HELP!!! Land Contract Gone Wrong?!!

[James David Powell]

My hope is that the title rings the ears of one credible person, or maybe two—the more the merrier!

Without further ado . . . .

I essentially acquired a $150,000.00 residential home in the market for $25,000.00. I waited for all the houses to sell in my area, until my property was the last of three left. Even then, prospects were low-balling me. (The house needed everything literally, EVERYTHING. Still, even with all that needed done, it was a good deal.)

Anyway, I ended up selling it through a land contract. The person(s) under contract is capable of doing their own work and has made improvements to my property since our agreement (and, to let you all know, I’m still missing our written contract). It seemed like a good idea at the time, for various reasons.

Terms:

$500.00 after signing contract (which, I received)

EMD of $3000.00 (that is unsatisfied, because the home isn't "financeable")

Monthly payment of $850.00 (in so far as, they haven’t paid two months of, in 6 months. Going on 7 months now)

18 month “close date“ (ugh, that is all I’ve wanted since I bought the property—the full asking price in my pocket so I can reinvest)

I feel, sometimes, like a fool. Other times, like it was the best I could have done with the situation. If anyone has some insight, please share it with me.

Thank you! —JP

K

[Nathan Gesner]

"I'm still missing our written contract." Am I reading this correctly? You don't have a written contract?

Land contracts or seller financing or lease-options are high-risk because you're typically dealing with someone that can't qualify with a bank. If they can't qualify with a bank, that means they are high risk and you should only deal with them if you have proper risk-mitigation in place.

I recommend no less than 5 - 10% of the sales price as a non-refundable deposit. Also, any improvements to the property become your property. If they default in the terms, you "foreclose" and take the property back along with any improvements. Even the poorest people in this country can walk away from $500. It's much harder to walk away from $5,000.

I also wouldn't allow them to miss two payments. I would hire an attorney yesterday and get this property back ASAP.

You should also find a REALTOR, investor, or someone on the ground with market knowledge that can assess your situation and give you advice on how to move forward.