To write a purchase agreement for land, put every term of the deal into a single signed document: the full legal names of buyer and seller, the property’s legal description (not just a street address), the purchase price and how it will be paid, the earnest money deposit and who holds it, the contingencies that let the buyer walk away, the type of deed the seller will deliver, how closing costs are split, and what happens if either side defaults. Land transactions carry risks a house sale does not, so the agreement has to address zoning, access, environmental conditions, and mineral rights on top of the usual terms.
Get It in Writing First
Every state requires contracts for the sale of real property to be in writing and signed by the parties. Under the Statute of Frauds, a verbal agreement to buy land is unenforceable no matter how clear the terms were. The writing must identify the parties, describe the property, and state the purchase price. Don’t transfer earnest money, order inspections, or take any other step toward closing until a signed agreement is in hand.
Information to Gather Before You Draft
Parties and Legal Description
Start with the full legal names of every buyer and seller. If a trust, LLC, or corporation is on either side, use the entity’s legal name and identify the person authorized to sign for it. Sloppy identification here creates title problems later.
Identify the property by its legal description, not just its street address. A legal description sets the exact boundaries using metes and bounds (directions and distances from a fixed starting point), lot and block numbers from a recorded subdivision plat, or the rectangular survey system used across much of the western United States.1Bureau of Land Management. Specifications for Descriptions of Land You’ll find it on the existing deed or a recent survey. If neither exists, hire a licensed surveyor to create one. Using only a street address invites a boundary dispute.
Zoning and Permitted Uses
Undeveloped parcels come with zoning restrictions that dictate what you can actually build. Agricultural zoning may bar a commercial structure. Residential zoning may limit density or prohibit business activity. Before drafting, contact the local planning or zoning office, confirm the parcel’s classification, and verify that your intended use is permitted.
If current zoning doesn’t allow your plans, a variance or rezoning may be possible, but the process involves public hearings and neighbor notification with no guarantee of approval. Make the sale contingent on securing the change so you can walk away if it falls through.
Access to the Property
Land that looks good on a map is functionally worthless without legal access to a public road. A landlocked parcel surrounded by private property needs an easement across a neighbor’s land. Owning landlocked property does not automatically give you the right to cross someone else’s. You need a recorded easement, either negotiated or ordered by a court.
Confirm deeded access before drafting. If the parcel relies on an existing easement, pull a copy and read its terms: some restrict use to foot traffic or exclude commercial vehicles, and some have expiration dates. If no access exists, make the sale contingent on securing one.
Environmental Conditions
Under federal Superfund law, the current owner of contaminated property can be liable for cleanup costs regardless of who caused the contamination.2Office of the Law Revision Counsel. 42 USC 9607 – Liability The only reliable shield is the innocent landowner defense, which requires the buyer to have conducted “all appropriate inquiries” into the property’s environmental history before closing.3U.S. Environmental Protection Agency. Superfund Landowner Liability Protections A Phase I Environmental Site Assessment is the standard way to satisfy that requirement for raw land, and it belongs in the agreement as a contingency.
Many buyers of undeveloped land skip environmental review, assuming it’s an industrial-site concern. Former agricultural land can carry pesticide residue, and a wooded parcel can sit next to a property with a leaking underground tank. Federal law also requires a permit before filling, clearing, or draining wetlands, so a wetland delineation study is worth running if any portion of the parcel looks like it might qualify.
Mineral and Subsurface Rights
Buying the surface of a parcel does not necessarily mean you’re buying what’s underneath it. Mineral rights covering oil, gas, coal, and other subsurface resources can be severed from surface rights and sold separately. In many parts of the country they were split off decades ago, and the current surface owner may have no subsurface rights at all. A buyer who skips this check could find a drilling company legally operating on the land.
Run a title search specifically for mineral rights before drafting. If they’ve been severed, state in the agreement that the sale covers surface rights only, or negotiate to include whatever subsurface rights the seller still holds. If the seller owns the minerals but intends to keep them, spell that out.
Utilities and Soil
Undeveloped parcels often lack connections to water, sewer, electricity, or gas. Extending utility lines to a remote site can be expensive, so get estimates from local providers before you commit to terms.
If there’s no municipal sewer, you’ll need a private septic system. A percolation test measures how fast soil absorbs water and determines whether the site can support a drain field. Too much clay, too much sand, or a high water table can fail the test and force a more expensive engineered alternative. Make the sale contingent on a satisfactory perc test, or run one before you close.
Core Clauses the Agreement Needs
Parties and Legal Description
The opening clause names every buyer and seller in full and includes the complete legal description. Attach a copy of the survey or plat map as an exhibit when one is available. If the parcel is being carved out of a larger tract, reference the new survey rather than the parent description.
Purchase Price and Payment
State the total price and exactly how it will be paid. For a cash deal, specify the amount due at closing and any deposit already applied. For a financed purchase, identify the type of loan (conventional, USDA, or other), the maximum interest rate and term the buyer will accept, and the deadline for securing a commitment letter. “Buyer will obtain financing” without specifics gives neither party a clear standard for whether the financing contingency has been met.
Earnest Money
Earnest money signals the buyer’s commitment. For land deals the deposit usually runs between 1% and 3% of the purchase price, though it can be negotiated higher. State the exact amount, when it’s due, who holds it (typically a title company or attorney acting as escrow agent), and the conditions for its return.
The escrow agent owes duties to both sides. They hold funds in a separate account, apply the deposit to the buyer’s costs at closing if the deal goes through, and return it to the buyer if the sale fails for a reason covered by a contingency. If the buyer backs out for a reason the contract doesn’t cover, the deposit normally goes to the seller as liquidated damages. Writing this out heads off the fight that otherwise erupts when a deal collapses.
Contingencies
Contingencies are the conditions that must be satisfied before either side has to close, and they are what protect the buyer from being locked into an unworkable deal. Each one needs a deadline; open-ended contingencies give one party an indefinite option to walk, and the other party will push back. Common contingencies in a land purchase:
- Financing. The buyer has a set number of days to secure a loan commitment and can cancel if the loan falls through.
- Survey review. The buyer obtains or reviews a current survey and has a deadline to object to boundary issues or encroachments.
- Title review. The buyer reviews the title commitment and can object to liens, easements, or other defects within a specified period.
- Environmental assessment. The buyer may conduct a Phase I assessment and cancel if contamination concerns surface.
- Zoning verification. The sale is contingent on confirming the parcel’s zoning permits the intended use.
- Percolation test. If the parcel needs a septic system, the sale depends on the soil passing.
- Access confirmation. The buyer verifies legal access to a public road exists or can be obtained.
Title, Insurance, and the Deed
The title clause requires the seller to deliver marketable title, free of liens, encumbrances, and claims the buyer hasn’t agreed to accept. Specify who pays for the title search and title insurance. Owner’s title insurance protects the buyer against defects the search missed, including forged documents, recording errors, unknown heirs, and boundary disputes. Lender’s title insurance, which the lender will require if the purchase is financed, covers only the lender.
State the type of deed the seller will deliver. A general warranty deed offers the strongest protection: the seller guarantees clear title and accepts responsibility for defects that arose even before the seller owned the property. A special warranty deed covers only the seller’s own period of ownership. A quitclaim deed makes no guarantees and simply transfers whatever interest the seller may have. For a land purchase, push for a general warranty deed.
Default and Remedies
The default clause spells out what happens if either side fails to perform. Without it, you fall back on whatever remedies state law provides, which may not match what either party expected.
If the seller refuses to close, typical buyer remedies include recovering the earnest money, suing for damages, or seeking specific performance, which is a court order forcing the seller to complete the sale. Courts grant specific performance when money damages would be inadequate, and it comes up often in real property disputes because every parcel is considered legally unique.4Legal Information Institute. Specific Performance If the buyer defaults, the seller usually keeps the earnest money as liquidated damages or, in some agreements, can pursue actual damages instead.
Build in notice requirements and a cure period. A well-written default clause gives the breaching party written notice and a set number of days to fix the problem before the other side can exercise remedies.
Closing Costs and Prorations
Allocate every closing expense. For a land deal the typical costs include the title search, title insurance premiums, survey fees, recording fees, deed preparation, escrow fees, and transfer taxes. A financed purchase adds lender charges like origination fees and the appraisal. Total closing costs for the buyer generally run around 2% to 4% of the loan amount, depending on the property and jurisdiction.
Prorate property taxes as of the closing date so the seller covers their portion of the year and the buyer picks up the rest. If the land sits in a district with special assessments for roads, drainage, or utilities, assign responsibility for those too.
If the Seller Is Financing
Raw land is harder to finance through traditional lenders than a house, so many deals involve seller financing. The seller acts as the lender while the buyer makes installment payments. This arrangement, often called a contract for deed or land contract, works differently from a conventional sale.
Under a typical installment contract, the buyer takes possession and makes monthly payments, but the seller keeps legal title until the balance is paid in full. Only then does the seller deliver a deed. Many installment contracts include forfeiture clauses allowing the seller to reclaim the property and keep every payment made if the buyer misses one or otherwise breaches, so the risk sits heavily on the buyer.
If you’re using this structure, the agreement needs to cover the interest rate, payment schedule, whether a balloon payment is due at the end, prepayment rights, and whether the buyer can assign the contract. The buyer should also record the contract, or a memorandum of it, with the county recorder. Without recording, the seller could sell the same parcel to a second buyer who has no knowledge of the first deal.
Drafting, Signing, and Recording
Work through the agreement methodically: parties, legal description, financial terms, contingencies, title and deed, default remedies, closing costs, signatures. Don’t use a generic residential home purchase form without heavy modification. Land transactions differ enough that a standard home form will miss critical issues like mineral rights, access, zoning, and environmental conditions.
Write every term in plain, specific language. “Seller will provide clear title” is vague. “Seller will deliver a general warranty deed conveying marketable title, free of all liens and encumbrances except those listed in Exhibit B” gives both parties something concrete to measure. Use calendar dates, not floating references like “within a reasonable time.”
Once the draft is complete, both parties should review it closely. This is where most problems surface: a contingency deadline that’s too tight, a cost allocation nobody discussed, a missing clause that leaves a gap. Have a real estate attorney in your state review the final version before anyone signs. Attorney fees for a contract review are modest compared to the cost of litigating an ambiguous clause.
All parties must sign to make the agreement binding. The purchase agreement itself typically does not require notarization, but the deed transferring ownership does in most jurisdictions because it must be recorded with the county recorder’s office. At closing, the escrow agent or closing attorney disburses funds to the seller, the signed deed is delivered to the buyer, and the title company records the deed in the public land records. Recording creates a public record of the transfer and establishes the buyer’s place in the chain of title. Keep copies of the recorded deed, the title insurance policy, the survey, and the signed purchase agreement in a secure location.