How to Get a Land Contract
If you're buying or selling land, try to finance the property through an installment purchase contract, known as a land contract.
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Things You'll Need
- Legal Counsellors
- Purchase Agreement
- Tax Services
- Paper And Pencils
- Writing Pens
- Business Plan Software
Instructions
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Agree on a sales price for the property with financing terms that provide a designated number of payments at predetermined intervals at a specific interest rate.
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Realize that in a land contract, the buyer receives the legal deed to the property only after the seller receives most or all of the installment payments.
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Include a clause in the land contract that allows you to prepay the contract amount without penalties. This allows you to improve the property and pay off the loan early or at the time of resale.
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If the seller does not agree to prepayment terms, negotiate a release clause that permits you (the buyer) to subdivide and sell lots while allowing the seller to release the land to the lot buyers and accept the money from lot sales as installment payments.
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Review the terms of a land contract with a real estate attorney or agent before making or accepting any offers.
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Tips & Warnings
Because income from the sale of land is taxed as ordinary income, many sellers prefer receiving payment in installments through a land contract instead of receiving payment in a lump sum.
Seek legal advice about the terms of a land contract to avoid potential problems.
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Comments
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cokelady43
Oct 11, 2007
where do I get a form for land contract sall or see a sample? -
cokelady43
Oct 11, 2007
where do I get a form for land contract sall or see a sample?
