How to Buy a Home With a Leased Land Contract

Many houses can be purchased on a land contract agreement.

Purchasing a home can be a daunting experience. If you have no credit or questionable credit it can become nearly impossible. Purchasing a home through a land contract agreement allows you to "test drive" the house and gives you time to build good credit and qualify for a loan.

Instructions

1. Choose the home you want to purchase. Homes that are for sale by owner are good options, because there is usually some flexibility with terms. Make sure it is in a price range that you can afford and in the area you would like to live in.

2. Approach the homeowner or real estate agent and offer to purchase the home on a land contract agreement.

3. Draw up a land contract. Be sure it includes length of contract, price of home, amount of rent that will apply to a down payment, if any, and a renegotiation clause. Renegotiation should focus on what happens if, at the end of the contract, you fail to qualify for financing. Request that you have first right to renew the land contract for another set amount of time.

4. Pay a real estate attorney to look over the contract and advise you to its legality. Ask him to point out anything that should have been included and wasn't or anything that was in it that shouldn't have been. Adjust the contract according to his advice. Ask him to attend the closing with you.

5. Check with your insurance carrier to determine what type of coverage you should have on a land contract deal. Attend the closing on the appointed day, sign all documents and collect the keys to your new home.

References

• MortgageLoan.com: Benefits and Risks of a Land Contract