Land Contract Add Amount Field For Free

Disadvantage #1: The title does not automatically pass to the purchaser in a land contract. Disadvantage #2: The seller could be held legally responsible for inspection issues with local or state authorities. Disadvantage #3: Forfeiture of a land contract by the purchaser is a fairly common occurrence.

The seller on a land contract can enjoy a regular cash flow without the headaches of managing rental property. The seller may be able to realize a greater overall profit from the sale by earning interest. They may charge interest up to 11%. (And, in some cases an even higher rate of interest.)

Setting up a basic land contract is fairly simple if both the buyer and seller agree on the terms of the sale and financing. Agree upon a sale price. Before you begin structuring the land contract, meet with the buyer and agree upon a sale price if you have not done so.

A land contract is often viewed as a way to "pay down the purchase price" before obtaining a regular mortgage to buy the property outright. Often, the terms of the contract will call for 5-10 years of regular payments, concluding with a balloon payment for the balance of the mortgage.

At a minimum, a land contract should list the address of the real estate and the full legal description of the property, the purchase price, down payment amount, the monthly payment amounts and term, number of payments to be made, and any balloon payment required.

Because there's no bank involved, land contract closings can happen in under a weekand without expensive closing costs. Buyers with poor or no credit can get a land contract because it's up to the seller to decide if they're creditworthy.

To calculate the interest payment, multiply the amount financed by the interest rate, and divide the result by the number of installments in a year. For example, the monthly interest payment on a $200,000 land contract home with an 8% interest rate after a 10% down payment would be $1,200.