Traditional mortgage loans that loans not secured by any government enterprise have been used in land financing. Land contracts offer a contract financed by the seller as an alternative to these traditional contracts. Land contracts come into working mode when the buyers do not want to approach the bank or any other form of mortgage providers in the deal, this may even happen if the buyer in nor eligible for credit or lacks qualification. Land contracts have seen an accelerated growth for the later reason stated above. Mortgages are so made as to be able to be sold to investor giants in the mortgage market. To serve this purpose mortgages are formed on certain stated rules and structures. A professional and up to the mark land contract has several key features adhered to it, the contract has the precisely stated payment amount in it along with the time period in which it should be paid,the interest rates are minutely defines and also if they should be subjected to any later change that to is mentioned in the contract,the advanced or down payment amount is mentioned too and the most important part of the contract is the price in which the land or property is being sold. Every minute detail is mentioned in the contract giving a clear glimpse into the deal.
As the word suggests a land contract is a legal agreement between two parties legally written with all the terms and conditions of the deal and the purchase of a real estate property. The deal may be for vacant land, a building, a house, any commercial establishment etc.
It is an important and special contractual deal between the buyer and the seller where the buyer does not approach a bank for credit rather the buyer pays the seller directly until the price of the property in question is paid in full. The land contracts have various other names in the market depending on the locality and the availability, they can be called real estate contracts or bonds,memorandums of contract,installment land contracts.
Vendee or the buyer make a contract with the real estate agent or company without approaching any financial institutions. This depends on a number of factors. The seller finances for the buyer with the vendee meeting certain terms and conditions. The seller keeps the entitlements to the property until the buyer pays the sales price in full. It is helpful for the unversed seller as land contracts are based on installment payments.
