To write a land sale agreement, put every term of the transfer in a signed writing: the full legal names of buyer and seller, the legal description of the parcel, the purchase price and how it will be paid, the contingencies that must be satisfied before closing, how title and risk pass, what happens if either side defaults, and the closing date. Land deals carry issues a house purchase rarely raises — zoning, septic feasibility, mineral and water rights, environmental history — and the agreement is where you handle them.
One threshold point. Under the statute of frauds, every state requires that any contract transferring an interest in real property be in writing and signed by the parties. An oral promise to sell land is unenforceable no matter how specific the terms or how many witnesses heard it. The writing does not need to be long or technical, but it must at minimum identify the parties, describe the property, and state the price. Without those three, a court will treat the deal as if it never happened.
Name the Parties Correctly
Use the full legal name of every buyer and every seller. If a married couple owns the land, both spouses should appear as sellers. If an LLC, trust, or corporation sits on either side, name the entity and the person authorized to sign for it. Getting this wrong creates title problems that surface months or years later. Include a current mailing address for each party; notices and correspondence required under the contract have to go somewhere.
Write a Full Legal Description of the Property
A street address is not enough. The agreement needs the legal description of the land as it appears in the county’s property records. Subdivided lots use a lot-and-block description that references a recorded plat map, something like “Lot 14, Block 3, Oakview Estates.” Rural and undeveloped land more commonly uses a metes and bounds description, which traces the boundary from a fixed starting point through compass bearings and distances back to the start. Copy the description exactly from the deed or title commitment. Even a small transcription error can cloud title.
When to Order a Survey
If the land has never been surveyed, or the last survey is decades old, order a new one before signing. A survey pins down the actual boundaries, reveals encroachments, and confirms the acreage. Where a lender or title insurer is involved, the ALTA/NSPS Land Title Survey is the recognized standard.1National Society of Professional Surveyors. 2026 ALTA/NSPS Standards A survey contingency gives the buyer a window to walk away if the results do not match what was represented.
Set the Price and Payment Terms
State the total purchase price in both words and numbers to prevent disputes over typos. Then spell out how that price gets paid.
- Earnest money deposit. A good-faith deposit made shortly after signing, typically 1% to 3% of the purchase price. It should be held by a neutral escrow agent, not the seller, until closing or until the contract falls apart. Name the escrow holder and state exactly when the deposit is due.
- Financing terms. If the buyer is borrowing, specify the loan type, maximum interest rate, and the deadline for a commitment letter. Seller-financed deals need their own payment schedule, interest rate, and default terms written in.
- Closing cost allocation. State who pays for the title search, title insurance, recording fees, transfer taxes, and any survey costs. These vary widely by location, so settle them in the agreement rather than at the closing table.
Who Holds the Money
The escrow agent is a neutral third party, usually a title company or real estate attorney, who holds the earnest money and key documents until both sides satisfy their obligations. The agent owes a fiduciary duty to both buyer and seller and cannot release funds prematurely. If the buyer backs out for a reason covered by a contingency, the deposit goes back to the buyer. If the buyer walks away without a valid contingency, the deposit goes to the seller, assuming the agreement contains a liquidated damages clause.
Property Tax Prorations
Property taxes do not pause for a closing. The agreement should state how the current year’s taxes are split, charging the seller for days of ownership through the day before closing and the buyer from closing day forward. When closing happens before the final tax bill is issued, title companies typically estimate from the prior year’s bill and include a reproration clause requiring both sides to true up once the actual amount arrives.
Build In Contingencies That Fit Raw Land
Contingencies are conditions that must be satisfied before closing. If one is not met by its deadline, the buyer can usually walk away and recover the earnest money. Each contingency needs its own realistic deadline; a percolation test may need to be scheduled weeks ahead with the county health department, and a Phase I assessment takes time to complete.
Standard Contingencies
- Financing. The sale is conditioned on the buyer obtaining a loan commitment by a specified date. If the lender declines, the deal ends.
- Title. The buyer receives a clean title report showing no unexpected liens, encumbrances, or ownership disputes. If title defects surface, the seller gets a set period to cure them.
- Appraisal. If a lender is involved, the property must appraise at or above the purchase price. Vacant land appraisals are notoriously tricky because comparable sales are scarce, so build extra time into this deadline.
- Inspection. For land, this is the umbrella under which the buyer runs the specialized tests below.
Land-Specific Contingencies
- Zoning verification. Confirm that the current zoning classification allows your intended use. A zoning verification letter from the local planning department states the official designation and permitted uses. Overlays, historic district designations, and special-use provisions can impose restrictions the base zoning does not reveal. If your plans do not fit, you may need a variance or rezoning, with no guarantee of success.
- Percolation test. If the land is not connected to municipal sewer, you will need a septic system, and that requires soil that drains at the right speed. Many counties deny building permits outright if the soil fails. Alternative septic systems may be possible but can cost several times more than conventional ones.
- Environmental assessment. A Phase I Environmental Site Assessment reviews historical records, aerial photos, and site conditions to identify contamination risks. It is also what preserves your defense against federal cleanup liability, discussed below.
- Survey. A boundary survey confirms that the property matches what you think you are buying.
Address Rights That May Not Travel With the Surface
Buying land is not the same as buying everything above and below it. Three categories of rights can exist separately from surface ownership, and the agreement needs to address all of them.
Mineral Rights
In many parts of the country, previous owners have already severed the mineral rights (oil, gas, coal, gravel) from the surface estate. When that has happened, buying the surface does not give you the minerals. The title search should reveal any prior reservations. If the seller still owns the minerals, the agreement should state whether they are included in the sale or reserved. A reservation clause should also address whether the mineral owner retains the right to enter the surface for extraction or waives it. Skipping this is how buyers end up watching a drilling rig show up on land they thought was entirely theirs.
Water Rights
Water rights are generally attached to the land where the water is used, but they can be separated and transferred independently. The agreement should confirm whether any water rights are appurtenant to the property and whether they are included. In western states where water is scarce and heavily regulated, water rights can be worth as much as the land itself. Require the seller to disclose all water rights and include or exclude them by explicit language.
Easements and Access
An easement gives someone else the right to use part of your land for a specific purpose: a utility company running power lines, a neighbor crossing to reach their property, a drainage channel maintained by the county. The title search should identify all recorded easements, and you should read each one before signing. A 20-foot utility easement through the middle of a lot can ruin building plans.
Access deserves special attention for rural parcels. If the land does not front a public road, you need a recorded access easement to get there legally. Landlocked property without a guaranteed right of access is worth a fraction of comparable connected parcels, and establishing access after the fact typically requires either neighbor cooperation or a lawsuit. Make legal access a non-negotiable term.
Require a Title Search and Owner’s Title Insurance
A title search examines public records to trace the chain of ownership and uncover anything that could affect your rights: outstanding mortgages, unpaid tax liens, judgments, easements, and competing ownership claims. For raw land that may have changed hands informally or been subdivided over generations, this is where surprises tend to appear.
Even after a clean search, hidden problems can surface later: forged documents in the chain of title, unknown heirs with a claim, or recording errors at the county level. Owner’s title insurance covers your financial loss if someone later asserts a valid claim against the property from before your purchase.2Consumer Financial Protection Bureau. What Is Owner’s Title Insurance? Lender’s title insurance, which most mortgage companies require, protects only the lender’s interest. An owner’s policy is a separate purchase.
Protect Against Environmental Liability
Under the federal Comprehensive Environmental Response, Compensation, and Liability Act, the current owner of contaminated property can be held liable for cleanup costs even if someone else caused the contamination decades earlier.3Office of the Law Revision Counsel. United States Code Title 42 – Section 9607 Liability is strict, meaning it does not matter whether you knew about the contamination or did anything wrong.
The main protection is the innocent landowner defense, which requires that you conducted “all appropriate inquiries” into the property’s environmental history before purchasing it.4Office of the Law Revision Counsel. United States Code Title 42 – Section 9601 In practice, that means commissioning a Phase I Environmental Site Assessment under the ASTM E1527-21 standard, the only standard currently recognized for CERCLA protection. The assessment reviews regulatory databases, historical aerial photographs, old maps, and city directories, and includes a physical site visit and interviews. It does not test soil or groundwater (that is Phase II), but it identifies red flags. Build in a contingency giving you time to complete this assessment and walk away if the results are concerning.
Get Written Seller Disclosures and Warranties
Most states require sellers to disclose known material defects. For land, relevant disclosures include previous uses (farming, dumping, industrial activity), drainage problems, boundary disputes, pending assessments, and known environmental conditions. Requirements vary by state, but a seller who knowingly hides a defect generally faces legal consequences even where no formal disclosure form is mandated.
The agreement should also include a representations and warranties section. Typical language covers the seller’s authority to sell, the absence of undisclosed encumbrances, no pending litigation, and no known environmental contamination. These representations survive closing, so the buyer can pursue a claim if they turn out to be false even after the deed is recorded.
Spell Out Default and Remedies for Each Side
This section answers a question nobody wants to think about at signing: what happens when one side does not follow through?
Buyer Default
If the buyer fails to close without a valid contingency, the most common remedy is forfeiture of the earnest money. Many agreements include a liquidated damages clause capping the seller’s recovery at the deposit amount. For that clause to hold up, the agreed amount has to be a reasonable estimate of the seller’s anticipated damages at the time of signing, not a windfall. Courts scrutinize clauses that look more like penalties than genuine damage estimates.
Seller Default
If the seller refuses to close, the buyer has two main options. The first is monetary damages: out-of-pocket costs and, in some cases, the difference between the contract price and market value. The second is specific performance, where a court orders the seller to complete the sale. Courts are more willing to grant specific performance for real estate than for almost any other contract, because every parcel of land is considered unique.
Spell out which remedies are available to each party and whether they are exclusive. A well-drafted default section also includes a notice requirement, giving the defaulting party a set number of days to cure before the other side can exercise remedies.
Include a Dispute Resolution Clause
Litigation over a land sale can easily cost more than the land itself, especially for smaller parcels. The agreement should specify how disagreements are handled. Mediation is a common first step. If mediation fails, the agreement can require binding arbitration, which is faster and less expensive than court but produces a decision that is difficult to appeal. Some agreements use a step approach: mediation first, then arbitration if mediation does not resolve the dispute within a set timeframe.
The clause should also specify who pays for the process. Many agreements include an attorney’s fees provision, where the losing party pays the winner’s legal costs. That provision alone discourages frivolous claims.
Fix the Closing Date, Possession, and Recording
Set a closing date, the day ownership officially transfers and the buyer pays the balance. Land transactions typically need 30 to 60 days to close, but complex deals with environmental reviews or zoning approvals may need longer. Include a provision allowing either party to extend the date in writing if contingencies take longer than expected.
Possession does not always align with closing. If the seller needs time to remove equipment or wrap up agricultural operations, the agreement should specify a separate possession date and address who bears risk of loss in the gap between closing and possession. Without that clarity, both sides will claim the other is responsible if something goes wrong during the transition.
After closing, the deed must be recorded at the county recorder’s office where the land is located. An unrecorded deed is still valid between the buyer and seller, but it will not protect the buyer against a later purchaser who buys the same land without knowledge of the first sale. State which party is responsible for recording and paying the recording fees.
Anticipate Tax Reporting at Closing
Land sales trigger federal reporting obligations that the agreement should acknowledge, even if it does not spell out every detail.
Form 1099-S
The closing agent or settlement officer is generally required to file IRS Form 1099-S reporting the proceeds from the sale.5Internal Revenue Service. About Form 1099-S, Proceeds From Real Estate Transactions Vacant land sales do not qualify for the principal residence exclusion that lets homeowners skip reporting on gains under $250,000 (or $500,000 for married couples filing jointly); that exclusion applies only to a residence under Section 121.6Internal Revenue Service. Instructions for Form 1099-S (04/2025) Transfers below $600 are exempt from reporting, but nearly every land sale exceeds that threshold.
FIRPTA Withholding
If the seller is a foreign person or entity, the buyer is required to withhold 15% of the amount realized on the sale under the Foreign Investment in Real Property Tax Act.7Internal Revenue Service. FIRPTA Withholding The withheld amount goes to the IRS, and the seller claims it against their U.S. tax liability. To avoid this withholding, a domestic seller provides a non-foreign affidavit, a signed statement under penalty of perjury that includes the seller’s name, U.S. taxpayer identification number, and home address.8Internal Revenue Service. Exceptions From FIRPTA Withholding Including a FIRPTA affidavit as an exhibit, or requiring the seller to deliver one at closing, is standard practice.
Have an Attorney Review Before Anyone Signs
Before anyone signs, have a real estate attorney review the agreement. Attorney review is where someone experienced with land transactions catches ambiguities, contingency deadlines that do not allow enough time, or local requirements the agreement does not address. It matters more for land than for a typical house purchase because there are more variables and fewer standardized forms.
All parties must sign and date the agreement for it to be enforceable. Depending on your jurisdiction, notarization or witnesses may be required, particularly for the deed that transfers title at closing. The agreement itself may not require notarization, but having signatures notarized adds a layer of authentication that can prevent disputes later. Once signed, distribute identical copies to every party and their attorneys, and store your original alongside the deed, survey, title insurance policy, and closing statement. You may need these years down the road for tax purposes, boundary disputes, or a future sale.