Realty One Group West
Colleen Morrill, Realty One Group WestPhone: (949) 735-8318
Email: [email protected]

How Sellers Can Benefit From Land Contracts

by Colleen Morrill 11/28/2021

A land contract is a type of seller financing that has many benefits both for buyer and seller. In a land contract, the seller provides credit instead of a lender or bank. The buyer makes their regular payments to the seller directly. Once the total price is paid in full, the seller gives the buyer the title to the property. Land contracts are like rent-to-own agreements, but have even more advantages for the seller. Here are some of the key benefits:

More Potential Buyers

One of the biggest benefits of a land contract for buyers is that they are easier to qualify for than loans from other sources. For the seller, this means a much larger group of potential customers. Credit checks and employment verification steps required by banks and other lenders are optional with land contracts. Even if the buyer has poor credit, a low score is not a deal-breaker.

While land contracts open up opportunity to more buyers, they also simplify the sale process by removing the need for a third party. There are no mortgage lenders or banks in the transaction, which can make things simpler and quicker. This also means that sellers don’t have to deal with the traditional home selling obstacles like appraisals, checking the title and more. However, all this means that requirements for qualification are per seller discretion. This can have enormous benefits but still present some risk.

Seller Still Owns the Property

The seller owns the land contract property until the agreed upon purchase price is paid off. During that time, you have the same rights as any other property owner would when renting, such as the option to evict a buyer if they stop making payments. If the buyer cannot complete the buying process, the seller still keeps the property and can do whatever they want with it at that point. Sellers have the freedom to put the property back up for sale traditionally, try another land contract or keep it off the market entirely. Overall, land contracts provide some built-in freedom and peace of mind for sellers despite the potential risks.

Land contracts have many benefits for sellers and buyers alike. However, there are always disadvantages to consider. Consult a real estate professional or an attorney to determine if this type of seller financing is right for you.

About the Author
Author

Colleen Morrill

Helping you achieve your Real Estate goals with the knowledge and understanding that only years of experience can provide. I'll be here for you throughout the whole process of selling and/or buying always keeping your best interest as my top priority. My focus is not on quantity of sales, but on top quality service and care for every client I serve. Serving in the Real Estate business most of my life, I take great pleasure in helping people move into different phases of life when it comes to Real Estate ownership. I've had the privilege of helping repeat clients plus their families and friends and I look forward to helping you. If you are considering a move or just have questions, I look forward to hearing from you. I'd be honored to put my real estate experience to work for you.