Nicholas Smith Zui Tao Ziao Liu Land Contracts Nicholas Smith Zui Tao Ziao Liu

What Is a Land Contract? A Land Contract is an agreement between a buyer and seller of property in which the buyer makes payments toward full ownership and the title or deed is held by the owner until the full payment or obligation is fulfilled.

Land Contract Law Michigan China Typically, purchasers gain immediate possession and control of property. Immediately gain equitable title while legal title stays with the seller. By state statute, interest charged cant exceed 11 percent. Law prohibits sellers from further pursuing land contract buyers for money after a forfeiture. Seller must tell buyer about every known problem wrong with the home. China Only relates to rural land. Farmers are allowed to contract their farm land use rights.

Benefits From Sellers Perspective Easier to sell – Can establish own terms with buyer which makes it more appealing. Tax advantages – taxable income can be spread out with the payments. Regular cash flow without having to manage rental property. Able to charge interest on the payments. Easily able to take back property in case of default. Low closing costs. Large pool of buyers.

Benefits From Buyers Perspective Buyer doesn’t have to meet standards for traditional mortgage loan approval. Able to negotiate better terms. Low closing costs. Payed off a lot sooner because will most likely have balloon payment at end. Appraisal, survey and title search is not necessary.

What Should Be Included On The Contract? 1. Payment Terms – Down payment, interest rate, number of years of contract and amount of monthly installments. 2. Provision that gives buyer of property possession of the property. 3. Provision indicating buyer has received title insurance policy and buyer accepts condition of title. 4. Provision covering property taxes – who pays during contract period. 5. Provision requiring seller to deliver warranty deed to the buyer. 6. Provision requiring seller to pay transfer taxes when delivering deed to buyer.

What Should Be Included On The Contract? Cont. 7. Provisions with respect to liability & causality insurance. 8. Provision specifying whether the buyer can or cannot transfer its interest in the land contract without the prior consent of the seller. 9. Provision requiring the buyer to maintain the property in good condition. 10. Provision addressing whether or not a buyer can make substantial changes to the property without the consent of the seller. 11. Provision regarding the seller’s right to place mortgages on the property. 12. Provision spelling out the legal remedies permitted the seller in the event the buyer defaults under the terms of the land contract. 13. Provision specifying that upon execution, the land contract will become part of the public record by being recorded with the County Register of Deeds.

Where Can I Buy A Land Contract? Zillow.com Realtor.com Homes.com Craigslist.org Landcontractrealty.com Any local real estate company/website. Land contracts are everywhere, just have to find them.