Land Contract
A land contract is a financing contract between a seller and buyer of real estate. It is a legally binding contract under which the seller, also referred to as the vendor, agrees to finance a portion of the purchase price for the purchaser. With a land contract arrangement, the purchaser takes possession of the property and becomes the owner in equity, but the seller retains legal title to secure the outstanding balance until the purchase price is paid in full.
Information Contained in a Land Contract
The terms and provisions of a land contract are legally binding. The specific terms of a land contract will vary depending upon the circumstances of each transaction, and it is not possible to address them all in this article. But some of the basic matters to be addressed include the proper identification of the parties; a full and accurate legal description of the property; the purchase price, down payment, and interest rate; the length of the contract term and the amortization period; any balloon payment requirement; and whether the contract can be prepaid without a penalty. Continue reading
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In a past Estate Planning post I discussed how beneficiary designations can be an effective tool to avoid Probate upon death. As a Wisconsin Estate Planning Attorney I often use a type of beneficiary designation to pass a home or other real estate to a person’s family members when that person dies. This beneficiary designation is established with a properly drafted Transfer on Death Deed, also known as a TOD Deed. A TOD Deed allows the owner of real property to execute a deed during his or her lifetime, which names the beneficiary or beneficiaries who will receive title to the property upon the owner’s death. This allows the real estate to be transferred to the beneficiaries without them having to go through the probate process. 