The land contract refers to an agreement where the owner of the property which may be building or land generally finances the sale of the property instead of selling it through a third party. In this contract, the buyer is made to pay for the property in installments and he is not considered to be the owner of the property until and unless the last installment is paid.
This kind of contract generally happens when there is a lack of finances with the buyer who cannot hire a third in this procedure. Land contracts in Michigan are generally carried in this way. The entire risk of the buyer is taken by the seller instead of the third party in this case. Certain things should be considered while selling homes under land contract.
- The details of the contract should be given in the initial section of the contract only. Streets addresses should be avoided as they tend to change instead addresses given by the governments should be used as they are mostly permanent. Plot numbers, bonds, and metes are generally used.
- Land contracts are generally contacted by such buyers who are financially not much stronger and hence it would be best if the amount of down payment is kept a bit less. If this happens, the seller can surely attract more and more buyers to buy the property. The number of land contract homes for sales by owners would increase.
- The possession of the land or the building should be given over to the buyer after the payment of the last installment.
Thus, these were some the things which should be considered while selling homes under land contract. Always try to sign a land contract with reputed and trustworthy sellers otherwise you may be cheated in the payment procedure.
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