Guide to selling vacant land in Michigan

Buying & Selling Real Estate
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Guide to selling vacant land in Michigan

Anthony Shaw
Member since 2019 · 2 posts · 2 votes

Hello,

I am looking for someone to provide a complete step by step guide to selling a vacant lot in Michigan. I own several small vacant lots and I want to sell them by myself to avoid unnecessary fees. What I'm looking for is a list of items that I will need to do after I find a buyer. Ex. Deeds, purchase agreement, etc.

Should I use a Warranty deed if iv not done a search on the property? Or should I just use a quitclaim deed and call it a day?

How about a Special Warranty Deed?

What should I do with the deed after I have filled it out? Send it to the county? 

Does the deed need to be notarized?

What other documents do I need?

How about owner financing? Is this an option I should offer? Is it worth it? If so, How?

What is the most common way to collect payment?

Do the documents need to be signed in-person?

These are all the questions I can think of? I'm hoping someone here has gone through the same thing and can share some insight.

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Andy BaumanPro Member
Phoenix, AZ · Member since 2019 · 115 posts · 54 votes
6y

You could start here:  Link by @Seth Williams

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  • Charles Kao
    Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
    6y

    @Anthony Shaw

    Thats alot of questions to answer. Get a realtor.

    0Reply
  • Andy BaumanPro Member
    Phoenix, AZ · Member since 2019 · 115 posts · 54 votes
    6y

    You could start here:  Link by @Seth Williams

    2Reply
  • Seth WilliamsPro Member
    Specialist · Grand Rapids, MI · Member since 2012 · 582 posts · 353 votes
    6y

    Hey @Anthony Shaw - I've done exactly what you're talking about MANY times in the state of Michigan.

    As for the deed, you'll want to get educated about what is being implied with each type of deed. The only time I use a Warranty Deed when I'm selling is if I purchased title insurance on the property back when I first acquired it. If I'm not willing to guarantee that the title history is clear when I sell the property, another option is to use quit claim deed, because it doesn't make any promises about whether the title is clear. Note: title companies hate these... but if you're not using a title company to close and your buyer is willing to accept it, this would (in theory) keep you in the clear if any unseen historical title issues arise in the future.

    Yes, you would need to get the deed notarized and then mail the original document to the county register of deeds to get it recorded (you'll also have to pay a recording fee when you do this, so call the county ahead of time to find out what the cost of this will be).

    You'll also want to fill out a Property Transfer Affidavit once the deed is recorded, to notify the local municipality that the property has changed hands (this will help them re-assess the property and know where to send the future property tax bills).

    Owner financing is an option, but it doesn't come without its complications. For example,

    • You'll need to make sure you're using the right paperwork, with the correct language for the state of Michigan.
    • You'll need a solid system for collecting payments (preferably one that works on autopilot).
    • You'll need a system to keep track of the loan balance.
    • You'll need to know how to deal with borrowers who pay late or stop paying altogether (because this definitely will happen if you do enough of these deals).

    Seller financing is great if you decide to scale it and get the proper systems in place... but you're also signing up for a lot more complexity than just selling the property outright for cash.

    There are a lot of details to keep track of when you're closing in-house. I can certainly be done, but be sure you're going slow and taking time to make sure all the i's are dotted and the t's are crossed.

    Of course... this is pretty much why title companies exist - to mitigate all the issues and complications of self-closing, but I understand that some properties are so cheap that the added cost of a title company isn't always economical.

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    2Reply
  • Anthony Shaw
    OP
    Member since 2019 · 2 posts · 2 votes
    6y
    Originally posted by @Charles Kao:

    @Anthony Shaw

    Thats alot of questions to answer. Get a realtor.

    I am on this forum to avoid that exact thing. Hopefully, I can get my questions answered. While also leaving a resource for other people. 

    1Reply
  • Saravanan Saravanan
    Lender · Troy, MI · Member since 2019 · 432 posts · 147 votes
    6y

    @Anthony Shaw
    In my experience when we fund a transaction, including limited vacant lands; we want a Warranty Deed for the buyer. Also, we need to have the buyer receive title insurance from the seller and close deal through title company.

    When someone builds things overtime on the vacant lot; which would be worth a lot from a few hundred thousands to millions; it is important there are no issues in the future on that vacant lot and now has a building on it.

    0Reply
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