Anyone heard of this?

[Scrounger]

I've seen it 3-4 places that a "new" thing with land sales is a contract where the seller retains a percentage of the profits if his buyer sells within a certain time. It would be sort of like this: Seller (A) sells property to (B). The contract reads such that if (B) sells within a year (A) would get 95% of the PROFIT from the sale. Each year (up to say, 20 years) the percentage becomes less - at 10 years (A) would recieve 50% of the PROFIT from the sale - and so forth.

To me, this would be something that kills the sale, if I were (B). It's like a guy who buys a car for $500, then sells it next month for $1500 - and the original owner coming back and saying HE gets $950.

Do people REALLY sell on this type of contract? Sounds pretty greedy to me! I'd think it would be pretty stupid for (B) to sign something like this.
What do you think?

[Micahn]

No way I would buy anything that was that way no matter what it was or how bad I want it. That is the same as someone buying land and not getting the mineral rights to it just seems stupid to me.
The way land is it will go up a little every year. If you was tied into that sort of deal even 15 or 20 years down the road you would have to pay for it again. What happens if you die and your kids sell the land do they still have to pay the person or even their kids ? just stupid to me.

[bill not in oh]

About once a month I have to update my "Top 10 Dumbest Things I've Ever Heard Of" list. Now I gotta do it again...

[georgec]

This is probably to prevent someone from buying the land just to subdivide and resell.

[wy_white_wolf]

I've seen it on houses too. Suppose to keep people from flipping them.

My brothers place is on something similar to that except the land was given to him. If he sells he has to pay the previous owner a percentage of the sale. It drops by 5% every year he owns it and in 20 years it be at 0%. This is often done with free land.

Some farmers have caght on to keep the farms from being subdivided.

[foxtrapper]

Probably most common in areas with slimy house flippers. They go find some little old lady and convince her that her house is only worth $20k. They then sell it a few days later for $180K. Happens around here a lot.

[Micahn]

Originally Posted by wy_white_wolf

I've seen it on houses too. Suppose to keep people from flipping them.

My brothers place is on something similar to that except the land was given to him. If he sells he has to pay the previous owner a percentage of the sale. It drops by 5% every year he owns it and in 20 years it be at 0%. This is often done with free land.

Some farmers have caght on to keep the farms from being subdivided.

That is the one case I would understand it happening. Someone want to give me some land with this deal :-)

[bill not in oh]

Originally Posted by wy_white_wolf

My brothers place is on something similar to that except the land was given to him. If he sells he has to pay the previous owner a percentage of the sale. It drops by 5% every year he owns it and in 20 years it be at 0%. This is often done with free land.

Now THIS I could see... I'm wondering, however, what the circumstances would be that someone would give land to another person...

[Scrounger]

OK, then suppose that the buyer HAS to sell in 5-6 years due to illness, injury, divorce, etc. He still gets the shaft, even if his original intentions were to hold it for 50 years. It might make sense for a seller, but as a buyer, it would be a deal killer for me.
Or what if the buyer DIED?

[freeinalaska]

Originally Posted by bill in oh

Now THIS I could see... I'm wondering, however, what the circumstances would be that someone would give land to another person...

Yeah I'll take some. No really I would expect a situation where a relative gives the land to another relative would make sense.

[quietstar]

America is wonderful with so much freedom that even dogone fools get to act like themselves. I've seen a bit of this, but I like clean, up front transactions myself. The beauty of contracts is that they can contain almost any provision that doesn't promote illegal activity. I can understand this kind of deal if you were transfering land to someone with the primary consideration being "love and affection" which appears on many deeds. If the Grantee was young and/or foolish, this condition might encourage them to satisfy your wishes and hold the property a while...Glen

[zookeeper16]

Three words: Oh heck no!

[Spinner]

It would be a deal killer for sure. Kind of like buying property and the seller keeps a percentage of ownership for years and years.

It could work the other way too. Buy a property for $100,000 and you have to sell it for $80,000, does the previous seller have to absorb part of the loss too? Hey, fair is fair, if they are going to horn in on the profit, they should have to absorb the loss right along with it.