Indiana Land for Sale on Contract
4 Tips for Buying Land on Contract
Buying wooded property, hunting land or Indiana farmland on contract can be accomplished when the buyer and seller agree to some pretty simple terms and requirements. Typically a buyer puts a down payment on the real estate of X% and the seller of the land becomes “the bank.”
The seller finances the remaining balance of the agreed upon purchase price, a certain interest rate and any other terms including default, possession, taxes, insurance, etc. Land contracts can vary in terms of length, amortization as well as other details such as closing costs, title and survey. The general rule of thumb though, is that the seller carries the loan for a fixed number of years, earning interest from the “contract sale” and at the end of the term a balloon payment (purchase balance due) is made to pay off the land in full.
Prior to entering into a contract sale, it is advisable to have an attorney or real estate broker review the contract. Land contracts in Indiana could have special challenges, and every buyer should take full consideration of every item in a legally binding contract.
Remember that the “legal title” to the farm, wooded property or land remains with the seller until the buyer makes the final payment. Once payment has been made in full and the conditions of the land for sale on contract are met, then the deed will be transferred, filed and recorded in the new owners name. Remember that you may incur closing costs & fees with this deed and should plan accordingly with the land contract.
As a buyer, defaulting on a payment or series of payment on a land contract can result in legal action and the forfeiture of the land and all money paid. In other words, if the buyer fails to pay, the seller keeps all money received, plus the seller keeps the land real estate.
Only certain sellers will entertain selling land in Indiana on contract. Work with a land broker & real estate agency that has relationships with landowners that understand the pros and cons of contract sales and who are well-versed in creating win-win scenarios for the buyer and seller.
Since 1977 we have helped buyers and sellers learn about the process of purchasing a parcel or tract of real estate on a contract. Many of our most satisfied clients started by asking us, “What is a land contract?” and “How does it work?” Several of the farms, wooded hunting properties and development land parcels we have for sale can be purchased on an installment land contract. For more information call us direct at 765-427-1619