Land Contract

[spearmint]

Still deciding whether to give up present home. If I do, attorney suggested I might be able to find a house to rent on land contract and buy it after BK. Any ideas where I can look online to find land contract homes? I looked on realtor.com with no luck.

[StartingOver08]

The homes on Realtor.com do not indicate which ones are available via land contract. Sometimes agents will use the term Contract for Deed or Agreement for Deed, all three terms have the same meaning. You need to speak to an agent that is familiar with the concept, and they should be able to show you quite a few homes that fit your citeria. The land contract is much more viable than it has been in the recent past. If an agent says they don't know what one is or its illegal, find another agent! LOL

[spearmint]

I didn't realize there were lots of them out there. It does seem like a good idea if I can just find one I like. My present home is nice but I am upside down about 30K or more and if I could find a nice house with an option to buy it may be a good idea to release my present home.

May be I will call a few realtors tomorrow.

[spearmint]

The only risk with land contract, I think, is if I rent with option to buy at the end of five years, the owner could change his or her mind in the five years!!!

[deadbroke99]

Also the owner could file bankruptcy and you could lose the house that way too.

[spearmint]

Hmmm, true!

[StartingOver08]

Spearment, your home is upside down by $30k - but what is the actual market value? What I am getting at is $30k 1% upside down or 30% upside down - that may make a difference on whether you should keep the home.

[spearmint]

A few years ago it was worth 170K but now it's worth about 120K - in fact, I saw one for sale this week for 100K.

[StartingOver08]

Well, I see your point. There are land contracts, but of course not a huge selection - because many people pulled equity out of their homes after they purchased them. One of the things you would want to make sure of is the amount of the current mortgage on any home you are considering. There is a risk that the owner could default during the term of your land contract which is a problem for you. The default is less likely on a smaller mortgage since presumably your payment would result in a net income to the seller, not a net deficit.

[spearmint]

Good idea. How would I go about finding out what a seller may owe?

[StartingOver08]

I am a Realtor. Here in our database we have the public record filings of the mortgages, so when we are researching properties to show, one of the resources is to check the recorded mortgages. (Most mortgages are recorded, occassionally a mortgage is missed, but that is rare). Your agent should be able to do the same thing. We eliminate the unsuitable properties that way.

Since the records are public, I suppose you could do it yourself by checking the on line recordings by address/owner name. It is a little more cumbersome that way, but certainly possible.

[spearmint]

I am a Realtor. Here in our database we have the public record filings of the mortgages, so when we are researching properties to show, one of the resources is to check the recorded mortgages. (Most mortgages are recorded, occassionally a mortgage is missed, but that is rare). Your agent should be able to do the same thing. We eliminate the unsuitable properties that way.

Since the records are public, I suppose you could do it yourself by checking the on line recordings by address/owner name. It is a little more cumbersome that way, but certainly possible.

I know how to check the property records here but I don't believe it tells you how much is owed.

[StartingOver08]

In our area you can put in an address or an owner name in the Clerks office and find out all the recorded mtgs against the property. Of course, it does not tell you the current balance, but it will tell you the originating balance, the date, terms (in fact you see the entire mortgage). Like I said, it is a little cumbersome without the databases we have access to - but then again we pay to access those databases. The agents in your area must have something similar.

BTW, you can also see if there are other liens filed against the property.

[Mi Bankruptcy]

My question, if the owner sold the house on a L.C. and then defaulted in BK. Would the buyer (L.C) be able to put a lein on the property? I don't know much about leins etc? If the house did end up in BK you may be able to finance it for cheaper than what it was sold to you.

[spearmint]

MI BK - I was wondering the very same thing.

(I am in MI, too.)