Sunday, May 9, 2010

My landlord wants to sell me the rental I live in on land contract?

If I purchase it this year on land contract 100% owner Financing Can I get the rebate crdit for purchasing a new home if no bank loans.


A land contract does convey ownership but only after the property is fully paid off. Make sure if you do a land contract that you get a title insurance policy, that your land contract is a recorded document, and that you or a third party pays the taxes.

If the seller does not own the property "free and clear" that creates major problems. First the sellers lender will most like call (acceleration clause) the loan if they find out if the property has been sold. Second, is that if the seller doesn't make the payments to his lender the property would be foreclosed on and you would lose everything. This is inspite that you make the payments to the seller in good faith. Often in these types of sales contracts when the seller stills owes money the parties hire a third party note collection service to collect the monthly payments and taxes from you, then pays the sellers lender directly, and gives the seller the rest.

The big scam with land contracts is that the seller can keep selling the same property over and over again. If you have title insurance and you have the contract recorded it makes it harder to for the seller to commit fraud.

Also, with a land contract your seller doesn't have to go through a foreclosure process. If you default he can just file a paper with the county recorder declaring a default and resell the property again. Just like a repo on a car or personal property.

My advise, is not do it, the risks are very high for fraud and there is little legal protection for you. Consult your attorney.

you should be able to get it... if you are a first time home buyer.... But you should really watch out buying on contract. you should get a lawyer to look at the conttract before you sign it... Landlords rip people off and charge high interest when they sell on contract. Just be careful

NO. A land contract doesn't transfer ownership. It is a "lease with an option to buy".

READ BELOW:

An agreement between a buyer and seller of property in which the buyer makes payments toward full ownership (as with a mortgage), but in a land contract, the title or deed is held by the owner until the full payment is made. This type of contract is technically not a legally binding agreement and, therefore, many different types of payment formats can be found.

As in a standard mortgage, there is an agreed upon price and payment schedule, but the payments are often not amortized evenly, so that a large balloon payment may be required to complete the purchase. Also known as an installment purchase contract or an installment sale agreement.

Investopedia Says:

A land contract can be thought of as a "lease with an option to buy". Certain states have more generous legal rights for land contract holders than others. As a result, the world of land contracts can be difficult to navigate. As such, a land contract buyer must be very careful to ensure that the terms of the contract are legally binding in case a dispute arises in the future.

Land contracts are often used by purchasers that would not otherwise qualify for a mortgage, or by investors who wish to complete a purchase faster than a regular mortgage would allow.

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