I’ve been getting a lot of questions lately about specific issues regarding to land. I thought I would share so everyone could benefit.
QUESTION:
Hello everyone,
I am planning on purchasing a couple of plots of lands.
In the future, I will either sell off as the area develops or develop myself for leisure.
For one of these lots, I am planning on using the owner-financing that they are offering.
Here is my very newbie questions:
Who would write out this agreement?
How do I make sure the land belongs to me as long as I make payments?
I know these are some very basic questions but with such a small cost on the plots, it seems silly to involve an agent. I just dont know anything about purchasing real estate yet.
Answer: Great question. Typically, the seller will have you sign a promissory note, purchase sale agreement and either a land contract or a deed of trust (which they provide). With a land contract, you have to insist that they record it with the County so there is a record that as long as you are making payments you own the property. A deed of trust, places a lien on the property, but your seller transfers ownership into your name which gives you the assurances that while you are making payments, the property is in your name and recorded with the county. Once you pay off your note, the seller removes the lien on the property. Also, I would advise that within the agreement, the seller guarantees the property is free and clear of all liens and encumbrances. Plus, at the end of your payment term they will pay for your title insurance in your name.
