Purchasing land with a land contract

Purchasing land with a land contract

Postby KDB » Wed Mar 18, 2009 8:34 am

My wife and I are currently purchasing property with a Land Contract, where the owner holds the deed until the property is paid in full (about 12 years from now).
Since we do not own the land yet, we can not sign a lease. The land owner can not sign a lease because it would be a breach of contract with us. The contract states under warranties of seller that “…title to the property, free and clear of all liens, leases…”.
What would be the easiest way for us to proceed with a gas lease that would benefit both parties?
The land owner is open and receptive to discussion in regards to this manner.
Thank you.
KDB
 
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Re: Purchasing land with a land contract

Postby snbfarmer » Thu Mar 19, 2009 7:28 am

Can you prepay the contract and are the realistic proceeds from a lease enough to pay the contract in full? Would the seller convert to a regular mortgage if enough is paid down on the existing contract?
snbfarmer
 
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Re: Purchasing land with a land contract

Postby KDB » Thu Mar 19, 2009 9:24 am

Probably not…(to both questions).
The lot is about 5 acres, but sets on the edge of larger lots 20 and 40+ acres.
I thought of drawing a contract (or an amendment to the existing contract) that would (for a term of say 10 years) allow the owner to proceed with a lease agreement on the condition that all proceeds will go towards the principle balance that we owe, up to and not to exceed the balance owed on said property.
This way the land owner can receive payment on the lot much sooner than expected, and we could enjoy having the balance owed paid off much sooner then the original 12 year period.
Any thoughts?
Thank you.
KDB
 
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Re: Purchasing land with a land contract

Postby KDB » Fri Mar 20, 2009 8:21 am

Are there any other members in this situation or is there a precedence to refer to?
If anyone could refer me to a specific person or persons in the coalition that could give me some insight on this, it would be greatly appreciated.
The land owner and I would really like to have this settled before the April meeting coming up.
KDB
 
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