selling a home on land contract questions

[riche]

I have some long term renters moving out on one of my homes and trying to decide to either sell it outright and take the funds to reinvest or sell it land contract to a person I know. House is paid for and worth around 275-290k. If I sell, I will have gains of around 40k and that money to invest in something else. If I sell via land contract, I will have the extra income plus the interest for 20-30 years. Anyone here sold a house via land contract. Pluses/minuses of it.

[grr456]

I bought 2 homes on a land contract when Carter was in office and bank interest rates were at 16% to 17% while the max for land contract was 11%. All I can tell you about it is we both had lawyers at closing and everything went smoothly. I never missed a payment on either loan and when I sold the homes, the owner was there to collect his check. A land contract is a deal between you and the the buyer and you can make up any terms you want. I think the contract said if I missed 2 or 3 payments, he could repossess the home and any improvement. It isn't much different that what the bank contract is. Closing was at a title company and I paid for a title search...

I don't know how the taxes work for the seller, if they are pro-rated or what. But, in both cases it was no muss-no fuss and everything went smoothly...

Just my .02...grr

[Killjoy]

In today's world, the only reason to do LC is usually to pimp people with bad credit out of their money. The only real "legit" scenario is for selling/buying a piece of vacant land that you can't get a mortgage on.

I know several people who own multiple, low cost homes up north and make out like bandits when their LC partners miss a payment and the entire property falls back to them. rinse and repeat... multiple times.

[camaromann]

I would sell outright and avoid any further liability and risk. My grandma sold a place in Houghton lake on LC because the value of the home to what the bank said it was worth wasnt matching up. She had someone approach her on a lc deal and she took it. About 6yrs later he stopped paying and stopped all communication. She drove up there and found everything moved out and a letter addressed to her saying sorry he couldnt afford it any longer. She got lucky I think that the guy just up and vanished. She then lowered the price of the house and sold it outright.