The Form RD 440-34 is a legal document utilized by the United States Department of Agriculture Rural Development, providing an option to purchase real property. This form serves as a formal agreement between a seller, who promises to sell, and a buyer, who is given the exclusive right to purchase specific property under set conditions, particularly aiding in obtaining a government loan for rural property acquisition. For those looking to secure rural properties through this structured deal, it's essential to understand and properly fill out this form.
Click the button below to start filling out the Form RD 440-34 and take the first step towards securing your rural property.
Navigating the intricacies of property transactions can often feel overwhelming. Fortunately, for those looking at real estate dealings within rural communities serviced by the United States Department of Agriculture (USDA), the Form RD 440-34 presents a structured pathway. This form, officially recognized and approved by the federal government, serves as an "Option to Purchase Real Property." It lays down the groundwork for a potential buyer to secure the rights to purchase land, under terms that facilitate access to governmental loans aimed at rural development. Significantly, the form encapsulates a clear, mutual agreement on the payment of the initial sum, detailed descriptions of the property in question, and vital terms regarding the conveyance of title, free of encumbrances, and other specific conditions like handling of taxes, title clearance expenses, and even scenarios like damage to the property before final sale. The document also accommodates considerations for governmental inspections and appraisals, signifying its comprehensive nature in ensuring both parties - the buyer and the seller - are aware of their commitments, roles, and protections under this agreement. With an emphasis on facilitating rural property transactions, the RD 440-34 form reinforces the USDA's commitment to fostering growth, sustainability, and development in rural communities across America.
Form RD 440-34
Position 5
FORM APPROVED
(Rev. 02-05)
UNITED STATES DEPARTMENT OF AGRICULTURE
OMB NO. 0575-0189
RURAL DEVELOPMENT
FARM SERVICE AGENCY
OPTION TO PURCHASE REAL PROPERTY
1 . In consideration of the sum of $
in hand paid and other valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned (hereinafter called the ''Seller''), who covenants to be the owner thereof, hereby, for the Seller and the Seller's heirs, executors, administrators, successors and assigns, offers and agrees to sell and convey to
(Name and Address)
(hereinafter called the ''Buyer''), and hereby grants to the said Buyer the exclusive and irrevocable option and right to purchase, under
the conditions hereinafter provided, the following-described property, located in
County, State of
:
(Insert here full and complete legal description, including volume and page where recorded, of the property including any water rights and water stock being purchased.)
According to the Paperwork Reduction Act of 1995, no persons are required to a collection of information unless it displays a valid OMB control number. The valid OMB control number for this information is 0575-0189. The time required to complete this information collection is estimated to average 30 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information.
The title to said property is to be conveyed free and clear of all encumbrances except for the following reservations,
exceptions and leases, and no others:
(insert here a full statement of all reservations, exceptions and leases, including in the case of leases, the date of the termination of the lease, the correct name(s) and address(es) of the lessee(s) and, if recorded, the place of recordation)
2. The option is given to enable the Buyer to obtain a loan made by the United States of America, acting through the
Rural
Housing Service;
Rural Utilities Service;
Rural Business-Cooperative Service;
Farm Service Agency, hereinafter called
the ''Government'' for the purchase of said property. It is agreed that the Buyer's efforts to obtain a loan constitute a part of the consideration for this option and any downpayment will be refunded if the loan cannot be processed by the Government.
3.
The total purchase price for said property is $
, said amount
includes
excludes the $
mentioned in paragraph 1.
4.The Seller agrees to pay all expenses of title clearance including, if required, abstract or certificate of title or policy of title insurance, continued down to the date of acceptance of this option and thereafter continued down to and including date of recordation of the deed from the Seller to the Buyer, costs of survey, if required, and attorney's fees; and the Seller agrees that, except as herein provided, all taxes, liens, encumbrances or other interests in third persons will be satisfied discharged, or paid by the Seller including stamp taxes and other expenses incident to the preparation and execution of the deed and other evidences of title. Title evidences will be obtained from persons and be in such form as the Government shall approve.
(Strike inapplicable language above or insert herein any different agreement regarding the paying of title clearance charges)
5.The Seller also agrees to secure for the Buyer, from the records of the Farm Service Agency, aerial surveys of the property when available, all obtainable information relating to allotments and production history and any other information needed in connection with the consideration of the proposed purchase of the property.
6.The Seller further agrees to convey said property to the Buyer by general warranty deed (except where the law provides otherwise for conveyances by trustees, officers of courts, etc.) in the form, manner and at the time required by the ''Government, conveying to the Buyer a valid, unencumbered, indefeasible fee-simple title to said property meeting all requirements of the Government; that the purchase price shall be paid at the time of recording such deed; and that said lands, including improvements, shall be delivered in the same condition as they now are, customary use and wear excepted.
7.Taxes, water assessments and other general and special assessments of whatsoever nature for the year in which the closing of the transaction takes place shall be prorated as of the date of the closing of the transaction, it being expressly agreed that for the purpose of such proration the tax year shall be deemed to be the calendar year. If the closing of the transaction shall occur before the tax rate is fixed, the apportionment of taxes shall be on the basis of the tax rate for the next preceding year applied to the latest assessed valuation.
(Insert here any different tax agreement)
8.This option may be exercised by the Buyer, at any time while the offer herein shall remain in force, by mailing, telegraphing or
delivering in person a written notice of acceptance of the offer herein to
at
, in the city of
,
County of
, State of
The offer herein shall remain irrevocable for a period of
in force thereafter until one ( 1 ) year from the date hereof unless earlier terminated by the Seller. The Seller may terminate
this offer at any time after the
months irrevocable period provided herein by giving to the Buyer ten
(10)days written notice of intention to terminate at the address of the Buyer. Acceptance of this option by the Buyer within ten (10) days after such notice is received by the Buyer shall constitute a valid acceptance of the option.
9.Loss or damage to the property by fire or from an act of God shall be at the risk of the Seller until the deed to the Buyer has been recorded, and in the event that such loss or damage occurs, the Buyer may, without liability, refuse to accept conveyance of title, or may elect to accept conveyance of title, in which case there shall be an equitable adjustment of the purchase price.
10.The Seller agrees that, irrespective of any other provision in this option, the Buyer, or the Buyer's assignees, may, if the option
is accepted, without any liability therefore refuse to accept conveyance of the property described herein if the foresaid loan cannot be
I
made or insured because of defects in the title to other land now owned by, or being purchased by, the buyer.
11.The Seller agrees to furnish, at Seller's expense, to the Buyer a certificate from a reliable firm certifying that the following described building(s) covered by this option (a) is now free of termite infestation and (b) either is now free of unrepaired termite damage or has suffered unrepaired termite damage which is specifically described in the certificate.
12.The Seller agrees to furnish. at the Seller's expense, to the Buyer evidence from the Health Department or a reliable and competent source that the waste disposal system for the dwelling is functioning properly, and the water supply for domestic use meets State Health Department requirements. This evidence must be in the Agency Office before a loan will be approved.
13.The Seller hereby gives the Government or its agents consent to enter on said property at reasonable times for the purpose of inspecting or appraising it, in connection with the making of a loan to purchase the property.
14.Insert here conditions peculiar to this particular transaction.
IN WITNESS WHEREOF, the Seller and the Buyer have set their hands and seals this
of
.
WITNESSESS:
(Sellers Telephone Number)
day
(Seller) *
(Buyer) *
*(Indicate marital status of Seller as ''married'', ''legally separated'', ''unmarried'', after signature)
(over)
(For use if Seller is a corporation)
IN WITNESS WHEREOF. the Seller has caused its corporate name to be hereunto subscribed by its
President, and its duly attested corporate seal to be hereunto affixed by its
Secretary, at
on the
day of
(CORPORATE SEAL)
Name of Corporation
By:
Secretary.President.
ACKNOWLEDGMENT
Filling out the RD 440-34 form correctly is crucial for executing an option to purchase real property through certain programs facilitated by the United States Department of Agriculture (USDA). This form serves as an agreement between the seller, who offers the property, and the buyer, who is given the exclusive right to purchase the property under specified conditions. To ensure a smooth and accurate completion, the following steps should be carefully followed.
By methodically following these steps and providing detailed, accurate information, the process of completing the RD 440-34 form should be straightforward. This will facilitate a clear, enforceable agreement between the seller and buyer regarding the option to purchase real property.
Form RD 440-34, also known as the "Option to Purchase Real Property" form, is a document approved by the United States Department of Agriculture (USDA) specifically for use in transactions involving the purchase of real property under certain USDA programs. Essentially, it serves as a formal agreement where the seller offers and the buyer agrees to the option to purchase specified property under conditions laid out in the form. This document is crucial for anyone looking to buy property supported by USDA loans, as it outlines the terms concerning payment, title clearance, responsibilities for damages, and other essential aspects of the property transaction process.
Both sellers and buyers engaging in property transactions facilitated by USDA loans, particularly through the Rural Housing Service, Rural Utilities Service, Rural Business-Cooperative Service, or Farm Service Agency, must complete Form RD 440-34. It is vital that this form is meticulously filled out and submitted by those parties to ensure the terms of the option to purchase real property are clearly defined and legally binding. This agreement acts as a safeguard for both parties, ensuring the buyer can secure necessary government-backed financing and the seller is protected against unforeseen liabilities.
The form necessitates detailed information regarding the property transaction, including:
Additionally, both parties’ contact information, signatures, and the agreement on the irrevocable period during which the option to purchase can be exercised are required.
Form RD 440-34 can be obtained from USDA offices or their official website, ensuring you have the most current version of the form. Once completed, the form should be submitted to the relevant USDA agency processing your property transaction. It is advisable to keep a copy for your records. The USDA recommends contacting them directly or consulting with a legal advisor to assist with completing the form accurately and to understand the submission process fully.
Filling out form RD 440-34, an option to purchase real property from the United States Department of Agriculture (USDA), requires careful attention to detail. Mistakes on this form can lead to significant delays or even jeopardize the purchase entirely. Below are common errors made when completing this form:
Not verifying ownership details: Assuming without confirmation that the seller is the actual owner or has the legal authority to sell the property is a pivotal oversight.
Incomplete legal description: Failing to include a full, accurate legal description of the property, including any applicable water rights and stock being purchased, can invalidate the form.
Misunderstanding the financial terms: Omitting detailed terms of the transaction, such as whether the total purchase price includes or excludes certain amounts, leads to ambiguity and potential dispute.
Overlooking encumbrances: Not specifying or incorrectly listing reservations, exceptions, leases, and encumbrances that will not be cleared at conveyance leaves the buyer uninformed.
Incorrect titling and recording details: Assuming standard practices without confirming the form, manner, and timing as required by the government can cause rejection.
Leaving prorations unspecified: Ignoring or misstating how taxes, water assessments, and other assessments will be prorated can result in financial discrepancies at closing.
Lack of specificity about option period and acceptance: Being vague about when and how the option can be exercised by the buyer or terminated by the seller introduces uncertainty into the agreement.
Neglecting to detail property condition standards: Not clarifying the condition in which the property will be delivered, including what constitutes customary use and wear, can lead to disagreements.
Failure to meet health and safety certifications: Omitting or improperly documenting the certificates that verify termite infestation status, water supply, and waste disposal system functionality can prevent loan approval.
Each of these mistakes not only delays the process but also potentially alters the terms of the sale, impacting both the buyer and seller significantly. Ensuring accuracy, completeness, and clarity in filling out the RD 440-34 form is essential to the success of the property transaction.
When navigating through real estate transactions involving Rural Development or other government entities, various forms and documents complement the Form RD 440-34, enhancing and verifying the information contained within. These documents play vital roles in ensuring the transaction adheres to legal requirements and standards.
The integration of these documents with Form RD 440-34 assures all parties involved in the transaction that thorough diligence has been applied, ensuring a legal, secure, and well-documented transfer of property. Such comprehensive preparation not only facilitates smoother transactions but also minimizes the risk of future disputes, paving the way for successful real estate dealings within the framework of Rural Development projects.
An Option Agreement for real estate is similar because it grants the buyer the right, but not the obligation, to purchase a property under specified conditions, likening to the RD 440-34 form's purpose of allowing the buyer to purchase if a loan is approved.
A Real Estate Purchase Agreement shares similarities, as it outlines the terms under which property will be sold and transferred from seller to buyer, including price and description of the property, similar to sections within the RD 440-34 form.
A Deed of Trust is related because it involves the legal title of property being held by a trustee until a loan on the property is paid off, akin to the RD 440-34 form’s stipulation regarding the clearance of title and encumbrances.
A Warranty Deed is comparable as it guarantees the buyer is receiving clear title to the property, directly related to the RD 440-34’s requirement for the seller to deliver a general warranty deed ensuring an unencumbered title.
An Escrow Agreement has similarities since it involves a neutral third party holding funds or assets until certain conditions are met, reflective of the RD 440-34’s arrangement for handling payments and title transfer upon fulfilling specified conditions.
A Property Disclosure Statement is akin to the RD 440-34 form because it requires the seller to disclose specific information about the property’s condition, which is parallel to the RD 440-34’s obligations for the seller to provide details on termite damage, waste disposal, and water supply systems.
A Title Insurance Policy is related, as it protects the buyer from future disputes over the title, similar to the RD 440-34 form’s emphasis on clearing title encumbrances and ensuring the property is free of claims for the buyer.
Lease Agreements, particularly those with an option to purchase, have similarities since they offer the lessee the right to buy the leased property, which aligns with the RD 440-34 form’s objective to secure an option to purchase under certain conditions.
When completing the RD 440-34 form, an option to purchase real property, it's vital to ensure accuracy and thoroughness. Below are essential do's and don'ts to consider:
Remember, the RD 440-34 form is a legal document. Careful attention to detail and thoroughness in completing each section avoid potential disputes and facilitate smoother transactions involving rural property purchases.
When it comes to understanding the Form RD 440-34, commonly used in transactions involving the option to purchase real estate, there are several misconceptions that can complicate its usage. Clearing up these misconceptions ensures that both buyers and sellers can navigate their property purchase or sale more effectively.
Misconception 1: The form locks the buyer into purchasing the property. In reality, Form RD 440-34 grants the buyer the option, but not the obligation, to purchase the property. This distinction provides flexibility for the buyer.
Misconception 2: The form is only used for agricultural property transactions. While it's commonly used in rural settings due to its association with the USDA's Rural Development program, this form can also apply to different types of real estate transactions within designated areas.
Misconception 3: A buyer can exercise the option to purchase at any time. The form specifies that the option to purchase is valid for a defined period. If the buyer does not exercise this option within the timeframe, it expires.
Misconception 4: The seller can sell the property to another party during the option period. Once a buyer holds an exclusive option, the seller cannot legally sell the property to someone else within that period without consequences.
Misconception 5: The price listed in the form is final and non-negotiable. The total purchase price mentioned can often be adjusted based on further negotiations, appraisals, or inspections leading to adjustments in the property's value.
Misconception 6: The buyer is responsible for title clearance and related expenses. The form clearly states that the seller agrees to handle all expenses related to title clearance, providing further protection to the buyer.
Misconception 7: Government loan approval is guaranteed for the buyer. The option to purchase is given to enable the buyer to seek a loan from government agencies, but this does not assure that the loan will be approved. It is contingent upon meeting specific criteria set forth by these agencies.
Misconception 8: The form covers all aspects of the real estate transaction. While comprehensive, the form may require addendums or additional agreements to address unique aspects of the transaction not covered within its standard provisions.
Understanding these key points about Form RD 440-34 ensures a smoother transaction process for both parties involved, by setting clear expectations and responsibilities from the start.
Cbs Sports Bracket - Creates an opportunity for educational activities around probability and statistics.
Semi Annual Sprinkler Inspection - Promotes comprehensive oversight of fire protection measures through detailed documentation, fostering a culture of safety and preparedness.
Form Dl-43 - The DL-43 form is necessary for individuals looking to convert an out-of-state license to a state-specific license.