Top 50 Questions about Farmland
After executing a farmland purchase agreement, the earnest money payment—typically 10% of the gross price—must be paid. Therefore, it’s important to understand where to send it.
First, in farmland transactions, it’s essential to know who to make the earnest money check payable to. Usually, this is the seller’s attorney or a designated escrow agent.
Next, here are the details you need to consider:
Earnest Payment Details
- Amount:
- Generally, it’s 10% of the sale price.
- For example, on a $1,000,000 sale, the earnest payment would be $100,000.
- Payee:
- The check should be written to the seller’s attorney or a designated attorney specified in the purchase agreement.
- If the seller does not have an attorney, Whitaker Marketing Group typically uses its in-house attorney to hold the funds in a trust account.
- Trust Accounts:
- The attorney then holds the earnest payment in a trust account until the transaction closes.
Moving on, consider some special cases:
Special Cases
- If the property is part of a trust, receivership, or estate, the seller’s designated attorney will typically manage the funds. Consequently, it’s vital to follow this process.
Finally, here are the key takeaways:
Key Takeaways
- Firstly, write the earnest payment check to the seller’s attorney or as specified in the purchase agreement.
- Secondly, ensure the funds are held in a trust account for security until closing.
- And finally, remember that earnest money in farmland transactions is typically 10% of the sale price.
For a smooth transaction and professional assistance with all auction details, contact David Whitaker – Iowa Land Guy today!
David Whitaker | Iowa Land Guy
