What Home Sellers Need to Know about Land Contracts

142 thoughts on “What Home Sellers Need to Know about Land Contracts

  1. is there any protection against damage to the home?
    that is my biggest fear that they back out and my house is destroyed .
    i’m sure this is a concern for most people.
    you do a land contract and then all the sudden they back out and they take off in the middle of the night and you
    come to inspect the house and find it’s striped of everything and you have no idea where they moved too.
    can you please answer that.
    thank you very much.

    1. Hi Brian: Thanks for your comments. In fact, my next Blog Post will include tips for Land Contract Holders on this very issue. I am writing about verifying that the purchaser is taking care of items such as property insurance, property maintenance, property taxes, and not “committing waste” as you describe in your comment. As they say in sports, sometimes the best offense is a good defense so probably the absolute best way to avoid the problems you describe is to perform proper due diligence on your prospective buyer before accepting the offer and agreeing to sell. Obtain permission to obtain a credit report, verify income, employment, etc. Also, re-read my post on What Home Sellers Need to Know When Selling on a Land Contract. The section about Down Payment is especially pertinent in that it is related to the Purchaser’s commitment to the property, and his/her equity position. If the property value exceeds the amount owed by the purchaser, the purchaser is naturally less likely to damage the property. Usually, the bigger the down payment, the smaller the risk. Questions —  If you have any further questions about selling property on a Land Contract, please Click to Email Allan Daniels or call 248-335-6166. Thanks again!

  2. If a land contract is written up between the buyer and seller, then notarized does that hold up, or should a lawyer be involved? Also, if you do a land contract, can the owner come back and take the house anytime they want?

    1. Thanks for the comment. It is always a good idea to use a competent real estate attorney when drafting a land contract. I have seen people make costly mistakes that may have been avoided if they had used an attorney in the first place. With regard to your second question, there are legal procedures that must be followed in order for the seller (former owner) to regain possession of the property. Again, it is very important that you seek legal advice if a default occurs in order to avoid a “wrongful eviction”.
      Questions — If you have any further questions about selling property on a Land Contract, please Click to Email Allan Daniels or call 248-335-6166. Thanks again!

  3. I am selling my house under a land contract and wanted to find a way to do an amortization schedule with a balloon payment that will allow ajustments for extra payments made.

    1. Hi Frances: Please feel free to call me at 248-335-6166, and I can discuss this with you. There is a great software program that is very inexpensive, or you can do it manually. Thanks! Allan

        1. Hi Charle: I would be happy to discuss this with you, but the software choice will definitely depend upon your needs and your budget. If you are holding (servicing) land contracts, you may also need to be licensed by your state. Please feel free to send me a message or call me at 248-335-6166 to discuss this further. Thanks! Allan

  4. In a legal contract, is there a stipulation in regard to the death of the buyer and their heirs? Can they “will” the property to anyone?

    1. Hi Julie:

      Thank you for your comment. You’ll definitely want to talk to your attorney about a about writing a will or estate plan.

      Please also note that most Land Contracts contain a clause such as this: Interpretation of Contract: The pronouns and relative words herein used are written in the masculine and singular. If, however, more than one person joins in the execution hereof as Seller or Purchaser, or either party be of the feminine sex or a corporation, such words shall be read as if written in plural, feminine or neuter, respectively. The covenants herein shall bind their heirs, devisees, legatees, successors and assigns of the respective parties.

      Please feel free to call me at 248-335-6166 if you have any questions or wish to discuss anything.

      Thanks again!


  5. We bought a home for my son and grandchildren, but it is in our name until it is payed off. Could we do a land contract so his name could also be on it for tax purposes. And if so what all would be involved. Thanks.

    1. Hi Sherry: Thank you for your comment. I would definitely suggest that you consult with your tax advisor and/or estate planning attorney so that you can achieve your goals. Please feel free to call me at 248-335-6166 if you have further questions or wish to discuss anything. Thanks! Allan

  6. Hi Allan,

    Does the bank have the right to call back the loan? If so, what is generally written in the contract to protect both parties if this occurs?


    1. Hi Josh: Thank you for your comment. Would you mind elaborating on your question and explaining how the bank loan is involved in a seller financed transaction? Alternatively, please feel free to call me at 248-335-6166 if you have further questions or wish to discuss anything. Thanks! Allan

  7. If I buy a property on a land contract directly from the seller, how is interest paid reported to the IRS? Do I need to send the seller and the IRS a 1099-INT for the interest the seller is receiving as income and that I am deducting for my taxes?

    1. Hi Adam: Thank you for your comment. Land Contract (and Mortgage) holders typically will send out IRS Form 1098. Please check with your tax advisor for advice applicable to your specific situation. As always, please feel free to call me at 248-335-6166 if you have further questions or wish to discuss anything. Thanks! Allan

  8. I am a buyer in the process of buying a home on a land contract. The sale price is $58,000 and the down payment is $5,800. The terms are 7% interest, 10 years with a $10,000 balloon payment at the end.

    The question I have is what amount do we base the monthly payment and amortization schedule off of???

    Is it $52,200 or $42,200???

    Thanks for anyone’s help in answering this question!!


    1. Hi Chuck:

      If I understand your question correctly, the price is $58,000. If you are paying $5,800 as a down payment, then the remaining balance on that date (amount financed) is $52,200. Please feel free to call me at 248-335-6166 if you have further questions or wish to discuss anything. Thanks! Allan

  9. Hi Alan,
    I am purchasing a home for my nephew as he is unable to get a mortgage on his own. In turn, I’m reselling the home to him on land contract. I’m aware of all the issues & risks in doing this, but I’m unclear on how I should enter these transactions on my taxes. I have no intention on charging him interest or making a profit on this at all — I’m simply going to sell to him for the same price I purchased it for… Any tips?


    1. Hi Deena:

      Thank you so much for your comment. I am glad you are going into this with “eyes wide open” as to the potential risks.

      Sometimes people forget to think about the risk of default (on payments, taxes, or insurance), or the potential complications of employment transitions, health, or marriage/divorce when it comes to selling to family members.

      With regard to the tax issues, I would strongly encourage you to speak to a tax advisor or CPA. One thing to ask is whether interest will be “imputed” by the IRS.

      Please feel free to call me at 248-335-6166 if you have further questions or wish to discuss anything. Thanks! Allan

  10. Hi there I am considering selling my home on a land contract I am not sure what to set the interest rate at. I live in Michigan and not sure what to charge is there a maximum? Thank you, Lisa Sabin

    1. Hi Lisa:

      Thanks so much for your comment and question. The interest rate on a land contract is usually negotiated between the buyer and seller. It is not “set” by the seller. The seller can ask for a certain price, down payment, interest rate, and payment, but unless there a lot of competing buyers, the seller may not receive exactly what is desired. Most states, including Michigan, do have usury laws which set maximum interest rates that can be charged. If you would like more information on interest rates in Michigan, please see the Michigan Statutory Interest Rate Ceilings on the Office of Financial and Insurance Regulation website at http://www.michigan.gov/documents/cis_ofis_ceilings_24956_7.pdf Be aware that the answers provided are not meant to be a substitute for legal advice.

  11. Hello Allen,

    On a land contract if the purchaser fails to pay taxes can I take the property back? If so what is the process?

    Thank you in advance,


    1. Hi Diane:

      Thank you for your comment. The first step would be to read your land contract. The contract should contain language to cover this potential situation as well as others. You’ll also want to make sure that the government has not already taken action to foreclose on the property for non-payment of taxes. One can usually cure this process by paying the taxes. Many land contracts contain language indicating that non-payment of taxes is a default. As a land contract holder, you’ll want to consult with a knowledgeable attorney to discuss how you wish to handle a default. In most instances in Michigan, the attorney will begin the process by sending a forfeiture notice to the purchaser. There are very specific legal requirements relative to the content, timing, and process followed so it is always best that you use a knowledgeable attorney.

      If you have any further questions about your Land Contract, please feel free to call me at 248-335-6166.

  12. Allan

    I am living in a house that was bought on Land contract the buyer left the home and said I could stay there free for just looking after the house I don;t know if they are still paying for it our not. Is there any chance that I could get in trouble for staying in the house If someone should get hurt on the property who would be helt liable for it.

    1. Hi Ruby:

      It may be wise to talk to your insurance agent about liability insurance. You may also wish to have a discussion with the seller and buyer to make sure everyone is on the same page about you staying in the home.



    1. A land contract is a legal document. I strongly suggest that you consult with a knowledgable real estate attorney to assist with the drafting. It is better to spend a little now than risk a costly problem later. Please feel free to call me at 248-335-6166 if you wish to discuss further. Thanks! Allan

  13. First, it is awesome that you have this blog. I recently regained possession of a property after a writ of eviction was served in a land contract forfeiture case. My attorney insists that I cannot sue the defendants for fair mark rent from the time 15 days after the forfeiture notice was served through the date the writ of restitution was served. I have found several court cases that have ruled this is allowed. My attorney says taking this action ( forfeiture ) against the deadbeat buyers was harsh. He says I get the property back and nothing more. He also insists I cannot sue for damages done to the property no matter what they are. I know this is all crap- either my attorney is a clueless moron or he does not agree with this type of action and is not working in my best interest. What do you think ? Can I sure for fair market rent and waste that permanently altered the structure and caused a loss in value ? Thanks !

    1. Hi Eric:

      Thank you for your post. It may be advisable to have a talk with your attorney. Sometimes one law may say something, but another law (or a court decision) “trumps” the prior law. It is also possible that a particular Judge does not interpret the law the way that you interpret it. Your attorney may feel that that the cost of appealing a decision exceeds the amount you could collect by winning the appeal. In any event, you may want to talk over these issues with your attorney to find out more. You can also get a second opinion from another attorney.

      Please feel free to call me at 248-335-6166 if you wish to discuss further.



  14. We are at the end of our land contract and decided we do not want to purchase the property. Realizing we will be losing any money we have paid, can the seller “force” us to purchase the property at the end of the contract or can we just walk away?

    1. In cases like this, I think the best solution is to communicate with the seller. You’ll probably want to discuss the ramifications of walking away with your attorney before you make that choice.

  15. Hi Allan,

    To purchase our new home, we had to turn our original home into a rental. It has actually gone very well but our awesome renters are moving and we are on the hunt for a new renter. We have had a couple inquiries on doing a land contract and I know nothing about it. I owe roughly 76,000 and have about 20 years left on the 30 year loan. It is at 6.75% and I would be happy to just break even. The Monthly payment WE pay now is 740.97 and this includes taxes and insurance. What type of terms should we start with to be sure and break even on the home or should we just keep renting it out for now?


    1. Hi Matt:

      Thank you for visiting the blog and posting your comment. You bring up a couple issues that you’ll want to investigate. First, there may be a “due on sale” clause in your mortgage that will impact your ability to sell the property on a land contract. This means that you will have to payoff the mortgage when you sell the property–even if you sell it via land contract. It is possible that your lender may agree to waive this provision, but you’ll definitely want to make sure you get any waiver in writing. The other issue is a practical one. If you are comfortable renting out the property while property values are rising, you may find that renting now and selling later makes sense for you. I would be happy yo discuss further with you if you like. If so, please feel free to call me at 248-335-6166.



  16. My mother holds a land contract with an individual and this land contract has gone on for longer the 30 years, he has been late on payments on many occasions, late on taxes, and when we consulted an attorney regarding this we were told that we should have taken action when this first occurred, but we were unaware until too late. Now this individual recently had open heart surgery and as a result of complications is medically brain dead. We need to act quickly I feel and resolve this land contract. Does the property revert back to my mother since it has yet to be paid off? What are her options?

    1. Hi Carol: Thanks for posting. I am not aware of any instances where a property sold on land contract (in Michigan) would revert back without a forfeiture action. In some cases, a deed in lieu is a possible alternative, but your purchaser’s mental capacity to sign a valid deed is a big concern. You’ll want to contact a knowledgeable attorney to be sure this is handled properly. Please feel free to contact me at 248-335-6166 if you wish to discuss this. Thanks! Allan

  17. Our daughter purchased a home with us getting the loan in our name. We were advised to set up a land contract so she can be set up for making the payments and use it as her main homestead, as she will be renting out her current home. I contacted our local abstract and title company and they gave me a land contract form to fill out. Do you know if this will be a simple and cheap process to fill out the forms and file them with the title company?

    1. Hi Connie: Thanks for your comment. Before doing anything, you should review every word of the loan documents you signed. First of all, you’ll want to be absolutely certain that you disclosed to the bank that the property will not be your primary residence. The consequences of making false statements on a loan application are very severe. Next, you’ll want to make sure that your loan documents permit you to sell the property without creating a potential default on the loan. If the mortgage contains a “due on sale clause” (standard on nearly all loans for the past quarter century), a land contract sale could trigger a default. You mentioned you were advised to set up a land contract. How qualified is this advisor?

  18. I had a land contract defaulted and defaulter is telling me he can sell my house that I have the title of want to know .

    1. Hi Carl: I am not sure that i understand what you typed since you may have been typing on a phone keyboard, but it looks like your buyer wants to sell the property. Yes, your buyer can indeed sell the property. If the property is sold for cash, the land contract holder is paid off from the seller’s proceeds. Depending upon the language of your land contract, your buyer may also sell on a 2nd land contract or find another buyer to assume the existing land contract. Naturally, any default would have to be cured at closing. I hope this helps! ~ Allan

  19. I am getting a payoff on my LC and, the terms were for 5 years, the purchaser has paid me for 3. His mortgage company said they just need the payoff to my mortgage co, and the amount he owe’s me. We do not need to close this LC at an abstract. They will just send a check to myself and my mortgage company to pay both off. The terms were going to be when the LC was paid off we would finalize the LC and close at an Title Co. How will the Deed be given to the new owner in this manner?

    1. Hi Shelly: Mortgage companies usually require that you close at a title company. If you have not handled land contract payoffs before, you will need to have your attorney prepare the deed and assist with the arrangements to exchange your deed for good funds. While not overly complicated, it’s better to have an experienced professional handle the details unless you, yourself have the knowledge and experience to make sure everything goes smoothly.

  20. I recently leased a home for two years to a couple that would like to buy the property on contract at the termination of their lease. In negotiations for the lease they requested that when it became time to buy on contract they would put no money down because they would have paid two full years of mortgage payments prior to buying on contract. I’m thinking they need to put at least a few percent down and will have a corresponding higher interest rate. Just to give you a little insight, the purchase price will be ~$250,000 and with the two years of lease payments they will have paid $36,000.

    With all that said, how much credit do you give buyers that have made lease payments on time for two years prior to purchasing the house?

    1. Hi Robert: Thank you for the comment. I am a bit confused as to whether you and your tenant already have an agreement, or if you are contemplating an agreement. There are new rules coming in January that will severely restrict seller financing. If you are in Michigan, you may wish to attend an upcoming presentation. ~ Allan

  21. I would appreciate it if someone would tell me if it is legal to sell a home, contract for deed that is paid off with no down payment and no interest. If both parties are in agreement and the contract appears to include everything necessary to make it legal. The property is older, paid for and the asking price is somewhat higher to offset the no down pmt or interest over a term of ten years. Thanks

    1. Hi Terri: Thanks for the comment! I have seen Land Contracts over the years with no down payment and no interest. While only a lawyer can give you an actual legal opinion, you may wish to consider some of the risks. Issues to consider include IRS rules on imputed interest, whether you may wish to ever sell the contract in the future, or whether the lack of interest may affect the timeliness of payments. Please feel free to call me at 248-335-6166 if you wish to discuss further. ~ Allan

  22. HI. We are looking at a house to buy via contract for deed. Our question is is with no equity built up who do we talk to about getting a loan to do the repairs to the house. Is it better to try to talk to a bank or a credit union? Will both not have anything to offer since we dont have anything to borrow against? Then as far as a ballon payment at the end, which the seller has said he doesnt desire, but if we did how does a bank fiance that if the house isnt yet in your name? I have been reading a lot of different information reguarding the contract for deed, all of it very useful…but i have yet to see anything about the repairs issue and how to finance.

    1. Hi Kendra: Generally speaking, if you are buying a fixer-upper via seller-financing, you will be using your own money for the fixing-up. Have you spoken with your bank,credit union, or other mortgage broker/lender about a HUD 203k mortgage loan? That is about the only mortgage product that I know of that provides both acquisition funds and renovation funds. Your other question appears to be about refinancing to pay a balloon payment. Refinancing a home is a very common occurrence. The home can be refinanced to pay off a land contract, a mortgage, or for any other reason that the lender deems valid. The title company handling the closing handles all the details. The land contract or prior mortgage is paid off off with the proceeds from the new loan.

  23. First of all this is an Excellent Blog, thanks!!

    Question: What is a fair percentage for the broker(s) for a Land Contract?
    Should it be just a a “traditional” sale of a property, 6 percent in Michigan ?
    Is that fair, even though as the “Owner” you are not getting the full asking value at closing?

    It seems as though the broker is asking for 6 percent, is that fair and resonable.
    I honestly thought it would be less.

    Thank you in advance for responding…


    1. Hi Marjorie: Thanks for the kind words! Real estate commissions are negotiated between client and the broker. There is no standard commission in Michigan. You may wish to interview a number of brokers to see who you think will do the best job selling your property. I have never regretted paying a commission to a broker since it means the property sold. Ask yourself if you would rather have a low number on a listing contract, or have you property sold. Please feel free to call me at 248-335-6166 if you would like to discuss this further. Thanks again! ~ Allan

  24. Hello
    Are there any legal problems regarding building on vacant property purchased via a land contract if it is included and allowed in the agreement?
    I ask because my husband and I found a piece of land that would appear to suit our needs and may be able to be purchased via a land contract but is vacant. We have livestock that would need fencing and shelters, not to mention a place for us to live. I’ve been doing a lot of reading but haven’t come across this type of information yet.
    Thank you!

    1. Hi Katie: In most cases, a wise seller will require that the buyer payoff the land contract before building, but you will never know unless you ask the question. The language in the land contract will govern, and the language is negotiable just like the price and terms. Allowing the buyer to build prior to paying off adds the risk of construction liens resulting from unpaid labor and materials or the risk of having an unfinished building on the property if things don’t go as planned for the buyer. Thanks! Allan

  25. If My son signed a contract to purchase a home but realized he did not figure an amortization schedule and the amount of interest stated in the contract was figured on a simple interest rate can he ask for the contract to be re figured or is it to late? An Amortization schedule shows paying much less, where as the contract does state he is charging 5.5 percent interest, but the seller stated he did not know how to figure an amortization schedule

    1. Hi Sheri: Your comment exemplifies why I always recommend that buyers and sellers retain professionals to assist them. That being said, a land contract can usually be amended provided that BOTH parties agree to do so.

  26. We are setting up a land contract with a buyer. We will be consulting an attorney as we finalize it, but i would like to know now if we retain liability if someone gets hurt on the property once the contract is signed. I would prefer the buyer purchase the hazard insurance (with us named on the policy) rather than use our policy, unless we still have liability.

    1. Hi Carolyn: Great comment! Also, I am glad you are consulting with your attorney. Too many people are penny wise and dollar foolish when it comes to consulting with an attorney ahead of time. To add in another cliche, an ounce of prevention is worth a pound of cure! With regard to liability, I would suggest consulting with your insurance agent and your attorney to get their opinion, but your preference of having the buyer name you on their policy is how most persons handle this. You may also wish to ask your attorney and insurance agent his/her opinion about an “umbrella” liability policy. Thanks again! Allan

  27. I have a contract for deed that the buyer haven’t paid any property tax. If the buy runs off, who is paying for the tax. What are legal procedure can I take?

    1. Hi Jason: Thanks for your comment. Property taxes (and hazard insurance) are very common concerns with Land Contracts. It is critical that a seller carefully monitor whether the property taxes (and insurance premiums) are being paid in a timely manner. If the taxes are indeed unpaid, the first step would be to read your contract. Most Land Contracts specify that failure to pay property taxes is a default, but you will need to review your land contract to verify this. If the buyer has defaulted, you will want to contact your attorney to handle the default action properly in accordance with all laws. If the buyer does not cure the default, and you end up repossessing the property, you will likely end up having to pay the property taxes since they are a priority lien on the real estate.

  28. Hi, love the post! Quick questions. If the buyer I f a land contract is paying monthly payment of 575. With 173 going into a said escrow to pay taxes and insurance and after a year they find out the taxes haven’t been paid in three years and the insurance is for rental loss protection. What is the buyers rights.

    1. Hi Candice: NOTE: This information is not a substitute for legal advice. If you need legal advice, see a lawyer.
      The first thing to do is to read your land contract. Very often the remedies are spelled out in a professionally prepared land contract. It is also wise to consult with a qualified attorney as soon as possible. Generally speaking, if the buyer is fulfilling his/her obligations under the land contract, the seller should perform his/her obligations as well. If the seller is unwilling or unable to do so, the buyer may have various options including possible legal action for:
      1) Specific performance of the land contract;
      2) Quiet title;
      3) Cancellation of the land contract (seeking the return of the money paid by the buyer in exchange
      for all of the buyer’s rights in the property);
      4) Money damages.

  29. We have had a LC on farmland with buildings, no residence, with my mother in law who passed away during the contract. We were asked by one of the two estate representatives to pay off the LC early to make things easier for the estate proceedings. We refinanced our main home to pay off the LC but came up short on the funds to completely pay it off. Our CPA mentioned we could ask the executor for a discount for asking us to pay off early. The executor says he has never heard of such a thing & mentioned the specialists he questioned had never heard of this either. We were paying it off 15+ years or so early & had an excellent payment history with mother in law. Please let us know if the “early pay off discount” is something to be considered. We were doing the estate a huge favor by doing this, i think there should be some compensation given. Property is located in Michigan. Thank you.

    1. Hi Wendy: It is not unheard for someone to grant a discount, but it is sort of like asking someone for a favor. You can always ask, but they don’t have to say yes. If the contract happens to require a discount for an early payoff, that would be another story. Thanks! Allan

  30. Hello, We just got a house back on Land contract forfeiture. We have realized our worst fears. Our buyer never cleaned, ruined all the bathroom fixtures, carpets, appliances, lost screens, doors are missing, there is animal feces and urine everywhere, including on the walls. She did not use the water softener, so rust has ruined the washer, refrigerator, sinks, etc and there is damage from a burst pipe. Door jams are spit and doors have been kicked in or torn up by dogs. This is a 150 year old farm house, and everything was original and cannot be replaced at the local big box hardware. We paid the insurance on the home with our mortgage, however, the buyer held the policy in her name and we were the additional insured. Can we file a claim on the policy for the damages? We have contacted the insurance company concerning the burst pipe situation, but we don’t know what recourse we have on the rest. She has disappeared. We know she is in a different state. BTW, it took us 6 months to get her out because she was so skilled at evading service. If anyone reading this is considering selling on a land contract, check court records in the countr the potential buyer is currently living. Any previous judgments will be public record. Wish we had checked! Thanks, Suzanne

    1. Hi Suzanne: I am glad you posted on the blog. Your story is indeed a lesson. There are some bad apples out there, and sellers need to realize that there are real risks with seller financing. With regard to the insurance, have you contacted a public adjuster? If you have not sone so, you may wish to contact you personal insurance agent to see if he/she can recommend someone to you. A public adjuster is a person that represents you in an insurance claim. It is important to realize that the insurance company’s adjuster works for the company. Sometimes it pays to have someone on your side, but they don’t work for free. Please feel free to call me at 248-335-6166 if you want to talk further. Thanks, and good luck! Allan

  31. Hello there. My wife an I found our dream home, and did not want to take the chance of letting it pass by, so we purchased it while still owning our current home. We have a buyer interested in buying on contract for 2 years, then at the end of this term, get his own financing to pay off the remainder of the home. I am having trouble wrapping my head around how to go about this. we owe $59,000, but he is purchasing for $64,000. Our monthly Payment, with taxes and insurance is about $450 a month, with a 6.76% interest rate. He is wanting to put $2500 down, then make $500 a month payment. How do I determine what the balloon payment will be at the end of the 2 year period? And does all of what he pays need to go to the loan, or just the standard payment that we pay now? Any help is greatly appreciated.

    1. Hi Adam: You may wish to think about this before acting too fast. Most mortgages since 1986 contain a provision known as a Due on Sale clause. The clause will look something like this: Transfer of the Property or a Beneficial Interest in Borrower. As used in this Section 18, “Interest in the Property” means any legal or beneficial interest in the Property, including, but not limited to, those beneficial interests transferred in a bond for deed, contract for deed, installment sales contract or escrow agreement, the intent of which is the transfer of title by Borrower at a future date to a purchaser.
      If all or any part of the Property or any Interest in the Property is sold or transferred (or if Borrower is not a natural person and a beneficial interest in Borrower is sold or transferred) without Lender’s prior written consent, Lender may require immediate payment in full of all sums secured by this Security Instrument. However, this option shall not be exercised by Lender if such exercise is prohibited by Applicable Law.
      If Lender exercises this option, Lender shall give Borrower notice of acceleration. The notice shall provide a period of not less than 30 days from the date the notice is given in accordance with Section 15 within which Borrower must pay all sums secured by this Security Instrument. If Borrower fails to pay these sums prior to the expiration of this period, Lender may invoke any remedies permitted by this Security Instrument without further notice or demand on Borrower.

  32. Thanks for taking the time to provide such helpful advice. I sold a home on a LC and the vendee now wishes to exit the contract. I’m fine with this as the value of the property has risen since the LC was executed. The contract was not recorded in the country registry but the vendee did file for homestead. What’s the best way to document his voluntary departure to ensure there are no title issues when I resell?

    1. Hi Rick: Thanks for the comment and the kind words! I really appreciate it, and it’s nice to know that people are reading this too! I would suggest that you contact the title company that closed the transaction to have them issue a new title insurance commitment before you take the next step(s). If you think about it, the vendee is conveying (selling) the property back to you so you’ll want to be just as prudent as you would when you acquire any other property. The title company will be able to guide you throughout this, or please feel free to contact me if any questions remain. Thanks again! Allan

  33. I sold my house under land contract (registered with the county) at a loss in 2012. The loss was taken in full on 2012 taxes. A full year of payments were made by the purchaser in 2013 and continuing into 2014. He is paying insurance and taxes. I am still paying principal and interest on a private mortgage (relative) on the house. Confused on what to do with the interest received. How do I handle my principal and interest payments which are a bit less than what I am receiving? Do they offset in anyway?

    1. Hi JR: While I appreciate the comment on this website, you’ll definitely want to discuss this with a professional tax adviser or Certified Public Accountant (CPA).

      1. Is there insurance for buyers of land contracts that will give all equity earned by the buyer to his or her heirs ?

        1. Hi Norbert: Thank you for the comment/question. I am not quite sure if you are asking if the buyer could buy life insurance, but if that is your question, I am sure that your insurance agent can help you apply for life insurance. You may also wish to talk to your attorney about a will or trust. I hope this helps. ~ Allan

  34. Can the seller of a land contract take a loan against the property?? I’m not comfortable if I’m fulfilling my obligations as the buyer and won’t be able to have the title moved to me once I’ve paid the contract. Ive already payed $10,000 of the $30,000 contract. Can I obtain the title if it has a title lien against it or is the seller able to even do this?? The contract has been recorded with county recorders office.

    1. Your question can very probably be answered by reading your land contract. Many land contracts allow for the seller to mortgage the property provided the mortgage balance does not exceed the balance owing on the land contract. All land contracts are negotiated between the buyer and seller, so the time to have the discussion is prior to closing. Here is what a typical clause may say: The Seller may, during the lifetime of this contract, place a mortgage on the Premises, which shall be a lien on the Premises, superior to the rights of the Purchaser, or may continue and renew any existing mortgage thereon, provided that the aggregate amount due on all outstanding mortgages shall not at any time be greater than the unpaid balance of the contract, and provided that the aggregate payments or principal and interest, whether periodic or final, required in any one month in such new or renewal mortgage shall not exceed those named in this contract; nor shall said new or renewal mortgage restrict the time of payments thereon to a date later than is provided for similar payments in this contract. To secure the priority of lien granted to a new or renewal mortgage as provided for in this paragraph, written notice shall be given to the Purchaser within fifteen (15) days of the execution of all such new mortgages and renewal containing the name and address of the mortgage, the rate of interest of such mortgage, the amount and due date of payments and maturity of principal.

  35. Allan

    Why does someone wish to purchase a home under a land contract? My home is for sale with a Realtor, and I am posting it on my FB, and a friend of a friend contacted me and asked if I would consider a land contract. Is it because they do not have good credit? I can see by reading your blog, there are many risks for me. So, I just cannot understand why someone would ask me this?

    1. Hi Tina: Thanks so much for your question. Sometimes a buyer desires a land contract due to a credit issue, and sometimes it’s because of simplicity or lower closing costs. As a seller, it’s your property and your decision to make. Keep in mind that there are many new laws regulating land contracts and all other forms of seller financing. Therefore, in addition to the economic risks, you’ll have regulatory and legal risks to consider. That being said, you can’t fault someone for asking a question, but don’t be afraid to say no to a land contract if that’s how you feel. Thanks again! Allan

  36. Thank you so much for this blog, I have learned alot from it. I was wondering tho , I am selling my home on land contract here in Michigan and I dont see any information about late payments – how much to charge if they are late and then if they do not pay at all how many months does it take of non payment to get the property back?? Again thank you for your answer.

    1. Hi Doreen: Have you already sold your home on a land contract, or are you considering selling on land contract? Once I know the situation, I will be able to address your question more precisely. Thanks! Allan

  37. Hello! This is an extremely helpful website. I’m currently waiting to hear from my lender if they will give me permission to sell my property to my tenants on land contract. One thing I was wondering about is if there would be closing costs involved in this transaction? Does title work have to be done all over again? We refinanced in October 2012. Thank you!

    1. Hi Heather: Thank you for the comment and kind words! A prudent buyer will insist upon title insurance. The seller and buyer can negotiate as to who pays for the title insurance, but as a seller, you’ll want to demonstrate that you own what you are selling. Thanks! Allan

  38. Hi Allan

    I have a question. I drew up a land contract with a clause for forfeiture if the fees were not paid. Several years later after the buyers backed out I’m being sued for the property. I had noticed that on the notarized land contract the purchasers agent had not signed in their behalf. Is there a Michigan land contract law for the omission of signatures?

    1. Hi Amaria: i apologize, but I cannot quite understand your question. Would you mind re-writing it so that it is very clear? Alternatively, please feel free to call me at 248-335-6166. Thanks! Allan

  39. I have a land contract which is to balloon this June 1st 2014. However since the new lender guidelines have made it more challenging for me to complete this balloon within the original time stated. Basically it could take me an additional 24 months to meet govt guidelines as repair credit” post BK in 2008. My mistake was I didn’t have a crystal ball to determine these recent tightened guidelines/lending standards. I need the additional time to cure my equity in my home by making my monthly payments via check vs. cash deposited monthly directly into the buyers acct. This was part of my downfall. The other issue is a discrepancy on my credit file which was part of my BK. These outstanding issues are making it prolonged resolution to my sellers. Can the sellers evict my family we have called our home for 3years making all monthly mortgage payments on time plus any necessary repairs & property improvements- everyone is happy but is their anything I should be aware of if the sellers get antsy? can they call in my note? I need more time to season my credit per the current banking lending standards to correct the discrepancies on my credit file.

    1. Hi Suzy: It is very likely that your land contract is enforceable. You may wish to have a conversation with the sellers to see if you can work it out. Perhaps the seller would be willing to give you an extension. Even if you cannot work it out, at least you’ll know their intentions so you can list and sell the property and also avoid a forfeiture/foreclosure/eviction. Thanks again for the question, and I do hope it works out. Allan

  40. Hi Allan,
    I have a friend who wants to sell his house via Land Contract that he still have mortgage on. If the Buyer for some reason cannot for fill his financial obligation will the Seller be financially and legally responsible to pay the bank the remaining balance on the loan? Or is there a way to structure the Land Contract to release him financially?

    1. Hi Beverly: Your friend will not be released from the debt unless the lender provides a written document release. I am not aware of any lender that will do so. Furthermore, your friend may be risking a default on the mortgage by selling the property without paying off the mortgage. These are HUGE risks. Extreme caution is advised. Thanks! Allan

      1. Thank you Allan for all your info very very helpfull! I have a couple of things to ask. You said there are new laws? Please tell. I am purchasing my home on lc for the past 2+ yrs. I have put in thousands of dollars in repairs and have paid my 1250 per mth at 11% interest on time every single mth! Ballon just became due ,started the steps ,,worked like a fool to clean up my credit. Get to the appraisal part and BAM! that was it! The guy spent 10 min on my property, he came from over 2 hrs away , and his comps??? 4 of the 5 were short sells and reo. Under valued me by about 20,000. I had a local realtor walk through and do a listing app which was almost 30,000 more than the app. What can I do now? I tried to disputeit,,but they send dispute to org app instead of thrid party,,so of course he wasn’t going to admit he was wrong… I’m so stressed,,please help. Thanks

          1. Yes I have now gone through another lender,that appraisal came back 27000 higher than the first one! So that part is good,now I am trying to overcome the challenge that because I made all my payments in cash of proving it wqas me paying it to the bank. Mind you that this is a very well known “online only” mort comp,,they sent a exception letter to underwriters so I’m waiting to see if they approve that, suppose to close tomorrow, praying it works. But my next thing is I have paid 285 per mth just in escrow, about 3400 per yr. As I pay this plus my payment to bank then the bank pays seller and then he is to pay taxes even though home is in my name at county court house. Well I find out he has not paid the tax which was due 07/01 and this comp is about to tack the cost of them paying the taxes unto my loan! What recourse do I have against the seller for not fulling his end,,He lives in CA ,I’m in Mi, I don’t feel its right to have to pay them twice,,but I don’t want to blow the loan over 1100. I feel like he thinks he’s got me stuck.

  41. Hello Allan,

    I’m buying a house on land contract and seller has not paid property taxes in 3 years and I see in public records Forfeiture of real property for three years straight. I also got a letter that stated if taxes weren’t paid by March 31st house is officially foreclosed. On April 9 I searched and seen last Certificate of Forfeiture and the grantor was the seller and Wayne county is the Grantee. Is my land contract still valid? Or will I have to worry about house now going in to public auction for non payment of taxes? I really think its over because the letter said owner has lost all redemption rights if they dont take action. what do you think?

    1. Hi Jenny: Thanks for the comment. The first thing I would do is read the land contract. Does the land contract specify that the seller was supposed to pay the taxes, or did it state that the buyer was to pay the taxes? Also, did you obtain title insurance when you bought the property? Was the closing agent supposed to pay the back taxes at closing? There are a lot of unknowns, and your predicament is a good reason for buyers and sellers to consult with an attorney when buying or selling property.

  42. Hello. My husband and I are considering a land contract with a women who is seperated, but not yet divorced. We are concerned her husband would have some claim to the property. If we enter into contract with her only, can he pose any risk?

    1. Hi Sara: Thank you for the comment. I am unsure, but I am assuming that you are the seller in this transaction. If that is the case, then the answer may vary depending upon the state in which the property is located. I would strongly suggest that you speak with your attorney since this is both a title issue and a fair housing issue.

  43. No questions at the moment. Just wan to say “THANK YOU” for all of this information. I have learned much by reading your blog. Just wish you were closer to Kokomo, Indiana so my search for the best Real Estate Attorney would be short.

  44. I signed a purchase contract to buy a home on land contract 1 week before the closing I discovered the house had cockroaches and now I do not want to close, what could happen to me legally?

    1. Hi Heather: I am sorry to hear about this. Is it safe to assume you spoke with an exterminator to see if the problem can be eliminated, and if so, at what cost? If it turns out that you don’t want to close, you’ll want to read your purchase agreement and have a conversation with your agent and attorney to see if you are at risk of losing your earnest money deposit or being sued for specific performance. Please feel free to contact me if you wish to discus this further. ~ Allan

  45. I am considering doing a contract for deed on my house. Selling it to my son on the contract. My question is if I do this can I use the income from the contract as income to offset my debt to income ratio as I look at purchasing a new house.

    As we still owe on the house but because of a job change will have to move sooner or later. My son is interested in the house buy can not afford the full cost of the mortgage so I was considering doing a contract for deed at a lower amount as long as I can use that as income that will help offset the debt when the banks look at my debt to income ratio when purchasing a new house.

    Any advice would be greatly appreciated.


    1. Hi Pat: You’ll want to contact your prospective mortgage lender to inquire about their underwriting standards. You (and the bank) may also wish to consider how to handle things if your son cannot make the payments in the future. It may seem impossible, but sometimes a health issue or job loss can affect repayment ability. Furthermore, having a contract with a family member can cause added stress on sellers. Thanks for your comment!

  46. Weird???? I purchased a house on a land contract which also includes a lease lot. I can not afford it any longer and quit paying payments 16 months ago. She has not foreclosed. The lot lease is in our name and all the taxes. What should I do at this point.
    How long does she have to foreclose? I want this over with.

  47. If you are currently in a land contract, can the seller, take out a mortage on said property without the buyers knowledge. Thank you.

    1. Hi Cindy: Technically, the buyer would have constructive notice since most mortgages are recorded in the county public records. Most land contracts contain language relative to the seller obtaining a mortgage. You would have to review that section to see how it is worded. I hope this helps. 🙂

  48. I am purchasing 2 acres of land via a written contract for deed. According to our contract, payments were to begin July 1, 2013. When the taxes came due, they verbally gave me an amount (always had excuses for not sending me a copy of the notice, I was assured they had already been paid and I was just paying them back) equal to half of that years taxes and I paid it directly to them. Now I just finally found the right place to look it up they didn’t even pay the taxes for that year. Any advise would be great, I am very new to this. Thank you in advance.

    1. Hi Lori: You may wish to discuss this with the seller to find out the reason for their actions. Regardless of the reason, you may also wish to discuss this with your attorney immediately. Your attorney may suggest an amendment to the land contract to address what happened and to prevent future similar occurrences. Thanks! ~ Allan

  49. WE were selling rentals land contract to a realitor. He died, and his wife gave them back to us. When we tried to get a quick deed, we found there is no executive to his will. How do we get this back in our names? Our lawyer is working on it, but having some problems.

    1. Hi Yvonne: While I am confident your attorney has things under control, you may wish to consider having your lawyer order title insurance for you to make sure that you have clear title when the process is completed.

  50. Hi Allen.
    Thank you for an excellent blog.

    I an considering a LC to sell my house. I still have mortgage with about 50% in equity. The buyer want to put about 20% of the selling price as down payment and payoff in 7 years. He admitted he does not have good credit history and bank will not approve any loan, but he have good income to payoff in time.

    What should I consider as risks, liability and protect me if he not able to come through.

    Thanks in advance for your reply.

    1. Hi Sid: Before doing anything, you should review your mortgage documents. Most mortgages since 1986 contain a due on sale clause. If you do not payoff your mortgage when selling on land contract, you could be violating the terms of the mortgage.

  51. I sold a land contract to the buyer but not close yet and I found out he has income tax lien. Does the government/IRS take the house before the land contract is paid in full if the buyer doesn’t pay it after it is closed?


    1. Hi Jina: I strongly suggest that you discuss this with the title company and your attorney. There are very specific procedures that apply relative to IRS Liens on the buyer. If the procedures are not followed to the letter, there is a possibility of risk to the seller.

  52. Sold house on LC, have a mortgage on it. Buyer does does not do any upkeep. House is filthy,including animal feces. Code enforcement has sent warnings for yard. I have taken over the yard work be cause buyer refused He has been late on payments 4 times this year. He makes the payments directly to mortgage company. Now I have bad credit score. Can I take the house back?

    1. Hi Shelby: First of all, I am sorry this has not gone well for you. You may wish to carefully read your land contract and discuss the situation with your attorney as soon as possible. By the way, did you get your mortgage lender’s permission to sell the home on land contract? Why would you not make the mortgage payments yourself so as to ensure timely payment? Does your land contract include a clause in which the buyer covenants that he/she will maintain the property and not commit waste? Your attorney will advise you as to the best course of action. Good luck, and feel free to contact me if you wish to discuss this. Thanks again! ~ Allan

  53. My son purchased a sm. restaurant the building was in need of work inside and out we fixed up the inside and was getting ready to paint the out side and put our restaurant name up and we are now told we cant do that. She had her lawyer send us a letter that we were breaking the contract the building was in disrepair but she said we cant do anything without the approval in writing and she wont give it to us. is there any thing we can do

    1. Hi Betty: Thanks so much for posting. The best thing to do when you receive a letter from a lawyer is to consult with your lawyer to see what he/she advises. Please feel free to let me know how it turns out. Thanks again! ~ Allan

  54. I am selling my home on land contract. In our land contract it says that we will pay the property taxes and insurance but for the past year now we are having trouble with him making his payments on time and also making his late payments so we are thinking about having his resign a new contract with different terms for being late and to reinforce that date of payment. Is that ok to do?

    1. Hi Hilary: Your comment implies that you have a valid contract, but the buyer is not honoring it. You may want to consider speaking with your attorney regarding this. Your attorney may wish to review the existing contract and explain your options with regard to enforcing the terms of the contract. He/she may also ask you why you think the buyer will honor a new contract if the existing contract was not honored. Please feel free to let us know how it works out. Thanks! Allan

  55. Enough doom and gloom. I have sold my property by land contract. Filed with the county. Payments will be done next month. Do I just need a title company to transfer or do I need more?

    1. Hi Henry: If you are unsure, you may wish to contact the title company that closed the transaction. They may be holding a deed in escrow already, or they may have an attorney on staff that can provide guidance for you. I hope this helps, and thanks for reading and posting!


  56. Hello Mr Daniels great blog! I sold my home to a buyer on a land contract 14 months ago. They could not qualify for financing so I agreed to carry the note on an AITD for 3 years. My underlying deed of trust does contain a due on sale clause but Buyer was aware and not concerned since title was not actually transferred. Buyer felt “confident” they could refinance at the one year mark of ownership. At 11 months into the contract Buyer started the refi process and advised that the home did not appraise for the purchase price we agreed upon. Conversations with local realtors indicated the market had gone up by 7-10% during the year with no recent low sales to have driven the price down. I became concerned the Buyer had modified the property or let it fall into poor condition. I asked to send an inspector and the Buyer refused to grant access to a 3rd party. Since I am an absentee owner living out of state I responded that I would be engaging a property management company to do monthly drive by inspections to ensure that the exterior of the premises appeared in good condition with no code or zoning violations and Buyer threatened to take me to court if anyone even drives by the property. I’m not sure how to proceed. The buyer has ceased even trying to refinance the house to complete the purchase and I believe that I addition to there being maintenance issues I no longer believe the buyer is going to be able to qualify for a mortgage before the contract end date. Do I just have to stand idly by in the dark while they destroy my property (even if continuing to make payments ) for the remaining year and a half or can I do the drive by inspections, get photos of violations and challenge the contract??

    1. Hi Michelle:

      Thank you for the kind words!

      If you don’t mind, I am going to be very blunt. I apologize if it changes your mood.

      It’s possible that I have misunderstood the situation, but your comment appears to indicate that you very likely violated your due on sale clause, yet you are extremely bothered by a situation in which the buyer of the property may not have even defaulted.

      Most due on sale clauses cover transfers of “an interest.” That wording, and interpretations I’ve read about the applicable regulations, make the clause cover not only sales, but also land contracts. Many people erroneously think that because the deed does not change hands in a land-contract sale, it is not a “sale.”

      With regard to the situation with your buyer, while it may be true that he/she did not prepay the contract by refinancing within a year, the contract gives him/her three years to pay in full. Even if the property appraised for Ten Million Dollars, the buyer does not have to pay off the contract until the maturity date. Furthermore, your agitation over this situation appears to have made the buyer feel that he/she is being stalked. You may wish to contact an attorney relative to local anti-stalking laws, the due on sale clause, and to discuss whether any type default has actually occurred under the land contract. Your attorney may advise you to contact the municipality to find out if any violations that might be considered committing waste. Please keep in mind that the buyer will likely have the right to cure any violations (if any exist), and the same right to cure may apply to any other type of default. If no default has occurred, your attorney may suggest that you honor the contracts you signed (both the mortgage with due on sale clause and the land contract).

      Thanks again for the kind words, and I apologize if I misunderstood the situation.


  57. In a land contract forfeiture, where I have a judgment for approximately the entire $10,500 to be paid by December 9, 2015 and the Defendants begin making small installment payments (they are past due $4,500 in payments) I don’t know if I should accept them or if they should put them in escrow to be applied toward the judgment? Does that questions make sense?

    1. Hi Jill: Thanks so much for your comment on the blog. Your question makes sense, and you should discuss this with the attorney who represented you in your court action. Your question also serves to bring up an important discussion point for any land contract holder to discuss with his/her attorney before heading to court. Thanks again! Allan

  58. My wife and I are selling a sfr investment property to our son on a land contract. There is no mortgage on it, and there will be no capital gains to report. Our son wants to use it as an investment property for rental income. Who obtains the hazard insurance? Would he get the policy with us as mortgagee. Who claims the rental income and depreciation on their taxes? We were planning on filing the interest we receive as income on our taxes. Am I correct that he would need to file a 1098?

    1. Hi Jim: Thanks for posting. Most land contracts require the buyer to obtain hazard insurance and list the seller as additional insured. You’ll want to discuss this with your attorney and insurance professional. With regard to the interest received, your tax professional will likely advise you that interest received is income, and you, as the seller, will provide form 1098 to the buyer so it can filed with his taxes. You may want to verify that your tax preparer is familiar with the details sooner rather than later. Thanks again! Allan

  59. Also, one more clarification question:
    From what I was reading in some of the prior posts on this page, is it typical for the seller to let the buyer know their terms?

    I had asked the real estate agent what % the seller would be looking for- they did not give me any type of answer, not even a ballpark of what they would be looking for… So that is why I did the research and that is why we had decided on the 15%.

    I guess I am asking if there is a typical procedure to proceed from here- If the realtor does indeed give them our offer and they decline- Is it in our place as the buyer to try and give a higher down or to ask what the seller is actually looking for in the ballpark % of a down payment?
    Or…if we have already offered a % for a down payment and it is declined, is that the time to give up on that scenario?

    I hope this all makes sense.
    Thank you,
    -Kelly 🙂

    1. Hi Kelly: The nice thing about a land contract is that the buyer and seller can negotiate the terms. You could suggest a face-to-face meeting since it might be more efficient, but sometimes coordinating schedules is difficult to accomplish. In the negotiation you describe, the seller could reject, accept, make a counter-offer, or do nothing. You may also wish to retain a buyer’s agent or an real estate attorney to represent you in this process. Please feel free to call me if you’d like to discuss further. My office phone is 248-335-6166. Thanks! ~ Allan

  60. i have a structured land contract done by a contract title company, if the buyer backs out of the contract and destroys my house is there anything i can do to make the buyer pay for the damage done to my home or am just out the money for the damage to the home and the payments they left oweing me? x

    1. Hi Johnny: I would suggest asking your insurance agent if you are covered for this type of risk, and a call to you attorney may also be worthwhile. Also, why do you think the buyer would destroy his/her own house? Was a threat made to do so? Perhaps I am missing something, but it does not seem logical. What were the economics of the sale? Did you get a down payment? Wouldn’t a logical buyer just sell the home if he/she could no longer afford it? What makes you think it would be destroyed? Sorry for all the questions, and thanks for your comment. ~ Allan

  61. I am purchasing a commercial building on Land Contract that currrently has an outstanding Land Contract balance on it. My contract balance is more than the seller’s outstanding contract balance. How do I protect myself regarding the first Land Contract holder as to the status of the seller’s contract? I will be paying the property taxes directly to city.

    1. Hi Chuck: It is common practice for attorneys to handle commercial transactions, and my first suggestion would be to ask your attorney. In some cases, land contracts are drafted with language that requires the seller to supply proof to the buyer upon request or upon specified periodic intervals. Another option would be to get written authorization from the seller to obtain information directly from the first land contract holder. Still another option is for you make the payment directly to the first land contract holder, but that shifts the risk to the seller, and he/she may be uncomfortable accepting that arrangement. The long and the short of it is that these things are generally discussed as part of the negotiations, and it is best to have a knowledgeable attorney providing advice to you. Best wishes, and thanks for the comment on the blog! ~ Allan

  62. My siblings and I sold our parents home on a land contract, and the buyers are way behind, and late more than 50% of the time. My sister was handling the arrangements, but never followed up with the buyers to enforce late payments, and her spreadsheet give the renters credit for making payments timely even when 2 months late. Can you tell me a good product to utilize and so I can send up to date information to the buyers? And in case we have to evict? I want good documentation. I have written letters letting them know that the contract had not been enforced previously, but as of Nov. of 2015 it would. Also asking that they call if they can’t make payments. Not a word from them yet.

    1. Hi Pat: Who is handling this now? It will be very confusing for the buyers if they receive notices from you and your sister. Have all the siblings agreed as to how this will be handled? Have you considered having a local bank, credit union, or other licensed servicer handle this. If the siblings agree that you will handle, I would suggest that you ask your accountant/tax preparer for a recommendation. That way, if the calculations are ever challenged by the buyers or IRS, your accountant/tax preparer can easily step in to assist you. Thanks for the comment! ~ Allan

  63. Hi Mr Daniels you have a great blog
    When I was merried my husband dt a started selling our house on land contract I didn’t want him to but he talked me into singing the land contract with him he got th we u sent him payments i didn’t get any money from it we are now devorced th he house was granted to me i want to live in it he doesn’t have ownership any more i do can i just tell the buyer that my house is no longer for saile and evict telling them they have 30 days to return my keys or would that be ileggale

    1. Hi Cindy: Thank you for the kind words. Please keep in mind that the buyer has rights under the land contract. Even if the buyer breaches the contract, all local, state, and federal laws must be followed in order to forfeit/foreclose and evict the buyer. You’ll want to consult with an attorney before taking any action on your own that could backfire. Thanks again! ~ Allan

  64. We are taking over an owner’s property and going to give him a down payment and take over the loans. Need a form for a landcontract that allows for underi lying loan to be paid by the Vendee(buyer). Where can I get one of these and what is the title of such a forom

    1. Hi Marti: Your attorney can prepare this form for you. A best practice would be to have him/her review the underlying loan documents to make sure that an assumption is permitted. Thanks! ~ Allan

  65. We purchased a home via land contract last December. We filed paperwork with the county recorder and changed taxes into our name. Our land contract is only for the price of the monthly mortgage (seller wasn’t trying to make a profit, just cover mortgage). We put no money down. There is no end date, the contract simply says we will secure financing when we are able. Since moving in we have found there was black mold (several children under age in the home), the roof was not properly shingled, and every skylight in the house leaks causing the floors to bubble. We are wondering if the home does not pass a VA inspection for us to secure a loan what are we liable for? I hope I have given enough useful information!

    1. Hi Laura: You may wish to read your land contract paperwork, the purchase agreement, sellers disclosure forms, and all other related documents, and then discuss these issues with the seller in an attempt to work things out amicably. Of course, you can also choose to consult with a real estate attorney in your area. Good luck, and I hope everything works out well for all involved — you, the seller, and the mortgage lender. Thanks for the comment! ~ Allan

  66. Hello Allen … My question is I have two properties in Indiana I have sold on contract I live in another state with a $600,000 home that is paid for the two homes on contract require the buyers to carry property and liability insurance in my name if they let their insurance lapse and someone gets hurt on the properties would I be liable or would they be as the buyers

    1. Hi David: Thanks for posting. You pose a good question, and I’d strongly suggest you contact your insurance agent and/or your attorney to discuss your concerns. Thanks again! Allan

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