Land Contract Add List For Free

As discussed above, a purchase agreement should contain buyer and seller information, a legal description of the property, closing dates, earnest money deposit amounts, contingencies and other important information for the sale.

Disadvantage #1: The title does not automatically pass to the purchaser in a land contract. Disadvantage #2: The seller could be held legally responsible for inspection issues with local or state authorities. Disadvantage #3: Forfeiture of a land contract by the purchaser is a fairly common occurrence.

Generally speaking, land contract agreements must always be formalized into writing and signed by the parties involved. The statute of frauds governs contract agreements and requires any contract involving the sale of land to be in writing.

A land contract is often viewed as a way to "pay down the purchase price" before obtaining a regular mortgage to buy the property outright. Often, the terms of the contract will call for 5-10 years of regular payments, concluding with a balloon payment for the balance of the mortgage.

At a minimum, a land contract should list the address of the real estate and the full legal description of the property, the purchase price, down payment amount, the monthly payment amounts and term, number of payments to be made, and any balloon payment required.

In a traditional land contract, the seller keeps the legal title to the property until the land contract is fully paid off. Meanwhile, the buyer gets equitable title, which enables them to build up equity in the property.

A land contract allows the buyer of a property to use it while the seller continues to retain the deed.For example, suppose Bob buys a property from Jack for $100,000. Using a land contract, Bob agrees to pay Jack in monthly installments of $2,000 over the course of 50 months.