What is a Land Contract? Here is an Answer Provided by An Experienced Land Investor
Land contracts are typically used when a buyer is not willing to get a mortgage through a bank or other institution because of a qualified reason. With a land contract, buyers don’t need mortgage approval. Also, the contract provides great flexibility since the terms can be customized for mutual benefits. A land contract may help sellers sell their land fast, with the potential to take back their property when the buyer defaults per the terms of the contract. Keep on reading to know more about what a land contract is:
It is a Written Contract
A land contract is a written legal agreement signed between parties for the acquisition of a piece of land. Although the buyer gains access to the property, the seller maintains the legal title until the buyer pays off the entire amount.
It is a Self-Financed Alternative to Traditional Mortgage Financing
A land contract is used when the land buyer does not have all the money to buy the property and wants to make payments to the land seller until the property is paid off in full. When the property is paid in full, the title to the property passes to the buyer.
It defines the land acquisition limits and the terms
A land contract defines the limits and the terms by which the land buyer is acquiring the property from the land seller. Because of the difficulty in navigating the world of land of contracts, buyers must make sure the terms of the contract are legally binding should a dispute arise in the future.
It defines When the Buyer Can Take Sole Possession of the Property from The Land Seller
A land contract spells out when the seller can transfer land ownership to the buyer which is when the latter pays it off to completion. Ultimately, the buyer and seller agree on the length of the contract.
It defines How the Land Seller Can Take Back the Property If Land Buyer Defaults on The Terms
The contract will define what constitutes default, the penalties involved, the options of the buyer for bringing the loan current, and the options of the seller when the buyer defaults. The contract offers sellers security because if the buyer fails to make payments based on the terms of the agreement, the seller may be able to recover possession of their property.
A land contract should be executed by a legal professional. For recommendations on legal professionals who are experts in this field, contact the land investors at Checklands.com and they can make recommendations on which legal firms may be a good fit for the services you are seeking.
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