Livonia, Northville, and Plymouth’s Land Sale Contract Attorney
Residential and Commercial Land Sale Contracts
Land sale contracts are a method of home buying that became popular in the 1970s and early ‘80s because they offered better rates and easier qualification than traditional mortgages. A land contract, which is also called an installment sale contract or contracts for deed, is both a financing instrument and an agreement for the sale of an interest in real property.
Generally, under a land contract, the purchase price is to be paid in installments. Once all the installments are made by the buyer the seller is then obligated to convey proper title to the buyer.
Why are Land Sale Contracts Used?
Land sale contracts are unique real-estate instruments and act as a middle ground between a lease and a conveyance by deed, typically financed through a mortgage.
There are several good reasons why parties may choose a land contract over a traditional mortgage. The most common advantages are that buyers who may not qualify for traditional mortgages can still purchase property. From a seller perspective, they may be able to get higher price for their real-estate offering to finance the property.
Also, sellers, unlike a mortgagee, also have the remedy of forfeiture under the summary proceedings provisions. This allows the seller to retain all payments that were made under the contract, recover the property, and avoid court-ordered sale of the property.
When Should an Attorney Get Involved?
The State of Michigan has not provided sellers or buyers a statutory form for land sale contracts and as such parties are free to negotiate nearly any agreement they see fit. This can often lead to one sided agreements or agreements that do not cover all major issues including:
Does the contract specify the parties, property, cost, number of payments?
Has the buyer obtained a title commitment from the seller?
Should there be limits on either parties right to mortgage the property?
How will property taxes be handled?
Is buyer prohibited from committing waste?
How will property be conveyed after all payments have been made?
Are there prepayment or late payment penalties?
What does the contract say about default including notice and time to cure?
Land contracts can be good alternatives to traditional mortgages especially when the drafter knows the law and takes the steps necessary to protect their clients interest. Matt Devitt Law, PLC will provide a detailed review and anticipate all potential problems and work to avoid them with a well drafted agreement. Matt will also provide seller disclosure, purchase agreement, and lead-based paint disclosure requirement support.
Fixed Fee Value Based Pricing
Matt Devitt Law, PLC is proud to offer fixed value based pricing. With Fixed Fee Value Pricing the price is set before the work begins so that you know how much you can expect to pay ahead of time.
While land contracts are not right for every situation, they can be a good alternative to traditional mortgages in many residential and commercial transactions.
When you need assistance negotiating or executing a land sale contract, we can give you the legal tools, advice and guidance you need. Contact us to arrange a free consultation. You can reach us at (734)-335-0713
Proudly Serving Livonia, Northville, and Plymouth Areas
39111 Six Mile Rd
Livonia, Wayne County 48152