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FAQ

The higher the interest rate, the less of the monthly payments go toward paying the balance owed. Interest rates for land contracts vary, and some do not charge interest at all. Interest rates cannot exceed 11% for most Michigan land contracts.

MCL 600.5726. If there is a default (buyer fails to pay the installments due under the contact or breaches the contract), seller may seek to retake the possession of the property through the forfeiture process. First, the seller must serve a written notice of the forfeiture upon the buyer.

A land contract is an agreement between a buyer and seller pertaining to a specific tract of land. Developers advertise and sell tracts of land similar to the process of selling a real estate property. Land contracts can be broad in scope and may include both the land and real estate on the land.

A balloon payment is an unusually large payment due at the end of the purchase period. The parties will also agree on the interest rate. However, in Michigan the interest rate cannot be above 11%. It is possible for the interest rate to change over time, but the average interest rate has to be 11% or less.