| Using a land contract (or "contract for | | | | salary - but you KNOW that will change |
| deed" or other similar terms) to buy | | | | soon. Just because you are not qualified |
| your home is very much like getting a | | | | for a home loan in the eyes of the bank |
| mortgage loan from a lender and using | | | | doesn't mean you shouldn't be a |
| these funds for your purchase. Some of | | | | homeowner. Many sellers will share this |
| the terminology is slightly different. | | | | point of view. |
| The seller is known as the VENDOR; you, | | | | However, there is an important reason to |
| the buyer, are known as the VENDEE. In | | | | get a new mortgage loan from the bank in |
| this type of transaction, the seller | | | | order to buy your home: they take care |
| vendor makes the final decision about | | | | of many important details for you. These |
| whether or not to make the loan. | | | | matters include ordering the appraisal, |
| Whether you use your own funds and pay | | | | title search, and survey. The bank will |
| cash, or if you borrow the money from a | | | | set up property tax and insurance escrow |
| lender, or if you buy on the installment | | | | funds, do the document preparation and |
| plan (land contract sale) directly from | | | | recording, and perform the closing |
| the seller - you OWN the property! You | | | | itself. |
| do not receive the deed to your property | | | | In fact, although I firmly believe you |
| until you fullly discharge the land | | | | should always retain an attorney to |
| contract, but you do get what is known | | | | review all the documents (banks DO make |
| as equitable title. This form of | | | | mistakes!!) you can probably get by |
| ownership en"titles" you to all of the | | | | without hiring (and paying for) a lawyer |
| rights (like the tax benefits) and | | | | if you buy your home with a financial |
| privileges (like paying the property | | | | institution's assistance. On the other |
| taxes!) that cash buyers get. | | | | hand, if you do choose to buy your home |
| Not having the bank involved in your | | | | using a land contract, retaining a |
| real estate transaction is good in an | | | | qualified REAL ESTATE lawyer is |
| important way. They won't kill your | | | | imperative!! |
| first home deal just because you don't | | | | ======================================= |
| presently meet their standards for | | | | ========================= |
| income and/or amount of down payment | | | | More information on land contracts and |
| available. You may not have much money | | | | other topics of interest to the first |
| saved for a down payment yet, and you | | | | time home buyer is available on the |
| are still earning a relatively small | | | | author's website. |