Getting an offer on your campground or RV park is a big moment, but it is the start of the sale, not the end. Between the first offer and the day you hand over the keys come a letter of intent, a purchase agreement, the buyer’s due diligence, financing, closing and the transition. Knowing what each stage involves helps you plan your season and avoid surprises. The stages are much the same whether you use a broker or sell your campground to an operator such as GatherGrounds.
1. The letter of intent
A letter of intent (LOI) sets out the main terms both sides intend to agree on. It is usually short and mostly non-binding. Expect it to cover:
- price and how it will be paid (cash, bank or SBA loan, seller financing or a mix)
- the earnest money deposit and when it becomes non-refundable
- the length of the due diligence period
- a target closing date
- what is included: land, buildings, equipment, golf carts, rental units, inventory, the website, phone numbers, social media and booking accounts
- any period you will stay on to help with the transition
A few parts often are binding, especially confidentiality and an “exclusivity” or no-shop clause that stops you from negotiating with other buyers for a set time. Read those carefully and have your attorney review the LOI before you sign.
2. The purchase agreement
The purchase agreement is the binding contract. It is longer and more detailed than the LOI, and it is where most negotiation happens. Terms to watch:
- Representations and warranties: the facts you confirm about the park, and how long you stay responsible for them after closing
- Contingencies: the conditions that let the buyer walk away, such as due diligence, financing, appraisal or license approval, and their deadlines
- Deposit terms: when the deposit “goes hard” and who keeps it if the deal falls apart
- Price allocation: how the price is split among land, buildings, equipment and goodwill, which affects both sides’ taxes
- Prorations and credits: how property taxes, utilities and prepaid guest money are divided at closing
- Non-compete and transition terms, if any
Price allocation, installment payments and possible 1031 exchanges all have tax consequences. Talk to your CPA and attorney before you agree to these terms.
3. Due diligence
During due diligence, the buyer checks everything you have told them. Expect requests for:
- three or more years of financial statements and tax returns, plus bank statements
- the rent roll, reservation reports, seasonal agreements and deposits held
- utility bills, sub-metering records and water test results
- licenses, permits, inspection reports and zoning approvals
- contracts, leases, equipment lists and insurance history
The buyer will also inspect the property, often with contractors: electrical service, wells, septic or wastewater systems, roads, buildings and amenities. Lenders commonly require a survey, a title search and an environmental site assessment. Having documents ready in organized folders keeps this stage moving.
If the buyer finds something unexpected, they may ask for a repair, a price change or a credit at closing. This is normal. Honest disclosure up front makes these conversations shorter.
4. Buyer financing
Many campground buyers borrow from a bank or through an SBA-backed loan. The lender will order its own appraisal, review the park’s financials and may ask for more documents. If the appraisal comes in below the price, the buyer may ask to renegotiate or bring more cash.
Some sales include seller financing, where you carry part of the price as a note. It can widen the pool of buyers, but you take on the risk that the buyer doesn’t pay. Ask your attorney about security for the note and your CPA about the tax treatment of an installment sale.
GatherGrounds is open to seller financing.
5. Closing
Closing is usually handled by a title company or attorney. At closing:
- the buyer’s funds and loan proceeds are paid into escrow
- the deed transfers the land, and a bill of sale transfers equipment and personal property
- contracts, permits and accounts are assigned where allowed
- property taxes and utilities are prorated
- prepaid seasonal fees, deposits and future reservations are credited to the buyer, since the buyer will host those guests
- your loan is paid off and the balance goes to you
Some states also require a tax clearance before a business is sold. Your attorney will know what applies.
6. Handover
A good transition protects the park you built. Plan for:
- Staff: when and how they are told, and what the buyer’s plans are
- Seasonal campers and long-term guests: a clear letter explaining what changes and what doesn’t
- Reservations: moving the booking system, payment processing and future bookings to the new owner. Some reservation software companies have a formal process; Campspot, for example, asks for its change-of-ownership form at least three weeks before closing.
- Vendors and utilities: transferring accounts and service contracts
- Digital accounts: website domain, Google Business Profile, social media pages, email and phone numbers. List each one in the purchase agreement so nothing is left in dispute.
- Know-how: keys, codes, shutoffs, the location of underground lines, and the habits of the property that only you know
After a purchase, GatherGrounds aims to keep the existing staff and honor existing seasonal camper agreements, looking at each park case by case.
How long it takes
Every sale moves at its own pace. Due diligence findings, financing, license transfers and the season itself all affect timing.
If you would like to talk through the process with an operator who has been on the buying side, contact us through our Sell Your Campground page.
Questions
Is a letter of intent binding?
Usually not on price and terms, but confidentiality and exclusivity clauses often are. Have your attorney review any LOI before you sign.
Can the buyer back out during due diligence?
Usually yes, within the deadlines in the purchase agreement. That is why deposit terms matter: they say when the deposit becomes non-refundable.
What happens to seasonal deposits and future reservations at closing?
They are typically credited to the buyer at closing, because the buyer will host those guests. The purchase agreement should list them.
Who pays closing costs?
It varies by state and by deal. Title insurance, escrow fees, transfer taxes and attorney fees are split as the purchase agreement says. Ask your attorney what is customary where you are.
Do I need to stay on after the sale?
Not always. Many buyers ask for a short transition period, especially if you know the systems best. Agree on the length and terms in writing.
Thinking about selling? Talk with us confidentially through the form on our Sell Your Campground page.
