Land Contracts/Installment Deeds | Real Estate | Tressler & Associates
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land contract

Land Contracts/Installment Deeds

While many real estate buyers finance their purchases through the use of mortgages, this is not the only option available. One alternative to this is a land contract, also commonly referred to as an installment deed. As with anything related to real estate contracts, these can be complicated. Whether you’re a buyer or a seller involved with a land contract, you have a lot at stake and want to be sure you have the proper guidance and a contract that contains all the property provisions. If you’re considering a land contract to buy or sell real estate, you need an experienced real estate attorney.

At Tressler & Associates, we provide various real estate law services to help you during this major transaction. Our real estate attorneys can help you set up a land contract that protects your best interests.

What is a Land Contract?

A land contract or installment deed is a method of financing a real estate purchase. Unlike mortgages, these are seller-financed. These can be used to purchase any type of real estate. When the buyer and seller agree to a land contract, the buyer pays the seller directly for the price of the property and interest, rather than a third party, such as a bank. Land contracts state the sales price, the amount of the down payment, the terms of the installment payments, the responsibilities of both parties, and more.

The seller retains the legal title to the property until the buyer has fully paid for it. The buyer has an equitable title and interest in the property while paying the seller, meaning that the seller cannot do something that would interfere with the buyer’s interest, such as sell the property to someone else. As with a mortgage, the buyer can still live in the property and use it while they are making payments.

Benefits of Land Contracts

Land contracts can provide benefits to buyers and sellers that they wouldn’t receive through a traditional mortgage. Of course, land contracts are only beneficial in certain circumstances, so they won’t work for everyone.

It’s Easier for Buyers to Get Financing

While a mortgage is the most common way of financing a real estate purchase, it’s not an option for everyone. For many reasons, such as bad credit, buyers may not be able to qualify for the mortgage they need, but this doesn’t have to stop them from buying real estate. Seller financing, such as land contracts, makes it possible to buy real estate without a mortgage or third-party lender. This means that more people can invest in real estate.

Sellers May Negotiate for a Higher Price

Of course, sellers want to know that they’ll get something out of this arrangement as well. In some cases, sellers may be able to negotiate to sell their property for higher than their initial asking price in exchange for financing the buyer’s purchase. Since seller-financed purchases are not the norm, buyers may feel more willing to pay extra for sellers who agree to a land contract. In general, land contracts can offer more flexibility than a traditional mortgage and allow sellers to get terms and conditions that work for them.

Have a Real Estate Attorney Create your Land Contract

While land contracts can be beneficial for buyers and sellers, they can also be risky. What happens if the buyer stops making payments? What happens if the seller is still paying their mortgage for the property and defaults? There are many complications that can arise when you have a land contract, but a real estate attorney can help protect you. With the help of a real estate attorney, you can ensure your land contract contains the terms and conditions it needs and has processes in place should something happen.

At Tressler & Associates, we can help make buying and selling real estate as easy as it can be for you. Contact us today for help throughout this process.


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