Many people have taken quite a financial beating in these rough economic times. There have in the past been similar conditions, and so these will come and go as well. Just as before, those wanting to buy a home are finding that land contracts will be the ideal way to go right now.
These contracts really simplify the process of purchasing a house by cutting out the middle-man. The seller is also the financier and so the bank gets left out of the equation altogether. A formal contract is drawn up, signed by both parties, and filed with the appropriate local or state agency. While not required that attorneys be involved or present, it is wise for each side to obtain legal counsel in order to protect their own best interests.
Many believe that these are the same as rent to own programs. There is actually a rather larger difference. In programs that advertise a lease to own option, they are actually similar to leasing programs for cars.
The renting deals usually involve a normal, standard lease on the property. There is then expected that at the end of said leasing term the renter will purchase the property through a conventional mortgage. Some are kind enough to apply a portion of the rent and deposit towards the down payment and closing costs of the sale.
With the most sophisticated Land contracts, the seller is in fact the financier. The real difference between this and a traditional mortgage is the lending institution. It is usually filed with the proper agency so the house is legally the responsibility of the buyer.
Land contracts may mean the difference between continuing to rent, and being able to own a home for many people. Given the more stringent guidelines of many lenders, there are many people that now will not qualify for a conventional loan. For those people, this is an alternative that is well worth the time it takes to look into it.
For the best advice on Land Contract investing, visit USA Property Investor, then read their FREE ‘Land Contract Investment Guide’ here.
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