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Buying Real Estate Through a Land Contract

When considering a land contract, buyers need to carefully assess the seller’s transparency. They should provide answers to even the most basic questions and be accessible via phone or in person. If a seller is in a hurry or gives vague or confusing responses, it may be time to walk away. Also, if they refuse to have a reputable title company conduct a thorough title search and issue an owner’s title insurance policy, this is another red flag that should prompt caution.

Buyers should also take the time to research the property’s zoning designation, as this will determine what types of structures are allowed to be built on the property. For example, the land may be zoned for commercial use, which would prevent it from being used as a home. In addition, it’s a good idea to check the local planning office for any future plans that could affect the land value.

Lastly, IN Land buyer should always get all promises and terms in writing. Verbal assurances are usually meaningless and can be easily contested in court. It’s also a good idea to request references from previous buyers and call them to verify positive experiences.

If a buyer defaults on the land contract, the seller has the option to forfeit the property and keep all money received for the purchase. This is often easier to accomplish than trying to take legal action against the buyer.

Selling a property through a land contract is one of the less expensive ways to sell real estate. However, it can take 6 – 24 months to complete the process depending on market conditions. It’s also important to understand that a seller can lose their home through no fault of their own, which is why it’s critical to thoroughly review the contract before signing. It’s also a good idea for sellers to file a short summary of the land contract, called a memorandum of land contract, with their city and county. This step formalizes the agreement and helps protect the buyer in case of any future disputes or issues.