So I have a buyer willing to buy some vacant land on a land contract, but I’m unsure of all the aspects of this contract. Here are some of my questions:
- Do I have to file this contract with the courthouse (I heard it is better in my interest not to do it, but why is that?)?
- How do we handle the taxes? (Do they pay me, I make the tax payments, and then show them the receipts?)
- What if they default on the property? What steps do I take? Is it easier to foreclose on them?
- Do I have to show an annual statement to the buyer showing them their principal reduction and interest accumulation?
- Do I need to have the signatures notarized?
Any thoughts would be grateful.
check your state’s codes on this. every state is different.
Where do I begin to look for/at the state’s code? Are there any pro/cons for not doing it?
if u do not do some things that u r supposed to by following the law it is not generally a good thing. :shocked
go to google and search for ‘(state name) land contract’, be sure the website u hit is actually the state site. if u r not sure u might want to find a local attorney that is familar with land contracts in ur state
Forget all the hassles, have an attorney do it for you. One that specialises in real estate. Herbster
We do land contracts in many states and hopefully this helps:
- If you not want to file the actual contract, file a memorandum of agreement to show your buyer that there is an agreement in place. I would also suggest for you to file the promissory note.
- Since title won’t transfer until they pay you off, the tax bill will still go to you. So its best you escrow for taxes.
- If they default, its best to hire an attorney to file for the eviction/ejection of the buyer. Unless they have 20% equity then you would have to foreclose.
- You can print the buyer an amortization schedule for his knowledge.
- Always have the paperwork notarized.