https://accesstitleagency.com/wp-content/uploads/2021/11/Alicia-Kellogg.jpg 300 240 admin https://accesstitleagency.com/wp-content/uploads/2022/03/acces-title-logolinkedin.jpg admin2022-05-03 18:22:082022-05-03 18:22:08Tips for a Land Contracts:
Tips for a Land Contracts:
- Make sure the Land Contract specifies payment terms – including repayment amount, interest rate, and any late fees charged.
- Payment terms may involve a down payment or a balloon payment.
- Pay attention to default provisions or prepayment clauses.
- The interest rate for a Land Contract cannot exceed 11%.
- The Land Contract should specify the date of possession. Typically, possession occurs at closing, but parties are free to negotiate terms of possession.
- Remember that a Land Contract does not convey legal title to the purchaser, instead the purchaser acquires equitable title with the right of possession.
- Check for a clause requiring the Seller to prepare and convey a deed once the Land Contract is paid in full.
- Once the land contract has been paid in full, the Purchaser is entitled to a deed from the Seller conveying legal title to the property.
- Both parties should confirm whether there are any limits on either parties’ ability to mortgage the property.
- Both the Seller and Purchaser have the right to grant a land contract mortgage.
- Who pays property taxes? Typically, the Purchase is responsible for paying the property taxes on a Land Contract, so the agreement should contain a clause to that effect.
- Land Contract transactions must still comply with State law governing lead paid disclosure and seller disclosures
- As with any other sale of property, a purchase agreement is essential.
- It is always recommended that a Purchaser have the property inspected, regardless of seller disclosures.
- Do not forget to file the necessary Affidavits with the Township Assessors office. That includes:
- Property Transfer Affidavit – required to be filed within 45 days of the transfer of property
- Principal Residence Exemption – if the Purchaser is claiming the property as Principal Residence
- Rescind of Principal Residence – if the Seller had held the property as their Principal Residence prior to the sale