Land Contract

Financing, Hard Money Lenders, Private Money
1

Hello All,

I am currently working on selling a piece of vacant land on a land contract. I’m not really sure how to do this, do you have any advice? Here are some of my questions:

  1. What interest do I charge? (I was thinking 8% for 10 years.)
  2. Where would I find a form to make this legitimate and should I record this?
  3. I am only asking $15,000 and they are going to put $1,000 down.

Should I look into any other options? Any help is appreciated. Thank you!

2

Check with a title co and tell them you are wanting to sell a piece of land w/owner financing, and do they have the paperwork to make it happen. You may have to call several title co’s to get one that can help. Try not to let them talk u into title insurance either. If that all fails, u might want to find a local RE attorney that can help. It will be a little pricey. If you don’t want to go that route, check your local state ordinances for what the state minimum is required to be written in a land contract and then make one yourself. That one may get a little sticky as if the right info is not in it or worded correctly you can have issues later, especially if your buyer has any other issues with you. I would suggest the attorney route.

If your state does not require your land contracts to be recorded, I would not record it. If your state DOES require your contracts be recorded, u can go to the county courthouse or the website and get copies of recorded land contracts and compare what is in them and make up your own.

as far as interest, you need to check to see if your state has a maximum rate you can charge. usually 10% is good for a land contract but u need to check your states codes for this too.

IMO I would try to get more than $1000 down but that is your choice what to ask for. When there is more $$$ in they are less likely to default or split when the chips are down.

BTW 10 years seems really long for this, is there a particular reason for doing it for so long?

3

Thank you so much for the info. I am selling this piece to a neighbor and they really don’t have much as a down payment or flexibility monthly installments. So, unfortunatley, I don’t have much room to move with these terms. I would love to have it in a one lump sum, but I would have to find another buyer and the property wouldn’t be that valuable to anyone else.

Basically, this is a horrible thought, but if I can work out this deal, make some money on the side, have someone else take care of the lawn, and if they default I will get it back, I will be no worse than where I am at now. Please don’t get me wrong, I want them to have the property.

4

Yes, you can structure your land contract for 10 years with 8% interest. ( we actually structure ours for 15 years at 10% interest). You may want to retain an attorney to make sure your contract complies with your State and it has all the protections for you.