Land Contract with Inheritance

Hey Guys,

I’m trying to sell a property, but have been getting some wierd offers on a newly listed property. What do you think of a person wanting to pay $5,000 more for a house on a land contract and will buy it out right within 6 - 12 months with an inheritance (I guess they are in the settlement process)? Can they take a written document about the inheritance to a lender and obtain a mortgage? Any suggestions…

As a Real Estate Investor, every method, every strategy, and every process is fair game when it comes to buying and selling real estate!

This is your property, your in control! Would you be willing to sell your property on a land contract? Do you think $5k over the FMV is a fair premium for agreeing to a land contract? Do you think a land contract with a balloon due in 1 year is reasonable?

Do you think you could ask for an attorney’s letter specifying the substancial inheritance of “Mr. John Doe” could be obtained? Do you think supporting documents could be presented to you supporting the inheritance?

Nothing is wierd in Real Estate where getting creative is the name of the game!

If this is reasonable for you to do? Then get in and go get it done! You can do it!

I believe I’m more of the skeptic when it comes to creativity. If someone is going to receive a large inheritance, why not just wait until it’s there? Would there be proof that they will receive this money? How legitimate is it?

Also, I’m using a realtor and the down payment doesn’t even come close to my closing costs. Then it doesn’t really become a premium, but a current liability. (However, I would have my property sold in this market).

Lastly, if I choose to do the deal, how would I handle my current mortgage on that property? I can’t afford to pay it off, but isn’t that how a land contract works?

You may not have any settlement costs until you transfer title to your buyer. At that time, your buyer has his inheritance and maybe will bring all cash to the settlement table. At the settlement table, you transfer title, receive the balloon due on your contract, and pay off your underlying mortgage. Whatever is left over goes into your pocket.

Just how I see it.

My realtor heard that the settlement will take 6 to 12 months (I’m not sure why that long). So is there a way to make the deal happen now, but wait that long to transfer title? Do you think a lender would lend money to them with proper documentation?

Or would it be better to wait for the next offer? (The property has only been on the market for a few days so far.)

Like Gold River said there are many ways to do it. Think about Lease Optioning to see how well they pay then enter a Land Contract. Herbster


The world is changing and so is the risk involved in doing “creative” deals. Land contracts are a prime example. For example, there is a bill in the Ohio Legislature right now which would make it impossible to evict land contract buyers FOR SIX MONTHS after they stop paying!!! That makes the risk of doing land contracts in Ohio prohibitive in my opinion, unless you get a HUGE downpayment. Furthermore, most land contract buyers (and lease-option buyers) never buy the property. The reason that this person wants to buy via land contract is that their credit and current cash position won’t allow them to buy a property with a conventional mortgage. In other words, they are a subprime buyer who has a very high risk of not following through.

To answer your question directly, YES - it would be great for you if you could get $5K more than the asking price for doing a land contract. The key word here is IF! Does this “buyer” have a significant downpayment to give you? Does he have a written statement from an attorney detailing the amount of money he will receive? What happens if ‘something comes up’ during probate and he doesn’t get as much as he thought? What happens if ‘something comes up’ and he spends the inheritance on something other than buying your house (like a boat, fancy car, motorcycle, etc)? Things that are shiney have a way of attracting sub-prime people and affecting their judgment.

If you’re considering selling your home via land contract to this person, I would screen them like any other tenant, because that’s exactly what they’re going to end up being. At least that way you’ll know who they are and just how bad their credit is.

Good Luck,