[lewiston]

I'm considering selling my farm via a land contract. Hoping to get advice on "norms" on the items below asked in the contract. Property is $400,000.
1. Downpayment percent.
2. Monthly payments.
3. Balloon payment time frame.
4. Who pays taxes and insurance.
5. How research buyer's credit record.
6. Any other advice for a seller.

Thank You

[Fr_Chuck]

1. down payment is the real issue, since land contacts ( while not always) are normally done to people who can't get normal credit and often don't have money.

So it is always best to want to get 20 percent down, but some are done at no down payment and a lot are done at 10 percent.

2. payments are considered at the interest rate determined at what a normal long term loan would be, often based on 20 year loan.

3. ballon note time, what ever you both agree, I have seen 3 year, 5 year and 10 year. Many many don't ballon but merely are to be paid for the life of the note.

4. you are still the owner, deed does not transfer so you need to keep your own property insurance, which is higher since this is still considered as a rental property for insurance purpose.
They carry their own insurance on perosnal property, and may even carry property insurance to cover their interest of the value of the home.

Taxes are part of a "deal" they are still in your name and normally are merely a add on that you put on the monthly payment to cover that.

5. you run a credit check on them, available form dozens of online companies.

6. expect to take it back I sell dozens of properies by contract and have for years. I would say that about 70 percent or so get taken back when the buyers fail to pay.
so be sure there is protection that the contract turns to rental if they become in default. You need to be able to get them out.

Get enough down payment to cover them ruining all the carpet, holes in the walls and windows busted out.
I have had to chase down my appliances that were sold by buyers to used shops and more.
Assume the worst will happen, so are you prepared for it, and have enough down payment to cover it happening.