or inspected by Buyer are originals or true copies, and Seller is aware of no material inaccuracy in or material misrepresentation set forth in those documents or information.
Next, describe the brokerage relationships, if any, that either one or both of the parties has employed.
Is Seller represented by a broker?
Is Buyer represented by a broker?
Yes, Buyer has employed the services of (Enter the full name of the brokerage company), who will be paid a brokerage commission as follows:
Notices, Place of SigningNotices:
Notices to all parties will be addressed as follows (NOTE: if you leave the field empty, a line will be inserted in the final document so you can enter the information at a later time.):
This Agreement will be signed in the City of , State of .
This completes the information input for your Purchase Agreement - Unimproved Property. When you Send this Form, this program will prepare a Summary of the Purchase Agreement - Unimproved Property for your review. Make sure that all facts stated in the Summary are correct in all respects.
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