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The 2007 Vacant Land/Lot Purchase Contract

This guide outlines the key changes and details of the 2007 Vacant Land Purchase Contract to help buyers and sellers navigate the process effectively.

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The 2007 Vacant Land/Lot Purchase Contract

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  1. The 2007 Vacant Land/Lot Purchase Contract Presented by Jan Leighton, GRI, ePro& K. Michelle Lind, AAR General Counsel

  2. Revision Process • Identify Problems • Workgroup Process • Comment Period • Final Approval

  3. Primary Changes • Format resembles 2005 Residential Purchase Contract • Receipt section omitted • Section title change • Financing Commitment Contingency • Cure Period

  4. BUYER ATTACHMENT • Use to educate the buyer • Give to the buyer prior to submitting the offer • Not part of the contract

  5. 1. PROPERTY SECTION • Buyer and Seller identified. • If seller’s name is unknown, simply check “□ as identified in section 9c” which is the acceptance section. • Incidental Improvements • “AS IS”

  6. Close of Escrow • COE is when the deed is recorded at the appropriate county recorder’s office. • If either the escrow company or recorder’s office are closed on the “COE Date” • COE occurs on the next day that both are open for business.

  7. Agree to take all actions in sufficient time to allow COE to occur on the COE Date. The buyer obligated to deliver to the escrow company immediately available funds and instruct lender to deliver funds in a sufficient amount and in sufficient time to allow COE to occur on the COE Date.

  8. Possession • Seller agrees to deliver possession to the buyer at COE • The advisory in regards to the risks of pre- or post- possession agreements included

  9. Addenda • Assumption/Carryback • Buyer Contingency • Domestic Water Well • H.O.A. • Additional Clause • On-site Wastewater Treatment Facility • Addendum to Vacant Land

  10. 2. FINANCING SECTION • Most significant change • Patterned after AAR Commercial Contract • Clarifies financing contingency.

  11. Loan Status Report • The AAR Loan Status Report (“LSR”) must be attached to every offer. • It is NOT necessary that the buyer meet with a lender prior to submitting an offer

  12. Financing • Indicate whether the sale is contingent upon Buyer obtaining a satisfactory financing commitment within Financing Commitment Contingency Period.

  13. Financing Commitment Contingency • If the sale is contingent upon Buyer obtaining a satisfactory financing commitment, Buyer has thirty (30) days or specified number of days after the Contract acceptance (“Financing Commitment Contingency Period”) to obtain a financing commitment satisfactory to Buyer in Buyer’s sole discretion. • Prior to the expiration of the Financing Commitment Contingency period, buyer shall deliver to seller and escrow company notice that Buyer has not received such satisfactory financing commitment or buyer shall be deemed to have waived the financing commitment contingency and any right to cancel due to financing.

  14. Financing Application • Must complete within 10 days, unless previously completed • Buyer and Seller must promptly provide to lender all necessary documents • Buyer instructs the lender to provide loan status updates to Broker(s) and Seller.

  15. Appraisal Contingency • Contingent upon an appraisal of the Property for at least the sales price during the Financing Commitment Contingency Period

  16. Partial Release • Partial Release: Buyer and Seller agree that any partial releases will be addressed under Additional Terms and Conditions or attached Addendum.

  17. Subordination • If applicable, indicate whether Seller carryback financing is to be subordinated to a construction loan. • If Seller agrees to subordination, such subordination shall only be required if the Seller Carryback financing is not in default and if the Seller approves the terms and conditions of the construction loan to be recorded as a senior loan. • If seller subordinates the seller carryback financing to a senior loan, the seller acknowledges that in order to protect the seller carryback financing, the seller may have to make payments on the senior loan if the senior loan is in default.

  18. 3. TITLE AND ESCROW SECTION • Changes primarily in formatting.

  19. Title and Vesting • Buyer will take title as determined before COE. • Buyer advised to obtain legal and tax advice.

  20. Title Commitment and Title Insurance • Escrow company is instructed to deliver Title Commitment directly to the buyer and seller. • Seller will provide the best title policy available.

  21. Additional Instructions • Send notice of the pending sale to any HOA. • Allocate escrow company fees equally. • Send copies of all notices. • Provide the broker(s) access to escrowed materials and information. • Record the Affidavit of Disclosure at COE.

  22. Prorations, Expenses and Adjustments • Taxes: prorated through COE, based upon the latest tax bill available • discrepancy between the latest tax bill available and the actual tax bill handled as a Post Closing Matter • Insurance: If an assignment, the current premium shall be prorated through COE • Rents, Interest and Expenses: prorated through COE • any rents received after COE handled as a Post Closing Matter • Deposits: credited to Buyer or paid to Buyer

  23. Post Closing Matters • Any item to be prorated that is not determined or determinable at Close of Escrow as a Post Closing Matter by appropriate cash payment to the other party outside of the escrow when the amount due is determined.

  24. Agricultural Foreign Investment Disclosure Act • If applicable, Buyer and Seller agree to comply with the Agricultural Foreign Investment Disclosure Act to make the required disclosures to the U.S. Department of Agriculture.

  25. Tax Deferred Exchange • Advised to consult a tax advisor regarding advisability of a tax deferred exchange • Agree to cooperate provided COE is not delayed

  26. 4. DISCLOSURES SECTION

  27. Vacant Land/LotSeller Property Disclosure Statement (VLSPDS) • AAR VLSPDS form is now specifically required. • Seller shall deliver within 5 days after contract acceptance. • Buyer has the Inspection Period or 5 days after receipt of the SPDS, whichever is later, in which to provide notice of items disapproved.

  28. Additional Disclosures • any information known to Seller that may adversely affect the Buyer’s use of the Property • any known pending special assessments, association fees, claims, or litigation • articles of incorporation • by-laws; other governing documents; and any other documents required by law • financial statements, current rent rolls, lists of current deposits, personal property lists, leases, rental agreements, service contracts • soils, Phase I, or other environmental reports in Seller’s possession • the most recent survey, if available • any and all other agreements, documents

  29. Road Maintenance Agreement Seller shall provide to Buyer, within five (5) days after the Contract acceptance, a copy of any known road maintenance agreement affecting the Property.

  30. Wells • If a well is located on the Property, or if the Property is to be served by a shared well, attach the AAR Domestic Water Well Addendum • Seller shall assign, transfer and convey all of the water rights, or claims to water rights, if any, held by Seller associated with the Property.

  31. Problems • Bankruptcy • Probate • Insolvency • Violations • Environmental hazards

  32. Affidavit of Disclosure • If the Property is located in an unincorporated area of the county, and 5 or fewer parcels other than subdivided property are being transferred, the Seller shall deliver within 5 days after Contract acceptance. • The buyer should deliver any disapproved items within the Inspection Period or 5 days after receipt, whichever is later.

  33. H.O.A • Indicate whether the property is located within an H.O.A. • Attach the AAR H.O.A. Addendum

  34. Changes During Escrow • Seller agrees to immediately notify the buyer of any changes in the Property or the disclosures. • Unless the seller is already obligated to correct or repair the changed item, the buyer has 5 days to provide notice of disapproval.

  35. 5. WARRANTIES SECTION • Now separated from the Inspections section.

  36. Seller Warranties The seller warrants that at the earlier of possession or COE: • Property will be maintained and repaired (if necessary). • Any personal property included in the sale will be in the same condition as on the date of Contract acceptance. • All personal property not included in the sale and all debris will be removed.

  37. Buyer Warranties • Buyer has disclosed any information which may materially and adversely affect the buyer’s ability to close escrow • Buyer is not relying on any verbal representations concerning the Property except as disclosed

  38. 6. DUE DILIGENCE SECTION • The Inspections section is now entitled “Due Diligence” to reflect the fact that investigations and physical inspections of the Property are performed. • Inspection Period is 15 days.

  39. Inspection Period Obligates the buyer to: • conduct all desired inspections and investigations; • investigate applicable building, zoning, fire, health, and safety codes; • verify any material MLS information; • investigate the presence of sex offenders in the vicinity or the occurrence of a disease, natural death, suicide, homicide or other crime on or in the vicinity • consult the Buyer Advisory

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