Land contract Seller Payback 80% if Buyer defaut

Investor · Cincinnati, OH · Member since 2022 · 12 posts · 8 votes

I just got off the phone with a seller who states that in a land contract, he would have to pay back up to 80% of payments to the buyer if the buyer defaults. Thus, he wants nothing to do with carrying the note. This is in OHIO, and I can not find anywhere that it states what he is saying. Has anyone run into this or have anything that states it or not?

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Chris SeveneyBusiness Member
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Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Jake Bourgraf:

I just got off the phone with a seller who states that in a land contract, he would have to pay back up to 80% of payments to the buyer if the buyer defaults. Thus, he wants nothing to do with carrying the note. This is in OHIO, and I can not find anywhere that it states what he is saying. Has anyone run into this or have anything that states it or not?

we have done a lot of land contracts in Ohio and I have never seen this. There are rules in Ohio where if the borrower has more than 20% equity or has held the land contract for more than five years then the lender must go through a judicial foreclosure as if it was a mortgage.
In Maryland there is a law if it is not recorded the borrower at any point can request all payments be reimbursed back to them. CRAZY
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Jake Bourgraf
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Investor · Cincinnati, OH · Member since 2022 · 12 posts · 8 votes
2y
Quote from @Chris Seveney:

Quote from @Jake Bourgraf:

I just got off the phone with a seller who states that in a land contract, he would have to pay back up to 80% of payments to the buyer if the buyer defaults. Thus, he wants nothing to do with carrying the note. This is in OHIO, and I can not find anywhere that it states what he is saying. Has anyone run into this or have anything that states it or not?

we have done a lot of land contracts in Ohio and I have never seen this. There are rules in Ohio where if the borrower has more than 20% equity or has held the land contract for more than five years then the lender must go through a judicial foreclosure as if it was a mortgage.
In Maryland there is a law if it is not recorded the borrower at any point can request all payments be reimbursed back to them. CRAZY

Yes, I saw the 20% but not the other part so just looking to see if anyone has dealt with it in Ohio.
I prefer seller financing so I keep the deed. Whats the major difference in the two?
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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2y
Quote from @Jake Bourgraf:

Quote from @Chris Seveney:

Quote from @Jake Bourgraf:

I just got off the phone with a seller who states that in a land contract, he would have to pay back up to 80% of payments to the buyer if the buyer defaults. Thus, he wants nothing to do with carrying the note. This is in OHIO, and I can not find anywhere that it states what he is saying. Has anyone run into this or have anything that states it or not?

we have done a lot of land contracts in Ohio and I have never seen this. There are rules in Ohio where if the borrower has more than 20% equity or has held the land contract for more than five years then the lender must go through a judicial foreclosure as if it was a mortgage.
In Maryland there is a law if it is not recorded the borrower at any point can request all payments be reimbursed back to them. CRAZY

Yes, I saw the 20% but not the other part so just looking to see if anyone has dealt with it in Ohio.
I prefer seller financing so I keep the deed. Whats the major difference in the two?

significant difference in a traditional mortgage where deed is transferred vs. a contract for deed. if I was the buyer, no chance I would do a CFD - I want title in my entity. I would recommend discussing it with an attorney to describe all the nuances.
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