Buying first farm questions on farm loan/ land contract

We have been looking for a place and property for a while and finally have decide to buy swmbo's grandmothers farm.. Her father is in charge of her grandmothers estate.. She is still alive and lives with my father in law.. However she is not with it and is declining fast.. There are 8 kids in the family and only swmbo dad had anything to do with the farm and taking care of the mother.. One of the siblings showed interest in buying it, however he wanted to sell off 1/2 of the farm to a mining company so FIL put the kabosh on that. No one else is interested in the farm. FIL said he would tell everyone that we are going to buy it and that we will be meeting with his mothers estate lawyer in two weeks.. I guess here are my main concerns we will be buying 80 acres with about 50 of it tillable currently being rented for corn and beans now.. It has a 40x60 shop an old 2 story farm house that needs redone, large drive threw corn crib and a 40x 80 barn..it also is coming with her grandfathers equipment, 2 row picker plow disc planter and haying equipment as well as a ford 3000& 4000 The property also has four shallow oil wells on it but we are very close to the Utica oil boom in Ohio.. We are getting the mineral rights with it.. We are also getting a very very good deal on the place.. Sorry this is so long but this is my main concern.. We want to get a contract set up quickly because we don't want to miss the opportunity of buying her family farm.. As of now are plan is that it is wrote in contract that we are buying the farm, on land contract starting at 500$ a month until our house is sold and then we can get financed and pay lump sum through farm credit. Does this sound like a logical plan or is there a better way to set this up so that it doesn't slip away.. If anyone has any insight on how to set this up differently id love to hear it..
 
If your FIL has power of attorney for his mother you should be able to write it anyway that you are both comfortable with.I could be wrong on this.

JMHO

Vito
 
You could be in for all kinds of trouble if the farm is not appraised and you do not pay full market value. The IRS and other relatives look unfavorably on this.
 
Might be a bit sneaky, but I'd talk to G-ma and just ask her if she'd sell it to you for a reasonable price. If she says yes, get FIL to handle it and the rest of the family will have to live with it. Good Luck.....
 
I'm no lawyer just a simple dirt farmer, but I think you want a contract drawn up that says you are buying the farm, and you want some money to exchange hands - a down payment. The rest of the the terms can be whatever. You want this signed by whomever legally controls the property.

Since family is involved, you can get into trouble if you are getting a substantially good deal. The govt will think you are avoiding taxes. Disgruntled relatives will be able to use that... Certainly you can get a deal and not top dollar, but beware of trying to steal it....

A lawyer schooled in land could write you up a quick contract that is nice and legal, have the right people sign it, and keep things nice and legal looking. They will run a title search, and handle the paperwork, all for under $1000 typically, and typically split between buyer and seller.

Under your deal, I think that would be money -wisely- spent.

Paul
 
In my state and I'm guessing yours the Grandmother will have to pay taxes upon closeing on the total amount on capitol gains and also possibly some others. What I'm saying is you'll need a lawer to advise you on all the tax consiquinces. I went through this once not long ago and was glad to pay the lawer to advise on all that stuff.
 
Get a lawyer and put EVERYTHING in writing and get it signed with a down payment!! $500 or $1000 should work. Bid a lump sum and do not itemize. List ALL machinery and personal property, mineral rights, current lease(?), that you want possesion immediately,and etc that will be included in the sale. I would work with Farm Credit on your house sale and finance it thru them and not try to work with the relates. When dealing with more than one person, you can have problems. If you need more than the usual 30 days to settle be up front with them but definately get your finances locked in FIRST!! I sold my dad's house 3 times before I got a solid buyer. Todays market are even worse. Good luck!
 
As an attorney who practices in this area my advice would be to hire a local real estate attorney and ASAP have him draft AT LEAST an Offer and Acceptance to Purchase Real Estate (Contract for the Purchase of Real Estate) and it will contain the basic terms which will be followed up by perhaps,,,,,,,,,,,, an Installment Land Sale Contract,,,,,,,, perhaps with a balloon clause,,,,,, or perhaps at some time you will furnish cash in exchange for a warranty deed,,,,,,,,,,,or perhaps the owner will issue you a deed and take back a mortgage and you sign a promissory note,,,,,,,,or TEN DIFFERENT OR OTHER WAYS IT CAN TAKE PLACE...

EACH plan above has advantages and disadvantages and it depends if you're the Seller or Buyer and there are all sorts of ways this can be done THATS WHY YOU NEED TO CONSULT A LOCAL COMPETENT PROFESSIONAL EXPERIENCED ATTORNEY and dont bet the farm and take a big time gamble on whats said by anyone (including myself not knowing the circumstances) here, theres too much at stake here YOU NEED TO CONSULT WITH A PROFESSIONAL ASAP

When I represent a Seller I have no problem going with an UNRECORDED installment land sale contract with a legally permissible default clause but if I represent the Buyer Id prefer a Deed with the owner taking a mortgage and my client signing a note. Note what may be perfect for someone here may BE TOTALLY WRONG FOR YOUR PURPOSES so keep that in mind

HIRE AN ATTORNEY is my best free professional advice

John T Attorney at Law
 
Your FIL is in charge. Whatever plan you come up with probably won't mean squat. The transfer will move along at his pace and on his terms. I know you are anxious but he has got 7 other people to run this idea to first. He will come back with a plan for you in 2 weeks after the lawyer meeting. Don't get pushy but indeed stay connected with him on the matter.

This is my advice after being involved in the almost identical situation.
 
Thanks, I try to give sound advice, may not always be exactly right but Id NEVER knowingly steer a person wrong

Take care n God Bless

John T
 
If you dont mind paperwork and some red tape, you might look into the USDA's "First-time Farm owners" loan. They will finance it 100% with no downpayment. And nnalert.

Contact your counties Farm Service Agency (FSA).

If you are African American, Hispanic, or a Woman, you will have many special privilges under their rules. But a regular guy can still qualify. Contact them.

Gene
 
God Bless you too.

We do not always get a lot of big pleasures in life, so have to count the small ones.
 
Don't forget he said a GOOD local lawyer. A bad one will screw it up so bad the only person that "wins" are the lawyers that paid to straighten up the mess.
 
what gene said, BUT there will likely be a loooong wait between applying and getting the money, IF you are approved. from your description, time may be working against you. at least get a signed purchase offer real soon, so the relatives can't throw a wrench in the spokes.
 
The way I look at it if you have God first then family then your health that pretty well takes care of life......We have been blessed, 42 yrs with the "first wife" raised 3 good kids, retired and RV travel a lot plus have been blessed so far with good health, so I'm a contented happy RICH MAN, wouldn't trade with any Hollywood celebrities and their drug lifestyle for darn sure

Ol John T and all
 
You got that right.

When I bought my sister out on part of the family farm, our attorney botched the deed up so bad I finally wrote it myself. They bought it at the court house, so I guess I did OK. (Actually, I took just enough law in college to be dangerous).

I've since switched attorneys.
 

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