Land Contracts for investment properties

By Investor Forms

***Please note, anything on this site does NOT represent legal advice. You should consult a licensed attorney before signing any documents (or sending them out to clients).

What should a typical articles of incorporation document include?

Create your own Land Contract here

What is a Land Contract? It is also called a Contract for Deed or Seller financing. It is a contract to purchase real property (real estate). The seller keeps the deed/title for the property until the buyer makes payments and pays off the total amount. The purchaser can immediately possess the property, but the deed (transfer of title) doesn’t happen until they paid the agreed amount.

A Contract for Deed is useful when a buyer is unable to obtain financing other than seller financing.

What is needed on the document?

  • The parties which the agreement is between

  • The consideration which is the exchange of goods - this is going to be property for payments

  • The total amount and the adress of the property being exchanged

  • What are the payment terms, monthly, and what are the amounts and when is it due

  • How much is interest and how is it computed (interest first then principle applied)

  • Who is responsible for property taxes going forward - typically the Purchaser

  • Who has to pay for insurance and is responsible for the sellers property

  • Personal property of the purchaser is not insured by the seller and is not liable.

  • The purchaser should have their own insurance for personal items

  • The Seller is not liable for anything on the property, and carries no insurance. The purchaser should have all insurance to cover the house just as if they owned it. This includes property damage and liability insurance

  • The purchaseer must give a copy of the insurance certificate as well

  • If the purchaser doesn’t do something in the agreement, the seller gives a notice of default with 14 days to fix the issue. If they fail to fix it, the entire note becomes due, otherwise the agreement terminates

  • If the purchaser does default, they must vacant the property within X number of days or obtain possession of the property

  • If the purchaser defaults, they also loose any payments made, and possible damages for the seller to take the property back. This includes any sort of deposits as well, don’t default!

  • There is a clause saying the seller is allowed to recover damages, so if the purchaser doesn’t fulfull the obligations of the contract and causes some sort of harm to the proeprty, you will be sued

  • The seller can re-instate this agreement if he wants after everything is taken care of. This is solely based on the seller wanting to