In certain circumstances,
land contracts are an ideal way to complete the real estate transaction. Because this particular arrangement is a kind of seller financing, it does not require a traditional mortgage. Despite the many benefits, there are also several risks for the buyer and the seller. Fortunately, both parties can protect their financial security by hiring attorneys to represent them during the transaction.
How Lawyers Help Sellers
In a land contract sale the seller assumes all the risk that a bank assumes in a mortgaged real estate transaction. Those risks include destruction of collateral, buyer failure to pay and bankruptcy, together with the expense and time in litigation if a buyer default occurs. An attorney can explain these risks to the seller. The attorney can also "fine tune" the land contract documents to minimize these risks
How Attorneys Help Buyers
A land contract buyer needs to know that the seller has good title to convey. An attorney can review and explain the title insurance exceptions to coverage. If items such as liens or a seller mortgage appear, the land contract language needs to be adjusted, and the consent of the lien holder or bank needs to be obtained. It may be appropriate to take still more steps to be sure that land contract payments made to the seller are being applied to the mortgage and the liens. Seller’s failure to make these payments could result in the buyer being foreclosed upon by the seller’s bank or lien holder, even if all land contract payments were made!
If you are considering completing a seller-financed real estate transaction, you can rely on Alan A. Panek Law Office, SC, to help you mitigate potential disputes every step of the way. Based in Wisconsin Rapids, WI, this seasoned lawyer is proud to assist clients in navigating land contracts for both commercial and residential real estate. Visit the firm online to learn more about the quality legal guidance he provides in various practice areas, or call (715) 421-4900 to schedule an initial consultation today.