Land Contracts and R.E Contracts - Posted by Todd

Posted by Michael Morrongiello on June 26, 2001 at 18:46:11:

A land contract is like buying or selling a property under a “lay away” plan. If you buy a property under a land contract (agreement for deed, contract for deed,or some other type of installment purchase, etc.) The LEGAL TITLE or ownership of the property stays in name of the seller UNTIL such time that you have fufilled all of the terms and obligations involved in the Land Contract. Then the seller is suppose to deliver LEGAL TITLE to you. This is an area of potential concern if you are buying under a land contract arrangement- how can you be certain to obtain legal title. Also Land Contracts are used as a means to allow a seller or buyer to attempt to circumvent any due on sale clause that might exist in existing financing a property you wish to buy or sell. It is not a foolproof way, but often if the arrangement is to be short term, it can be an effective way to get around the “DOS” due on sale clause…

Many investors like to SELL their properties using a land contract arrangement so that the LEGAL TITLE remains in their names and cannot be easily “clouded” by a buyer who might have judgements, liens, etc. surrounding him/her. Some jurisdications do not require a formal drawn out and expensive “judicial” foreclosure process if you need to enforce the default provisions under a land contract, however many States are now requiring this type of instrument be foreclosed similar to a mortgage instrument.

As for PRO BUYER real estate contracts, you should always be on the lookout for favorable clauses that you can use when “customizing” a contract. Check out Bill Bronchick’s site and and some of his forms among others for ideas, clauses, contracts, etc.

Best of luck and happy hunting,
Michael Morrongiello

Land Contracts and R.E Contracts - Posted by Todd

Posted by Todd on June 26, 2001 at 12:50:27:

Good investing to all! I have two questions to ask. If anyone can answer them I would surely appreciate it.

Q. Can anyone explain to me what land contracts are and how they would benifit we as investors in trying to buy investment propertys.

Q. Can anyone share some advice on where to get some good R.E. contracts and forms that would favor the buyer(ME). I’ve been looking at Carlton Sheets Computer Toolkit and was wondering would that be benificial.


Re: Excellent explanation by Michael… - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on June 26, 2001 at 20:27:47:

Since this question comes up on the board, routinely; about every 48 hours you might also get a lot of information by just reading the posts.

On the second part of your question, the true answer is NO. The land contract is a tailored contract to each transaction and also varies considerably from state to state.

You might have an attorney do one for you in your state and then you could use it for a guide to do your own, specific for your state.