Re: Land contract?
[Re: Kent Smith]
#7120231
01/04/21 04:16 PM
01/04/21 04:16 PM
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Joined: Mar 2012
Posts: 4,324 AK
FairbanksLS
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trapper
Joined: Mar 2012
Posts: 4,324
AK
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If a land contract is used be sure a notice of contract is recorded showing on public record you have entered into an agreement with them to purchase.
With out something on record they could sell it again to someone else if they so chose to do so. Also get a title insurance policy on the land.
TrapperKent Good advice. I didn't know you could get title insurance on property prior to ownership.
formerly posting as white dog
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Re: Land contract?
[Re: wisconsinteacher]
#7120245
01/04/21 04:34 PM
01/04/21 04:34 PM
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Joined: Jan 2007
Posts: 3,960 Northern Nevada
Bob
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trapper
Joined: Jan 2007
Posts: 3,960
Northern Nevada
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I am always leery of contract for deed type situations. It can work out, but there is a lot that can go wrong. If you can get the loan, go that route, it may cost a little more but in the long run it could save you a lot of headaches. And never, ever, buy land/real estate without purchasing title insurance. It’s really cheap and if there’s a problem with the title, it’s the insurance company’s problem, not yours.
"I have two guns, one for each of ya."
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Re: Land contract?
[Re: wisconsinteacher]
#7120273
01/04/21 04:44 PM
01/04/21 04:44 PM
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Joined: Dec 2006
Posts: 29,942 williamsburg ks
danny clifton
"Grumpy Old Man"
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"Grumpy Old Man"
Joined: Dec 2006
Posts: 29,942
williamsburg ks
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Make payments directly to a bank account also. If ever there is a dispute on whether or not you paid/missed payments, you will have a good advocate. Landowner wants the extra nickel. The interest you would pay the loan company. Also the interest on the account you pay the money into untill he likely invests it someplace.
Last edited by danny clifton; 01/04/21 04:46 PM.
Those who would give up essential liberty, to purchase a little temporary safety, deserve neither liberty nor safety. Benjamin Franklin (1706-1790)
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Re: Land contract?
[Re: wisconsinteacher]
#7120303
01/04/21 05:23 PM
01/04/21 05:23 PM
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Joined: Feb 2020
Posts: 306 Sandpoint Idaho/ Whitesboro TX
cbat
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trapper
Joined: Feb 2020
Posts: 306
Sandpoint Idaho/ Whitesboro TX
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It is a pretty good way of doing actually .Go through a title company and pay them for their services. They will do title search etc. This way you are protected by their insurance also. My wife and I have financed a couple real estate contracts this way. Title company takes care of collecting payments each month and then they are the ones that direct deposit the monies in our account each month. Plus if the loans go in default they are the ones to generate the paperwork for a forclosure and such.
The real Wally
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Re: Land contract?
[Re: wisconsinteacher]
#7120308
01/04/21 05:32 PM
01/04/21 05:32 PM
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Joined: Dec 2006
Posts: 8,519 NWWA/AZ
Vinke
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trapper
Joined: Dec 2006
Posts: 8,519
NWWA/AZ
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use a title compony to record sale
Slightly used Shoes 4 sale,,,,,,May special,,, Act Now... Free Sock with every purchase
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Re: Land contract?
[Re: wisconsinteacher]
#7120312
01/04/21 05:35 PM
01/04/21 05:35 PM
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Joined: Jan 2008
Posts: 9,249 Alaska and Washington State
waggler
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trapper
Joined: Jan 2008
Posts: 9,249
Alaska and Washington State
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Sometimes when a seller says they want to sell on a land contract they really don't know what they are taking about.
What they probably mean is they want to sell it to you on terms and they receive the payments over time, not all cash at closing. It is very easy to do that in a way that protects both the seller and the buyer.
1) Usually you start with Purchase and Sales Agreement (PSA) which stipulates the agreed price, closing dated, contingencies, etc. This document is not recorded and is in effect until you close the deal or the deal falls apart.
2) At closing a Promissory Note is executed where the amount owed is stipulated, the interest rate, monthly payment amount and when, and the length (term) of the note. Often times this note is not recorded, sometimes it is but I don't believe most States require it to be recorded.
3) Also at closing a Deed of Trust (DOT) is drawn up and recorded. This protects the seller so that if you default the property can be rather easily foreclosed on by seller (no court procedures need to take place). This document basically deeds the property back from you to the seller if you default.
4) A Deed is drawn up and recorded naming you as the Grantee (buyer/owner). This is also recorded at closing.
An attorney can do this for you, or a better and usually cheaper way to do it is to used an escrow/title company to do it. Currently where I am that costs about $750, and usually the buyer and seller split the costs.
This method (DOT and Promissory Note) is much better for protecting both parties from any potential legal problems in the future. Buying and selling on a contract is a bad idea in my opinion.
"My life is better than your vacation"
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Re: Land contract?
[Re: wisconsinteacher]
#7120344
01/04/21 06:00 PM
01/04/21 06:00 PM
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Joined: May 2016
Posts: 3,547 Southern Illinois
Foxpaw
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trapper
Joined: May 2016
Posts: 3,547
Southern Illinois
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I can see them wanting to spread it out over a few years to lower the tax bill, but if they are wanting a huge down payment then it looks to me they are defeating the purpose if a huge hunk of income would be their first payment. They can charge you a lot more interest than the 1% they can get at a bank and maybe still a less cost to you than if you borrow it. You make the contract deal and the deeds and abstracts or title insurance will be held by a third party in escrow and they will take the payments and give you the deeds and abstract when you make the last payment. If I was going to do that I would try to get them to lower the big down payment. Also get them to put you in a grace period in case for some unseen reason you couldn't get the money to them (say you have wreck and was hurt bad). I always either got atleast a 30 day grace period or gave atleast 30 days if I was selling. Another bad thing is if you get it at a longer term of years and decided or needed to sell it, then they probably won't let you pay it early if their reason was to avoid taxes, then if you sell to another person to take over your payments thats extra paper work. Sometimes they will let you pay it off early even if its not in the contract, depending on their situation at the time.
Last edited by Foxpaw; 01/04/21 06:01 PM.
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Re: Land contract?
[Re: wisconsinteacher]
#7120406
01/04/21 06:52 PM
01/04/21 06:52 PM
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Joined: Dec 2011
Posts: 10,447 MT
snowy
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trapper
Joined: Dec 2011
Posts: 10,447
MT
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A lot of land deals like that in my country. In most cases thou buyer/seller know of each other or and they are from the area and a trust has formed just that they are locals per se.
Give me a fish, I will eat for a day. Teach me to fish, I will eat for a lifetime
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Re: Land contract?
[Re: jbyrd63]
#7120448
01/04/21 07:19 PM
01/04/21 07:19 PM
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Joined: Dec 2006
Posts: 63,255 Minnesota
330-Trapper
trapper
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trapper
Joined: Dec 2006
Posts: 63,255
Minnesota
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I found one farm that the only way they would do it was as described. Didn't want all at once because of taxes. Land contract is just like owner financing Have it set up just like a bank loan but the owner holds the lien. Land contract is same as a bank loan if it is done properly. EVERYTHING IN WRITING . Just have an attorney draw it up and you will be fine. Absolutely correct And some deals to be had that way
NRA and NTA Life Member www.BackroadsRevised@etsy.com
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Re: Land contract?
[Re: wisconsinteacher]
#7120581
01/04/21 08:49 PM
01/04/21 08:49 PM
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Joined: Oct 2008
Posts: 487 Northeast Ohio
zook
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trapper
Joined: Oct 2008
Posts: 487
Northeast Ohio
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Get a lawyer to draw up the papers for you. He may just want long term Income. I do a land work for a living. Something to keep in mind is that unless you’ve paid up I believe it’s like 60-70% of the contract value. They still have full day in the minerals and or surface disturbance. Like if a pipeline came through and you’ve only paid 30% of the contract value hey could sign for it and keep the cash from that transaction.
Can't kill em sittin at home.
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