2007-01-19 07:56:41 · 5 answers · asked by Lucinda1 1 in Business & Finance ➔ Renting & Real Estate
It is a legal contract in which the buyer pays in accordance with an agreement for the purchase of property. When the buyer has completed all the payments, a deed is completed giving the buyer ownership of the property.
Until the contract is completed successfully, the seller retains the right to ownership. They may not sell it of encumber it as Long as the buyer meets the requirements of the agreement.
This is often used when the buyer has little or no down-payment and the selling is willing to carry the loan.
One important note. Should the buyer fail to complete payment or fail to follow the contract, the property can revert to the seller and the buyer will lose all monies paid in.
2007-01-19 08:07:03 · answer #1 · answered by united9198 7 · 0⤊ 0⤋
A land contract is a contract between the buyer and a private seller of a property, wherein the seller holds the title or deed to the property until all agreed upon payments have been made in full. This property may be improved or unimproved, vacant, or a home or a commercial building. With a land contract, a down payment is usually made, then equal monthly installments are paid until the property is paid for or until a balloon payment is required. A balloon payment is a lump sum of money that is due at a specified time, in this case at the end of the course of monthly payments.
2007-01-19 08:02:03 · answer #2 · answered by muttbob 2 · 0⤊ 0⤋
Varies a little from state to state. The classic one is a formal contract recorded in the county stating the terms and conditions of who is buying, selling, payment amount and legal descrition as well as the terms under which the contract will be completed and the property conveyed to the new owner by warranty deed.
When the contract is fulfilled, the property is deeded over.
2007-01-19 08:00:47 · answer #3 · answered by wizjp 7 · 0⤊ 0⤋
a land contract works like any other contract. You & the other party agree on some transaction to occur by a future date for a specified amount of money.
In your case, it's to buy or sell land.
2007-01-19 08:02:30 · answer #4 · answered by Anonymous · 0⤊ 1⤋
A land contract is a mortgage funded by the current owner.Check your state for the correct legal "Contract for Deed" Make sure the property is unincumbered.(in other words make sure the current owner has clear title)
2007-01-19 08:02:22 · answer #5 · answered by Anonymous · 0⤊ 1⤋