One thought on “Land contract or equivalent I would like to write a land contract to the buyer…”

1. Re: Land contract or equivalent
   NOTE: This communication is not intended as and should not be interpreted as legal advice. Rather, it is intended solely as a general discussion of legal principles. You should not rely on or take action based on this communication without first presenting ALL relevant details to a competent attorney in your jurisdiction and then receiving the attorney’s individualized advice for you. By reading the “Response” to your question or comment, you agree that the opinion expressed is not intended to, nor does it, create any attorney-client relationship, nor does it constitute legal advice to any person reviewing such information, nor will it be considered an attorney-client privileged communication. If you do not agree, then stop right here, and do not read any further.

   RESPONSE: After doing a little research for you this is what I found at http://www.realestateabc.com/answers/landcontract.htm
   which seems fairly accurate:

   Land contracts vary widely from transaction to transaction.

   In most cases, no grant deed is recorded. The buyer rarely obtains a new mortgage loan at the time of purchase. Instead, the new owner makes payments to an intermediary, who then makes payments on the seller’s mortgage, which is still in place.

   Keep in mind that such an agreement usually violates the lender’s guidelines. If the lender becomes aware of a transfer of title on the property (which is why you usually don’t record the grant deed), they can exercise the “due on sale” clause of the note. This would require you to refinance the loan or sell the property. Since many who buy on land contracts have problems qualifying for a mortgage, you can see how this can lead to problems.

   At the same time, lenders generally only check for transfers of title if the loan becomes delinquent.

   Within a certain number of years, it is expected the buyer will be able to qualify for a loan. At that time, they will obtain a new mortgage and pay off whatever amount the land contract requires. Then a grant deed is recorded and full ownership is conveyed.

   Good luck,

   Randall Gilbert

   Randall Gilbert
   Gilbert & Caddy P.A.
   1720 Harrison Street, Penthouse B
   Hollywood, FL 33020

Comments are closed.