LAND CONTRACTS GONE BAD

Thought I would share in regard to the other post on land contracts. I have seen a few go bad. Early 70's a shyster sold a place to a couple, they made payments on it for the best part of the term. Well it mysteriously burnt and was insured in the shysters name. He collected payments, insurance and resold it!!! Same guy acted as a purchace agent on some land, he had the deed put in his name as he was a front man for a would be company. It all fell apart and guess who owned the land!!! Next was the one where the buyer paid some up front money to an elderly couple. Cut all the timber, hauled massive amounts of metal off said land and sold all the top soil and did all three very fast. HE THEN DEFAULTED AND WALKED!!! Have also seen issues were someone died and the buyer was left out to dry so to say.

I would NEVER consider a land contract under ANY circumstances as either buyer or seller.

Dean

done right it's a good deal for the buyer and the seller,

We bought our 80 acres that way 15 years ago and it worked perfect for all involved. We made reasonable payments, the owner realized smaller gains for tax purposes for 10 years. Don't be cheap; get an attorney who knows what he is doing and a good contract (no decent contract would allow logging, stripping buildings, etc.), and there shouldn't be any issues.

Agree. Hire an attorney that has a background in such matters. Know the laws in your state in regards to defaulting on payment and payment of property taxes. Land
contracts have helped many young farmers get started when the bank would not talk to them. In regards to the OP there was a farmer that sold some ground around 15
years ago using a land contract and he told his buddies he was hoping that the guy would default to get the ground back plus the money paid. Has not happened yet.

You can put anything in a contract but a crook that works fast can wipe you out before a suit to enforce the contract ever hits the courts.Land has a deed and a vehicle has a title for
a lot of good reasons.

A contract isn't worth the paper it's written on if the purchaser files chapter 12 bankruptcy. Saw a lot of sellers get burned bad in the 1980's by farmers filing chapter 12.

And I'll bet in all those cases, Jocco, the sellers saved a couple hundred bucks and did all the paperwork themselves. "One who acts as his own attorney has a fool for client."

I've put together dozens of land contracts over the years, and none of the horror stories set forth here has occurred. Yes, there have been defaults, but forfeiture of a land contract is cheaper and faster than foreclosure of a note and mortgage or deed of trust. Again, no problems.

For those who get themselves into these situations, I'm reminded of the famous quote from John Wayne: "Life is hard. It's harder if you're stupid."

have 4 I am holding as of now always works and helps a lot of young people get started

Just one more reason to consult a trained professional real estate attorney and DO NOT hang your hat or bet the farm on ANYTHING posted here lay or even professional. I bought and sold several farms using land contracts and drafted a bunch for clients BUT THEY ARE DIFFERENT IF IM WORKING FOR THE SELLER OR THE BUYER. They are used farrrrrrr less nowadays as compared to 20 years ago. If I'm the Seller I don't mind a contract and I don't want it or anything recorded or escrow. If I'm the buyer I prefer escrow, a deed,and give the seller a promissory note.

They ARE worth the paper they are written on as the law of contracts is very well settled and next oldest after property law. Theres a ton of old wives tales out there regarding land contracts, some true many false

Consult an attorney for anything so risky and expensive or else bear the risk !!!!!!!!!!

John T BSEE,JD Attorney at Law

"but forfeiture of a land contract is cheaper and faster than foreclosure of a note and mortgage or deed of trust. Again, no problems. "

A big AMEN to that counsellor I AGREE

John T

Yes sir on the first 2 the guy was a know shyster!!! The 3rd one took advantage of the elderly to make money Gave them a good song and dance and when it was over "he had no assets in his name" The last one a young fellow was buying the land old guy died and his family had other ideas!!!

John: bear in mind these cases happened in the past. I was fallowing up on a post in one of the other forums. In my area it is also called "owner finance" I am not a big fan of it!! and yes one should use a lawyer in there state.

I have bought a few pieces of ground on land contracts, and thank God they are paid off. I do know from my own experience that it can go great, or south over night. I bought one from an investor who bought 40 acres across the road from my house then sold it to me less than ten days later. He knew I was going to buy it and stepped in with cash and I lost out. I had to pay him 10 grand above what he paid for owning it a week. He deeded the property over to me, but held a lien on it for the amount owed. He was a slim ball and I was glad to get him paid off. He told me that on a land contract if the buyer has paid over 50% of the value of the contract and then defaults he can argue to a judge that he owns the bigger share of the property, and the contract holder can not take it back for a missed payment. Then it is up to the court to decide who keeps the land. I am not sure if this is strait, but this guy knew his way around the court system. I never slept very well, and ALWAYS had bad dreams about my land being taken away because of some little trivial thing. I awoke many nights in a sweat. These dreams stopped as soon as the land was paid off. I have had land contracts, but always felt uneasy. Its just a easy tool to use if you don't have much up front money. /// I have had two contract holders who just called one day and said they wanted to be cashed out ,, NOW! Each time I was able to get them paid, but I am sure I took years off my life from the worrying. Each guy looked like a very nice person in the beginning, and I always paid on time and sent Christmas cards, and even stopped by to let them know how the season was going. When you owe someone money, they think they own you. I almost think each guy thought he could somehow take the land back after all the payments I had made. This was when land was gaining value by the month. I did buy when the land was low. I still would do it again if some land comes available, but would use a good attorney that knows land contracts. YOU always line him up, and YOU ALWAYS pay him. That way the contract will be on YOUR side, not written to protect the seller only. Al

My wife's Mom, 2 sisters and 1 brother inherited a land contract their Dad had set up on the farm near Butterfield Minnesota. The brother was the executor, so he had most dealings with the 'buyer'. They ended up getting it back twice-each time Mom complained louder than before! I told her, if you dont like it dont sell on contract. They finally sold it conventional, end of her complaining!
My Dads brother in law bought his family farm back from his uncle, near Fairbury Nebraska, on land contract. He paid it off early and you could hear his uncle whining all the way to Omaha! He lost out on all that interest...! Contract said nothing about that not being allowed!