Land contract terms: An example
A land contract, also known as a contract for deed or installment land contract, is a type of real estate agreement in which the seller provides financing to the buyer to purchase the property. The buyer takes possession of the property immediately, but makes payments to the seller over a specified period of time. The following is an example of land contract terms for a residential property:
Property description: 123 Main Street, Anytown, USA
Purchase price: $200,000
Down payment: $20,000
Financing amount: $180,000
Interest rate: 5%
Term: 5 years
Monthly payment: $3,387.22
Due date: 1st of each month
Late fee: 5% of the payment amount
Terms and conditions:
1. The seller agrees to sell the property to the buyer and provide financing for the purchase, subject to the terms and conditions of this contract.
2. The buyer agrees to make a down payment of $20,000, with the financing amount of $180,000 to be paid over a period of 5 years at an interest rate of 5% per annum.
3. The monthly payment of $3,387.22 is due on the 1st of each month. Failure to make a payment by the due date will result in a late fee of 5% of the payment amount.
4. The buyer agrees to maintain the property in good condition and repair, and to pay all property taxes and insurance.
5. The seller retains the right of forfeiture if the buyer fails to make payments, or if the property is not maintained or insured as required.
6. Upon completion of all payments, the seller agrees to transfer ownership of the property to the buyer, free and clear of any liens or encumbrances.
7. The buyer acknowledges that this is a binding legal agreement, and agrees to comply with all terms and conditions set forth in this contract.
In conclusion, land contract terms can vary depending on the specific details of the property and the agreement between the buyer and seller. It is important to have a thorough understanding of the terms and conditions before entering into a land contract agreement.