| Advantages of Land Contracts for the | | | | not have this expense when you buy on a Land |
| buyer:Buying property using a land contract may | | | | Contract. If the seller feels she needs a higher |
| benefit you if you have a difficult time finding | | | | yield, she should have insisted on a higher interest |
| bank financing due to credit problems or have | | | | rate when you were negotiating your purchase |
| non-traditional income sources. In that case, | | | | agreement.Advantages of Land Contracts for the |
| without the use of a Land Contract, buying your | | | | seller:A Land Contract allows the seller to make |
| home would be much more difficult.Won't your | | | | additional money on the financing of the sale of |
| income and savings, crucial aspects of your | | | | their property, collecting not only the purchase |
| financial status, and your ability to handle more | | | | amount but also the interest on the principal |
| debt (a mortgage loan) increase in the coming | | | | balance. By acting as the bank in the property |
| years? Of course they will! But a lender bases its | | | | transaction, she gets to make the profit as the |
| decision on what you make NOW, and what you | | | | bank "normally" would.Selling a home on Land |
| have saved NOW. Many individual sellers, on the | | | | Contract when you have an underlying mortgage |
| other hand, will recognize that your financial future | | | | loan is a time-honored method of profiting in the |
| is indeed bright.Many of the usual closing costs are | | | | residential real estate market. The Land Contract |
| eliminated when you use a Land Contract to | | | | payment will usually far exceed the mortgage loan |
| complete your real estate sales transaction. | | | | payment amount, due to appreciation.When a |
| Purchasing a title insurance policy for the lender is | | | | home is sold using a Land Contract, the seller |
| not an applicable cost when there is no bank | | | | retains ownership rights. She can pledge the |
| involvment in the transaction.Also, you probably | | | | equity in the home as collateral, or even get a |
| don't need to pay for a new survey if you are | | | | bank loan in the amount of the principal |
| buying a home in an established, platted | | | | balance.There are considerable advantages of land |
| subdivision. There is no need for an appraisal, | | | | contracts for both the buyer and seller when a |
| either. You and the seller have already agreed | | | | Land Contract is used to convey the property. |
| upon the value of the home. Neither of you are | | | | Another factor that can benefit both buyer and |
| concerned anymore about the prices that | | | | seller is the fact that the sale can be closed |
| comparable homes have sold for in the area.The | | | | tremendously faster. It is not unusual for a Land |
| single biggest closing cost is usually the discount | | | | Contract transaction to be closed within a few |
| points charged by the bank to increase its yield, | | | | weeks of the final signing of the sales agreement. |
| or its profit from the interest on the loan. You will | | | | |