What to Expect
If you'd like to see a property
If you see a property that interests you, let us know. We’ll answer your questions and if you’re ready to take the next step we can arrange for a viewing of the property. You may be asked to provide proof of ID and income to confirm a showing.
Before a signing may be scheduled, buyers will be required to complete a buyer application which requests your financial information, ID and a credit check. The types of documents that you’ll be asked to provide are bank statements, pay stubs, and anything else which proves your income and employment. Self employed applicants are welcome, and government support counts as income – just be sure to be able to provide documentation that proves your income.
You're buying a house, not renting one
When you sign a land contract, you are committing to buying a property over a period of years. Your payments aren’t rent, they’re mostly loan payments including interest. If you pay late, there will also be late fees. Property taxes are also calculated into the monthly payment. After the loan amount is paid off, and no debts remain between parties, you’ll be able to get the deed transferred into your name.
As Is Sales: Choose a property that fits you.
A property is typically sold “as-is”. Whatever state it’s in when you purchase it, is the state you’ll be living and working with. There may be surprise repairs or debts that emerge after your purchase. You can get insurance to protect against repair issues. It’s also the buyer’s responsibility to perform inspections prior to a sale. The seller rarely performs a professional inspection of a property prior to a sale. If a surprise problem arises, don’t expect the seller to repair the property. It becomes your responsibility to maintain the property.
What can you afford?
If your debt to income ratio hovers around 36-42% when you balance your gross income against your monthly debts, it may be the perfect time for you to try a land contract. (debt to income calculators exist online at Zillow and various sites.
If you can afford to make the monthly payments, you may be ready for a land contract home. See how much you can afford with this Zillow Affordablity Calculator.
Signing a Land Contract
After a buyer is approved and terms agreed upon, in writing, then a signing can be scheduled. The down payment must be completed before the land contract is finalized. Often it is made the day of the signing but can be sent to a bank account prior to the signing. Attendees at a signing typically include the buyer, possibly the sales person, a notary and a signing representative for the Seller. Expect various types of documents such as:
- The signature page.
- The payment terms (monthly payments, length of contract, the loan amount, the interest rate, etc.)
- Details regarding what the buyer and seller can and can’t do under the terms of the contract
What happens after the land contract is signed?
After a signing, the buyer is expected to make payments on time and according to the contract terms. But, there will always be questions about the status of a buyer’s account, and more. So following a signing, buyers are provided with contact information and over the life of the contract, the Seller will have representatives available to stay in touch with the buyer. While this is offered as a service, in fact, a buyer is responsible to represent themselves, take care of their property and keep track of their own payment records. The Buyer is typically expected to also get an insurance policy for the property during the first month of ownership. If a buyer does not make their monthly payments or falls too far behind and seems unwilling to make payments, the Seller may seek a cancellation between the parties or a forfeiture in court.