Once you’ve found the right ranch, negotiated a fair price, and agreed on the key terms, the next big step is drafting and signing the contract. This formal contract lays out all the details of the deal, protecting both the buyer and the seller. It’s more than just paperwork—it outlines the steps that you and the seller will take as you move towards closing. Here’s what you need to know about drafting and signing a solid contract for your future ranch.
Why the Contract Matters
A handshake may work for small deals, but when it comes to buying a ranch, you need everything in writing. The purchase agreement spells out the exact terms of the sale, so there’s no confusion or unexpected surprises down the road. This contract is legally binding and covers key aspects like price, financing, contingencies, and deadlines. A well-written agreement keeps the deal moving forward while protecting your investment.
We work with the Texas Real Estate Commission promulgated (it’s a fancy way of saying pre-written) contracts and forms. These documents are written to address the most common terms, conditions, and issues in the farm and ranch market and incorporate best practices. For areas that are not addressed in a promulgated contract or form, we work with a leading real estate attorney to draft contract language that is clear, concise, and fair for both parties.
Core Elements of the Contract
The who
Who is buying the property and who is selling the property. Contracts can be assigned by the buyer to another person or entity prior to closing if the assignment right is preserved. We often advise our clients to assign the contract to an entity for asset protection.
The what
The contract will clearly state what you are buying (in real estate terms, the parcels) and the agreed-upon purchase price. Because ranches do not change hands very often, buyer and seller typically agree on a price per acre that adds up to a purchase price. This purchase price can be adjusted based on the results of the new survey. For example, you and the seller have agreed on the sale of 100 acres for $1,000,000 ($10,000/acre). The survey comes in at 100.5 acres so you will pay $1,005,000 for the property.
These sections of the contract are also where you will determine which accessories will convey, how to handle the crop, mineral rights, and other items or rights that could convey with the property.
The when
These sections of the contract outline the timeline for closing and funding of the sale. Important dates are:
When the seller must provide all lease information to you (if not already provided)
How long the option period is (if any) and when closing is scheduled
When a survey (if needed) will be provided
When the title policy will be provided and how long the buyer has to object to exceptions in the title policy
When the buyer takes possession of the property (hint - it’s not at closing)
The where
Closing is typically done at the title company’s office, but most title companies will offer remote closing where someone is sent to you to sign and notarize documents.
The how
If you’re financing the purchase, the agreement may include details about your loan approval timeline. These transactions are typically done with the assistance of a title company which you and the seller will agree to. Specific details like wiring instructions will come from the title company, and we always recommend that you call to verify wiring instructions. Wire fraud is on the rise, and unfortunately real estate transactions are prime opportunities for wire fraud.
Contingencies
Contingencies give you an “exit strategy” if something isn’t right with the property. Some common ones include:
Inspection Contingency: The option period gives you time to check out the land, verify data provided to you or perform additional research, water sources, structures, and fences before fully committing.
Financing Contingency: Protects you in case your loan isn’t approved.
Clear Title Contingency: This gives you an opportunity to review the title policy to verify that there are no legal claims, unpaid liens, or easements that could cause issues later. Having these contingencies in place ensures you don’t end up locked into a bad deal.
Signing the Purchase Agreement
Once both parties agree on the terms, it’s time to sign the contract and make it official. Like in previous stages of buying a ranch, having a knowledgeable ranch real estate agent is invaluable. They’ll ensure the contract is written correctly, deadlines are met, and your interests are fully protected.
A well-drafted purchase agreement is an important steps in buying a ranch. If you’re ready to find the perfect ranch and want expert guidance throughout the buying process, reach out today. We specialize in land & ranch properties and have more than 20 years of experience helping people successfully invest in land & ranches.
Contact Us
Jacob Story, Land & Ranch Specialist
DFW Story Group
📞 817 201 8352
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