5 Advantages of a Land Contract
The total amount of new seller-financed real estate deals in 2020 was $23.57 billion.
Despite the growing popularity of seller financing, many people are reluctant to use it. They claim that the drawbacks of a land contract outweigh its benefits, yet, this isn’t the case.
Read on to discover seven advantages of a land contract.
1. Quick Land Sale
Searching for land buyers is a tedious and time-consuming task. Most people you find can’t afford to pay cash for the land, and it’ll take a long time to apply for a mortgage. Seller financing eliminates all these challenges and helps you sell the land quickly.
To ensure that your land contract has all crucial clauses, seek professional help. The idea is to hire a land contract lawyer to draft the seller financing agreement. The lawyer will educate you more about land contract law and how to enforce the agreement.
2. Flexible Down Payment
With seller financing, there are no government or bank-required minimum down payments. The seller and the buyer negotiate this amount and settle on a figure suitable for both of them. As the buyer, this favors you more as it makes it relatively cheap to acquire land.
3. A Great Investment Opportunity
A land contract gives the seller an opportunity to earn interest by “lending” money to the buyer. In many instances, the interest you earn is high than other investment opportunities. Besides, seller financing creates a stable income stream, as you’ll be receiving payments on a pre-agreed schedule.
4. Faster Closing
One of the drawbacks of using a mortgage to buy land is the lengthy closing process. You’ll have to present countless documents before your mortgage is approved. The bank will also insist on sending over an appraiser to see the land you’re buying.
To avoid all these things and save time, consider a land contract. Since the seller is offering the financing, you can expedite things and close the deal quickly.
5. Low Closing Costs
With seller financing, you don’t pay any bank and appraisal fees. These fees have a huge impact on the cost you incur when buying land. By eliminating them, you lower the land acquisition cost.
So, find resources that educate you more on seller financing options. You want to learn things to check when comparing these land contract options to pick the ideal one for you.
Buy or Sell Land Fast by Using a Land Contract
A land contract eliminates the need to apply for a mortgage, thereby fastening the real estate deal. Also, it lowers the closing costs and expedites the process. As a seller, a land contract offers a great investment opportunity as you earn interest on the money you “lend” to the buyer.
Finally, seller financing offers the buyer a flexible down payment making it cheap to acquire the land.
Please check out our other blogs for more Real Estate, Law, and Attorneys resources.
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