Land buyers are going to be more interested in a property that’s in the right location than one that’s more far-flung. For example, a buyer looking to build up a housing development might be more interested in land that’s near the Kansas City metro area, as the houses built on that land will be more likely to attract buyers, especially buyers who work in the metro area.
Land contracts are useful instruments for sellers who are selling a home and contemplating carrying the financing for a buyer. It gives sellers a built-in income and generally a better interest rate than rates offered on money market accounts or certificates of deposit. However, a prudent seller should take steps to protect equity and ensure the buyer can fulfill the terms of the land contract.
Real estate agents typically charge a 4% to 6% commission on the sale price, so selling without an agent could certainly save you big bucks. Even after you pay $1,000 or so for your own online ads, open-house brochures, and a lawn sign, you would still probably clear an extra $14,000 on a $300,000 sale, $24,000 on a $500,000 sale, or $36,500 on a $750,000 sale.
Carefully research information regarding the price and terms of sales in today’s real estate market. Investigate recent sale prices of properties similar to yours in your immediate area. Know the property lot size, current tax information, and relevant property disclosure laws. Then establish a realistic price for your property based on that information.
An attorney’s office or a title company can prepare closing documents for a land contract sale, but only the parties themselves or an attorney can prepare the actual land contract document and land contract memorandum. It is important to keep copies of all documents involved in closing on a land contract to verify required filings are performed and to protect each party’s interests in the sale.
The land contract is its own legal agreement or contract, with all the terms and conditions agreed to between the buyer and seller. At a minimum, a land contract should list the address of the real estate and the full legal description of the property, the purchase price, down payment amount, the monthly payment amounts and term, number of payments to be made, and any balloon payment required. Attaching an amortization schedule to show the exact payoff schedule of applying the monthly payments to the total purchase price is helpful.
At the showing, make sure valuables and other confidential items are put away so the potential buyers are free to walk around. Try and keep the number of people in the house to a minimum. Give them some time and space to look around on their own, but be available for questions. Gather receipts for heating costs, taxes, past repairs, or renovations; buyers interested in the house will want to know these details.
Each approach has it’s pros and cons – and it does take more hassle to close it yourself rather than using a title company or closing attorney… so these are definitely things to keep in mind if you decide to go this route. You’ll definitely save money by doing an in-house closing, but it’s also a bit more complicated and time-consuming to handle everything yourself.
While it can take some work to find out what some people want, that’s just not the case with homebuyers. They aren’t going to play their cards close to the chest or make you guess about what they’re looking for. No, homebuyers are an upfront bunch. They know what they want, and if a house doesn’t deliver, they’ll let someone know — just watch an episode of House Hunters if you don’t believe us.
Advertise your property is for sale. Be sure to include location, price, dimensions and any other information that could add value to the land. For example, if your land has a lake view or beach access, it is important to mention that on the listing as well. Advertising mediums such as newspapers, television, signage or the Internet can be used to promote the sale of your property.
When deeds are drafted as a part of a land sale, they have to be recorded to become a matter of the public record and protect the buyer's ownership rights. It is customary for buyers to pay for the cost of recording -- after all, it's the buyer that benefits from having his interest in the property entered in the public record. However, this custom isn't always the case, and some areas assign the fee to the seller, or to both parties equally.
Disclaimer: Please be aware that I am not an attorney and the information in this article should not be interpreted as legal advice. Every state has different laws and every real estate transaction has unique variables that can affect these standard documents listed below. Even though these are the exact steps & documentation that I use in my closings – don't assume that this information is fully applicable to your situation. Before you act on anything described below, be sure to consult with an attorney or legal professional in your area to confirm you're following the right steps and procedure.
Hi Esther – if I were in your position, I would let the bank and/or title company handle the closing. They know these procedures inside and out, and with the closing costs involved, it usually makes more sense to let the professionals handle it… especially if you aren’t planning to do a lot of these “self-closings” on an ongoing basis (as a business).
I requested a quote 13 days ago & I accept the fact that you are back logged & it could take up to 14 days to get a written response. I just hope that you seriously consider our property for purchase. It really is a great lot. We had plans 13yrs ago to build a house with a walkout basement & even add a pole barn to the property. Times change, situations change & we've been trying to sell this since 2008. I'll keep my fingers crossed & hope that I hear a response with an offer very soon. I appreciate that you look at every property & realize it might take a little longer than 2 weeks to hear something. Thank you very much for your consideration. Amy