Offer, Due Diligence & Closing

Important: This page is intended to help you understand the general real estate process, but it does not replace your Purchase and Sale Agreement or any other contract you sign. Every transaction is different, and the terms of your written agreement control. Always read your contracts carefully, ask questions about anything you don't understand, and pay close attention to all dates, deadlines, and obligations.

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Receiving an Offer

Receiving an offer is exciting, but the price is only one part of the decision. With land, the terms of the offer can be especially important because buyers may need time to investigate the property before they're ready to move forward without conditions.

I'll help you look at the entire offer, including the price, financing, earnest money, due diligence period, contingencies, requested closing date, seller concessions, and anything else the buyer has included.

Looking Beyond the Purchase Price

The highest offer isn't always the best offer. A buyer offering a little less with stronger terms may sometimes be in a better position than a higher-priced offer with a long list of contingencies or uncertainties.

I'll walk you through the offer, point out anything that deserves a closer look, and help you understand the strengths and potential drawbacks before you decide how you'd like to respond.

Buyer Financing

If the buyer is financing the purchase, I'll review the type of financing they're using and any lender documentation included with the offer. Land financing can be different from financing a home, and lenders may have their own appraisal, underwriting, acreage, access, or property requirements.

A pre-approval or lender letter is a good indication that the buyer has spoken with a lender and taken steps toward financing, but it isn't a guarantee that the loan will ultimately be approved.

Earnest Money

Earnest money is money the buyer deposits after the contract becomes binding to show their intention to move forward with the purchase. The amount, due date, and party holding the earnest money are included in the contract.

If the transaction closes, the buyer receives credit for the earnest money at closing. If the contract terminates, what happens to the earnest money depends on the terms of the agreement and the reason for termination.

Due Diligence & Contingencies

Due diligence gives the buyer time to take a closer look at the property and determine whether it works for what they intend to do with it. Land offers may also include specific contingencies for things such as soil or septic suitability, a survey, well testing, financing, or other property-specific concerns.

These provisions are important because they may give the buyer certain rights to terminate the contract or request changes if the requirements aren't satisfied. I'll review each contingency with you so you understand what the buyer is asking for, how long they have to complete it, and what it means for you as the seller.

Seller Concessions

A buyer may ask you to contribute toward closing costs or other expenses as part of the offer. Rather than looking at a concession by itself, I'll look at how it affects your estimated proceeds and the offer as a whole.

Sometimes a stronger purchase price with a concession may work better for you than a lower offer without one. What matters is the complete package.

Accepting, Rejecting or Countering an Offer

Once we've reviewed the offer, the decision is yours. You can accept it as written, reject it, or make a counteroffer.

A counteroffer allows you to propose changes to the price, closing date, concessions, due diligence period, contingencies, or other terms. Negotiations may go back and forth more than once before everyone reaches an agreement, or decides not to.

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Under Contract

Once you and the buyer have agreed to the terms and everyone has signed, you're under contract. The Purchase and Sale Agreement becomes our roadmap to closing, with responsibilities and deadlines for both sides.

This is usually when the buyer begins taking a much closer look at the land. I'll keep track of the dates that affect you and stay in communication with the buyer's agent as the buyer works through the investigations and contingencies in the contract.

Important Dates & Deadlines

Land contracts can contain several dates that matter. Depending on the agreement, these may include the earnest money deadline, due diligence period, soil or septic deadline, survey deadline, well contingency, financing or appraisal deadlines, and the closing date.

I'll keep track of the contract dates that affect you and let you know when something needs your attention. If the buyer requests an extension or another change to the agreement, we'll discuss it before you decide whether to agree.

Soil & Septic Contingencies

If the buyer plans to build a home that will use a septic system, soil suitability may be one of the most important things they investigate. Depending on the contract, the buyer may hire a soil professional or work through the appropriate local process to determine whether the property appears suitable for the septic system they need.

The buyer may also have specific requirements, such as approval for a certain number of bedrooms or a preferred area of the property. If the offer includes a soil or septic contingency, I'll review the requirements and deadlines with you so you understand exactly what the buyer is entitled to investigate.

Survey Contingencies

A buyer may choose to have the property surveyed, especially when acreage, property boundaries, access, easements, road frontage, or a planned building area are important to their decision.

If the contract includes a survey contingency, the agreement should spell out the buyer's rights and deadlines if the survey reveals something that affects their intended use of the property. If an issue comes up, I'll review the survey and the contract with you before you decide how you'd like to respond.

Well Inspection & Water Testing

If the property has a private well, the buyer may want to have it inspected and tested during the contract period. Depending on the offer, that may include checking the well and related equipment, testing the water for health or quality concerns, and measuring the well's flow rate.

A well contingency may also give the buyer certain rights if the results don't meet the requirements stated in the contract. I'll review those requirements and deadlines with you so you know what the buyer is testing and what happens if a concern comes up.

Access, Easements & Restrictions

During due diligence, buyers may spend time reviewing recorded access, easements, covenants, HOA restrictions, zoning, or other documents that affect how the land can be used.

If a question comes up, I'll help gather the information we have and work with the appropriate parties to get clarification where possible. Legal questions involving title, easements, or recorded documents may need to be answered by the closing attorney or another qualified professional.

The Appraisal

If the buyer is financing the purchase, their lender may order an appraisal. The appraiser provides an independent opinion of value for the lender and may consider comparable land sales along with the characteristics of the property itself.

Land appraisals can sometimes be challenging because there may not be many truly comparable sales. If the appraisal creates an issue, I'll review what happened and what options are available under the contract before you make any decisions.

The Buyer's Financing

While the buyer and lender handle most of the financing process, it still matters to you because the transaction may depend on the buyer receiving final loan approval.

There may be stretches when you don't hear much while underwriting, appraisal work, and other lender requirements are being completed. I'll stay in communication with the buyer's agent and keep you informed of meaningful developments that affect the transaction.

Requests During Due Diligence

Land doesn't usually generate the same kind of repair negotiations that come with selling a home, but buyers can still raise questions or ask for changes during due diligence.

A request might involve additional time, clarification of property information, an issue discovered through a survey or soil evaluation, or another concern related to the buyer's plans. If something comes up, I'll review the request with you in the context of the contract and the transaction before you decide how you'd like to respond.

The Closing Attorney

Once you're under contract, the closing attorney begins working behind the scenes. They'll perform the title search, prepare the necessary documents, coordinate with the parties and lender, and work toward having everything ready for closing.

With land, the title work may also involve reviewing the legal description, easements, access, restrictions, liens, or other recorded matters affecting the property. If the attorney needs information or documents from you, getting those items to them promptly can help prevent unnecessary delays.

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Preparing for Closing

Land sellers usually have fewer physical preparations before closing than someone selling a home, but there are still a few things worth taking care of before ownership changes.

Leave the Property as Agreed

If you've stored equipment, trailers, building materials, personal belongings, or anything else on the property that isn't included in the sale, make sure it's removed before closing unless we've agreed otherwise in writing.

If there are gates, locks, access devices, keys, or other items the buyer will need after closing, gather those ahead of time so we can make sure they reach the buyer.

Don't Make Last-Minute Changes

Once you're under contract, it's generally best not to make significant changes to the property without discussing them first. Clearing trees, grading, changing access, removing improvements, or doing other work could affect what the buyer agreed to purchase.

If something needs to be done before closing, let me know so we can make sure it doesn't create an unnecessary issue with the buyer or the contract.

Utilities, Gates & Services

If the property has active utilities, a well, gate service, HOA account, or another service associated with it, we'll determine what needs to remain in place through closing and what should be transferred or discontinued afterward.

Most vacant land won't require much here, but it's worth checking before closing rather than discovering afterward that something was overlooked.

Your Settlement Statement

Before closing, you'll receive a preliminary settlement statement showing the financial details of the sale. It will include the purchase price along with applicable credits, prorations, brokerage compensation, closing expenses, loan payoffs, and other charges or adjustments.

Take a few minutes to review it before closing. If something doesn't look right or you don't understand a charge, I'll help get the question answered before you sign.

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Closing

You've made it through the offer, due diligence, contingencies, buyer investigations, deadlines, and everything else that comes with selling land. Closing is where the transaction is finalized and ownership transfers to the buyer.

Your Closing Appointment

Closing is generally straightforward once everything has been prepared. The closing attorney will walk you through the documents you need to sign and answer questions about the closing paperwork.

If you can't attend in person, let me and the closing attorney know well in advance. Depending on the circumstances, the attorney may be able to arrange another way for you to sign.

Closing Documents

As the seller, your closing documents are different from the buyer's. The closing attorney will explain the documents you're signing, including those needed to transfer ownership and complete the transaction.

You don't need to memorize everything beforehand. If you don't understand something, ask. That's exactly what the closing attorney is there for.

Your Sale Proceeds

Your settlement statement will show how the proceeds from the sale are calculated after mortgages or other liens, closing expenses, prorations, brokerage compensation, and other agreed-upon amounts are deducted.

The closing attorney will provide instructions regarding how your proceeds will be delivered.

One very important warning: Wire fraud is real. Never rely on an email, text, or phone call telling you that wiring instructions have changed. If anything seems unusual, stop and contact the closing attorney directly using contact information you already know is legitimate.

Access & Possession

If there are gate remotes, keys, access codes, or other items that belong with the property, I'll make sure we have a plan for getting them to the buyer.

Exactly when the buyer takes possession depends on the terms of the contract. In most land transactions, possession transfers at closing unless the agreement says otherwise.

Once the transaction has closed and possession has transferred, you've officially sold your land.