Anyone a realtor?

I'm drafting an offer to purchase for a potential Land Contract - Seller becomes my bank.

The offer form says "If Buyer is using multiple loan sources or obtaining a construction loan or land contract financing, describe at lines 165-172 or 435-442 or in an addendum attached per line 434."

I'm looking for the correct verbage, you see :happy: Can anyone kick off how to word that section? Without making up words like "Verbage"? :happy:

The more of this I can fill out in advance, the less time my lawyer has to spend on it and the more $$ I save So, I'd appreciate any input.

I'm the buyer... hence the reason I'm drafting the Offer to Purchase.

I am not obtaining bank financing. I will be paying the homeowner, who retains title. It's... a Land Contract

Not at all *LOL* Do you know what a land contract is?

http://homebuying.about.com/od/financingadvice/qt/LandContracts.htm

in a nutshell...

or are you talking about a Vendor Take Back Mortgage


What Does Vendor Take-Back Mortgage Mean?
A type of mortgage in which the seller offers to lend funds to the buyer to help facilitate the purchase of the property.

No.... It's closer to a Rent-to-Own Scenario but... much different. :bigsmile:

Not at all *LOL* Do you know what a land contract is?

http://homebuying.about.com/od/financingadvice/qt/LandContracts.htm

in a nutshell...

I think I know what it is .. but I have no experience with one. I don't even know anyone who as ever even done that. I'm sorry, I don't think I can help you.

I have only ever seen Vendor Take Back mortgages. I wondered though, how do you insure a house like that? It doesn't really fit into the criteria of a rental unit, and you don't own it .. So how do you insure it?

The buyer is to obtain homeowners insurance. The Vendor is no longer responsible for the home or any damage to it upon close of the sale (there is an actual closing at a title company... it's remarkably similar to a real purchase, but... not.)

Not at all *LOL* Do you know what a land contract is?

http://homebuying.about.com/od/financingadvice/qt/LandContracts.htm

in a nutshell...

I think I know what it is .. but I have no experience with one. I don't even know anyone who as ever even done that. I'm sorry, I don't think I can help you.

I have only ever seen Vendor Take Back mortgages. I wondered though, how do you insure a house like that? It doesn't really fit into the criteria of a rental unit, and you don't own it .. So how do you insure it?

The buyer is to obtain homeowners insurance. The Vendor is no longer responsible for the home or any damage to it upon close of the sale (there is an actual closing at a title company... it's remarkably similar to a real purchase, but... not.)

Hmmm, Curious

I always had the understanding you can not insure what you don't own due to repercussions in the event of a total right off, or if premiums are defaulted which may coincide with a filed claim. This has really got me curious. Is there special circumstance insurance for this kind of thing?

Sorry to kinda get off the subject.

No! This is good! It makes ME think about all the ins-and outs and things to ask my lawyer actually!!

OK, I don't know how this works for others, but here's my particular case and how it's working:

There is no mortgage on the home. It is owned free and clear by the seller. The payments I make to the seller instead of a bank with the exact same amortization schedule with a 3 year balloon (I need to refinance with a REAL bank at that time). This is what I mean in that "the seller becomes my bank." I am lucky in that I don't fear for HIS financial security, making the house a more secure purchase to me.

However, the land contract is actually what you use in place of the actual deed in the meantime - That is enough for the homeowners insurance as well as tax filings (I claim the interest I pay and property taxes, etc. on my income taxes - not him).

Other than the actual title of transfer (which may or may not happen at the front end - up to what you negotiate), it works much like a normal purchase.