Land Contract Info?

[mesa123]

Does anyone know if there are any resources available online for putting together a land contract? Normally we go to Staples or some other store for their convenient contract packets, like buying real estate, selling a house, etc. They have packets for nearly everything, but we can't find a packet for land contracts. Figure there has to be some sample forms online...but I can't find them.

[Shadow]

We could not find a one when we decided to sell out our rental property, so we worked and worked and came up with the one we used for the past 24 years. We call it a contract for deed. Ove the years several of the realestate agents started using it. My advise is get a lawyer draw you up one we understood the laws enough and they will be different state by state. Buying or selling for most people this is not a DIY type form. David

[7thswan]

Contact a Title company.

[Witterbound]

Call a lawyer. It shouldn't cost that much..

[Billie in MO]

I second getting a lawyer for this. We did that with our property in CO. We rented it out for a year with option to buy. Then did owner finance. We got a lawyer who specialized in real estate to draw up the contract and it was worth every cent. We wanted all our bases covered.

[wwubben]

I would not buy or sell property without an attorney.I have seen too many people stung and some lost big money.

[Yvonne's hubby]

I recommend an attorney, and one familiar with real estate law. You would be surprised at how many attorneys are clueless in that particular field. When dealing with an owner finance situation there are just too many variables for a "one size fits all" contract.

[7thswan]

If you are going to buy this land, you will need to do a title search. Is the seller going to provide a Title Insurance or is the buyer going to provide it.Someone is going to have to hold the deed,usally it is the Title co. If there is going to be a Title co. they will provide the paperwork for a Land contract, usally for free.

[the mama]

Call ATTRA, they have grazing contracts and may have others.

[Old Vet]

Land contracts have many thinks that can be in them. So I would never buy on a land contract unless it was read by an attorney. I would never sell with out an attorney writing it up for me.

[Terri in WV]

Most of the lawyers that I contacted about drawing one up flat out said they wouldn't do them and suggested to me that I shouldn't consider it on my house.

The one that I finally found to draw one up agreed to do it, with it being noted that he advised me against it. There were changes that he mentioned and after his explanations, I agreed. The #1, being, not a land contract, but a lease w/purchase option. The reason-renters are easier to remove for default. With land contracts, they hold title also and it's a lot harder to remove them from the property.

My mom had a LC on one of her properties as I was drawing up my L/P option. They defaulted on her and it took close to a year, lawyer fees and several court appearances to finally regain possession of the property.

I think my $350 was well spent for my airtight contract.

[Lazy J]

Just get a mortgage so the deed is transferred.

[texican]

If your selling, and they give you a sackful of cash (that will clear through the bank.... make sure it isn't counterfeit) you have little to lose. Standard form, fill in the blanks, notarize, and bam, your done.

Buying, you have everything to lose, if you don't get title insurance (if you can't do it yourself). You could be buying the proverbial pig in a poke... any funds you give could simply disappear. Title insurance, and going through a lawyer is very cheap, relatively speaking.

Having worked in the business (professionally) for close to four years, I'm always amazed what people think they're doing, by trying to save a few nickels, and end up in the end spending a fortune... to clear up problems they should have known about before even starting the process.

The days of handshake deals are slipping away... unfortunately. The last handshake deal I had, the other party bolted, and sold out to someone else (who 'thought' they were getting more than they actually got).

[Witterbound]

Texican has it right. Land contracts protect the seller, and can be very risky for the buyer. Why? The seller owns the land, and the buyer typically can't qualify for a mortgage from a bank, so the seller has all the leverage in the negotiations. Most land contracts I've seen do not give the buyer title until he or she has paid the buyer everything -- maybe 30 years down the road. Some land contracts utilize an escrow agent, and demand title insurance at the outset, but this is rare, because the buyer doesn't want to do it, and the seller doesn't want to pay for it. Typically, if the buyer misses one or two payments, the seller has the right to consider the contract cancelled, throw the buyer off the land, and keep every nickle the buyer has paid. And the buyer also has to worry about the seller having good title a long way down the line, when the buyer pays off the contract. If the buyer dies, you've got problems. If the buyer goes bankrupt, you've got problems. If the buyer gets sued and has a judgment against him, you've got problems. There are just all kinds of potential problems, that it's never a good idea to do a land contract, if you can buy the land any other way. And there's the problem, buyers who buy using land contracts typically have no other choice, so they are willing to take the risk. Often they walk away, or miss a payment, before the end, in which case the payments have been just like rent.... One cavaet -- laws governing land contracts differ from state to state. You need to check out the laws in your state.

[edcopp]

Land Contracts are very different from state to state. Ohio is NOT a piece of cake state. There are 21 "points of law" that MUST be included in a L/C in Ohio. All land contracts in Ohio MUST be recorded (at the court house).

That said a title company can usually do a good job for you, since all or most of them are owned by lawyers. The few that are not owned by lawyers do have one on retainer.

Beware of the "old family lawyer" who does not know squat from apple butter about real estate. He/She will not hesitate to charge you double. Once for the contract that he had his secretary type up, and once for the "research" done when looking it up on line. Might even charge you for research again when selling you title insurance.

The stationery stores are worth about minimum wage or less as far as what they have to sell you. Ask them how to use the product. Duh.

[TnAndy]

Originally Posted by Witterbound

Texican has it right. Land contracts protect the seller, and can be very risky for the buyer. Why? The seller owns the land, and the buyer typically can't qualify for a mortgage from a bank, so the seller has all the leverage in the negotiations. Most land contracts I've seen do not give the buyer title until he or she has paid the buyer everything -- maybe 30 years down the road.

Thought edcopp is correct, that is the way land contracts work in MOST States....it's simply a long term purchase handled by the seller to the buyer, and the buyer DOES NOT get title to the property until that very last payment ( or early payoff ) is made.

The reason buyers do this is they can't qualify to borrow money from anywhere ( like a bank ). Problem is, they are pretty much at the mercy of the property owner UNTIL that last payment. Step in one of life's holes, and get behind, you could lose everything you've paid the seller PLUS any improvements you did along the way. You have ZERO equity until the very last payment is made. THAT's why lawyers don't recommend them....they are a HUGE risk for the buyer.

The reason sellers do this, is they KNOW the buyer is probably a flake, and won't carry out the full terms, and they can get the property back a whole lot easier than if they did a conventional mortgage with the buyer, using a note and deed of trust ( same as the bank does ). They have to actually foreclose using the conventional mortgage method, and the buyer would retain some equity ( especially 10-20 yrs down the road ) that the seller would have to "buy back" that equity from other potential bidders on the courthouse steps IF they want the property again....or loose out on the amount they didn't get paid on the whole deal if they let it go...

Land contracts bypass all that. ( in most States, which is why you need to see a lawyer for your State ).


As a buyer, I'd never do one.

As a seller, I might, but even then, I'd check out the buyer, and have an air tight contract.

What happens if you "sell" the buyer a 100ac tract with mature timber on it....he goes in, logs it off, makes 100grand on the timber sale, and then walks off, leaving you holding a logged off mess after a few monthly payments ?

Got a provision in your contract for that ?

OR you sell him a property with a house....and he fails to keep up the property insurance, and it burns down while the insurance is lapsed. You think you're EVER gonna get a dime out of him ?

LOT of things to consider....from both sides.

[Terri in WV]

Land contracts, as explained to me by my lawyer(for WV), is like a regular bank loan with the owner being the bank. The buyers have more claim to the property than what renters would, just the same as someone with a regular mortgage. So, no they don't actually get the title(worded wrong the first post), they have a vested interest in it until the time it's payed off.

That's why it's harder to remove them. My mom had to follow procedure and foreclose on her own property to get it back because of the LC. They had only paid 3 months and it took her several more months to get them removed and longer to get their stuff out and get title back to her property.

In my L/P option, if they are 30 days late, I can reclaim the property and have them removed immediately. They are responsible for the taxes, general maintenance and insurance. They cannot make any changes to the house without consulting me first nor can they alter the property in any way or cut any trees.

[Yvonne's hubby]

Owner financing is a good tool to get people from where they are to where they want to be. Land contracts, contract for deed, deed with mortgage, lease with option to purchase are all various ways to accomplish the ultimate goal. I have used all of these various forms to both buy and sell properties over the years with very good results. The key is to do business with honorable people. In todays economic environment, owner finance is going to be a very popular tool once again for those who have less than perfect credit or those even with great credit who wish to relocate to a "new" area. Sellers and buyers should both be well aware of the pitfalls, and protect themselves with which ever instrument they opt to go with. Oh, and btw.... there is no such thing as an iron clad contract. There will always be some one who will find a way to argue a point in court and wriggle out of a contract if they want to. Thats what lawyers do for a living!

[lamoncha lover]

We have bought several places with a contract for deed type loan. They have worked out well for us. Our last purchase was our land. We paid it off 10 years early with a 10% reduction in the cost.
I do think with the economy the way it is we are going to have to go back to more creative financing options.