How to File a Land Contract

A land contract is an alternative to a conventional mortgage.
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A land contract is an agreement between a buyer and a seller for the purchase of property at a set price. The buyer and seller agree to the purchase price, down payment and monthly payments, with the seller essentially giving a loan to the buyer. Land contracts end in a balloon payment with the buyer paying the balance owed at the end of the contract term.

Buying Property with a Land Contract

Once a buyer finds a piece of property, several things will need to be agreed upon between the buyer and seller in order to use a land contract. The purchase price, down payment, monthly payment amount and balloon payment amount will all be a part of the land contract. The date when the contract begins and ends must also be in the agreement, as well as the legal names of the people responsible for payment.

Documents Needed for a Land Contract

The buyer’s responsibilities prior to signing a land contract include getting an appraisal report from the seller or having an appraisal done. This is to ensure that the selling price reflects the value of the home. The buyer will also need a title company to provide title to the property and title insurance. Sellers should request a credit report from the buyer as well as proof of homeowner’s insurance.

Preparing the Land Contract

Once the terms are agreed upon between the buyer and seller, the seller must then obtain a land contract form. These forms can be found online, at a county clerk’s office or from an attorney. An attorney will help each party understand the language of the contract, draft the agreement and witness the signing. The forms can also be filled out by the seller according to the terms and signed by each party in the presence of a notary.

Filing the Land Contract

The land contract must be filed with the county registrar of deeds in order to make it a matter of public record. In most cases land contracts can be submitted by mail with the appropriate fees or in person at the registrar of deeds office during regularly scheduled business hours. If the two parties use an attorney, the filing is done by the attorney’s office as the final step in the land contract process.

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