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A land contract is an installment contract
in which the Seller finances the purchase. The Seller maintains the deed until
satisfaction. It is comparable to owner financing. The Buyer gives the Seller a
down payment and the Seller acts as a bank, financing the balance of the
purchase or sale price. The interest rate is negotiated by the parties.
Installment Land Contracts are sometimes
referred to as ILC's or Agreements for Deed. They can be created on or used on
most types of property: Residential, Land Only, Mobile Home with Land,
Commercial, Mixed Use.
During the course of a Land Contract, the Buyer
has possession of and equitable title to the property while the Seller holds
legal title.
If desired, the Buyer may assign and convey
his/her interest in this contract or any part thereof, provided that such
assignment or conveyance shall not impair the Seller's security in the
premises.
Once the contract is in effect and for the
duration thereof, the Buyer is responsible for all taxes and assessments.
The Seller conveys legal title by way of a Deed
to the Buyer when the agreement is satisfied: "...by good and sufficient Grant
Deed, convey[ing] the Premises to Buyer on the conditions herein agreed, free
and clear of any liens or encumbrances other than taxes and assessments for the
current year..."
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