Land Contract

[michelle]

Anybody buy their home with a land contract? My parents did, but that was back in the '80s. I heard that you don't have a lot of rights to the house. Like, let's say the person you buy it from gets in a car accident and is sued, they can still lose the house that you are paying for and living in. I know it isn't a very common thing these days, but just thought I would ask.

My uncle offered his house to Adam and me. It's definitely out of our price range (even with a very nice family discount) that we have been looking at, but it is a great house and even worth staying in WI for.

[Deggy]

You were planning on moving out of the state eventually?

[michelle]

I was planning on getting my teaching license for another state as well. I'm not a big fan of winter.

[Deggy]

So you move to florida/or southern area down there and have to deal with hurricanes, or move out west and have to deal with earthquakes (I don't even know how often those happen). I'll stick with Wisconsin winters.

Just giving ya shit. Where would you move to?

[michelle]

So you move to florida/or southern area down there and have to deal with hurricanes, or move out west and have to deal with earthquakes (I don't even know how often those happen). I'll stick with Wisconsin winters.

Just giving ya shit. Where would you move to?

The house is in Hubertus, which is the town I grew up in. It's actually a few miles from my parent's house, which kind of works with the Daddy's girl thing. (:

But Adam and I were thinking about Tennessee. He has family there and we really liked the area, minus the accents and that whole y'all thing.

[Deggy]

Where are the "you might be a red neck jokes"?

[USMARINE1108]

The house is in Hubertus, which is the town I grew up in. It's actually a few miles from my parent's house, which kind of works with the Daddy's girl thing. (:

But Adam and I were thinking about Tennessee. He has family there and we really liked the area, minus the accents and that whole y'all thing.

I've been living in the south for 7 years (when I'm here:durr), and to tell you the truth "y'all" grows on you. It's pretty usefull, same as "yous guys".

[Car Guy]

Arizona FTW...!!! We'll be headed down there this fall....:headbang :headbang :headbang

Back on topic......A land contract is a contract between the buyer and a private seller of a property, wherein the seller holds the title or deed to the property until all agreed upon payments have been made in full. This property may be improved or unimproved, vacant, or a home or a commercial building. With a land contract, a down payment is usually made, then equal monthly installments are paid until the property is paid for or until a balloon payment is required. A balloon payment is a lump sum of money that is due at a specified time, in this case at the end of the course of monthly payments.

A land contract can be compared to renting or leasing with the option to buy. Such options are different in that the agreement is usually filed and is a legal arrangement, giving the renter or lessee the option to buy the property at a prearranged time during the loan. Rent payments then become equity in the property.

While this type of agreement is usually recorded, a land contract may not be, making the legal recourse of the buyer tenuous should the agreement be flawed in some way. For example, if the seller still owes a mortgage on the property, the buyer assumes that the seller will use his monthly payments to pay the mortgage as well as any taxes or other liens, keeping the title free of encumbrances. If this occurs, the buyer owns the property free and clear at the end of the contract. If the seller does not keep up with payments owed, there could be trouble for the buyer.

While a land contract can seem very attractive to a buyer that is unable to secure a conventional loan, there are pitfalls to such an arrangement. Many sellers don't file or record the proper papers, in some cases because their lender would not agree to a sublet agreement or land contract. The lender may have stipulated that the borrower must have possession of the property. Making an end run around this provision by refusing to file the land contract can cause problems if the lender becomes aware of the situation.

The lender can demand payment in full of the loan, forcing you to procure a loan to pay off the mortgage if you don't want to give up the property. If you can't come up with the money, you'll lose everything you have invested in the property and be forced to move out. This can be especially painful if you have also spent money and energy improving the property.

Even if there is no mortgage on the property, there can be back taxes or other liens that the seller owes, which could cause you to lose the property or force you to come up with extra money. If you decide to take part in a land contract, make sure the title to the property is clear. Make sure the seller intends to file the proper papers to insure that you have some protection.

A land contract can be beneficial to buyer and seller alike as long as everything is above board. If you are unsure about any aspect of a land contract, consult with a real estate lawyer and have him or her look it over. :thumbsup






:3gears: :3gears: :3gears:

[fivonut]

My G/F and I bought our house on a land contract. We found a house we absolutely loved but it was way out of our price range on a conventional loan. Her mom had a large sum of cash she wanted to invest so she bought the house and sold it to us on the land contract. There is a fill in the blank type contract that typically is used, plus another form that prevents the title holder from placing a lien on the house or having the house taken to settle a lien. Since her mom paid in full and all back taxes taken care of when she bought it, we're not in any danger. Because, it was family the title was transferred into my name immediately where typically that wouldn't happen until the contract was settled. But, if you're buying out of state the laws will be different and you may be less protected. In Wisconsin the purchaser is pretty well protected.

[wikked]

Ask Screech (Dustin Diamond) about land contracts... :rolf

[70 cutlass 442]

Ask Screech (Dustin Diamond) about land contracts... :rolf

i herd something about that a while back. but didnt know the details.

[Waver]

My G/F and I bought our house on a land contract. We found a house we absolutely loved but it was way out of our price range on a conventional loan. Her mom had a large sum of cash she wanted to invest so she bought the house and sold it to us on the land contract. There is a fill in the blank type contract that typically is used, plus another form that prevents the title holder from placing a lien on the house or having the house taken to settle a lien. Since her mom paid in full and all back taxes taken care of when she bought it, we're not in any danger. Because, it was family the title was transferred into my name immediately where typically that wouldn't happen until the contract was settled. But, if you're buying out of state the laws will be different and you may be less protected. In Wisconsin the purchaser is pretty well protected.


Your house is like the deal of the century...I would kill for a house like that.

[fivonut]

Thanks, we were lucky to find it.

[wikked]

i herd something about that a while back. but didnt know the details.

http://www.movievine.com/publicity/article00369.shtml :thumbsup

[fivonut]

http://www.movievine.com/publicity/article00369.shtml :thumbsup

He got screwed by a shady seller and worse lawyer. Doesn't mean land contracts are bad. As far as I know, the seller shouldn't have been able to call in the balance like that.

[michelle]

So in conclusion, good idea, bad idea? I'm not worried about a family member screwing me over, just want to make sure I am aware of everything.

[fivonut]

I have no complaints about mine, but it was done through a lawyer and all proper paper work filed.

[michelle]

I have no complaints about mine, but it was done through a lawyer and all proper paper work filed.

Is the lawyer you worked with local?

[DirtyMax]

He lives up nort' so local to you and local to him are two different things... :thumbsup

[fivonut]

He lives up nort' so local to you and local to him are two different things... :thumbsup

yup, but yes he was local for me.