Tn Land for sale by owner questions ?
- Thread starter Grumpy Old Man
- Start date
Danno1
Veteran Member
OP
Grumpy Old Man
Veteran Member
no credit check, no job verification, pay and go, miss 3 payments you lose it period .
dave1949
Super Star Member
Conceptually, it isn't. But note Grumpy's reply, and the earlier post about selling the same lot multiple times.
There is absolutely nothing wrong with such sales, they can work out just fine for the seller and buyer, but they do tend to attract buyers who would not qualify at a bank for a bare land loan. People who are dreaming a bit above their budgets with no reality checks applied. It's entirely up to the seller's discretion to decide or even care if the buyer is a good risk or not, because they aren't risking much of anything.
Miss a payment or whatever the stipulation is, and the advantage is primarily to the seller. A bank generally wants a buyer to succeed, they may be able, or hope to work out something. The seller in these cases doesn't necessarily have the same motivation or depth of resources as a bank.
greasemonkeyok
Veteran Member
You guys may be laboring under a false impression regarding the advantages of such contracts for a deed. You might want to get proper legal advice as I understand lots of states have consumer laws that directly regulate these types of deals.
First result of an internet search, "[t]here's no single nationwide set of standards that addresses these contracts, but California has developed statutes that thoroughly lay out just how contracts for deed can be used." Internet says Maine has laws on land installment contracts also.
Personally, I wouldn't rely on TBN or internet searches for any sort of legal advice either. For example, you can find idiots dispensing legal advice regarding the reasons and authority on why you don't have to pay federal income taxes. Ask Gordon Kahl, Jerome Daly and William Drexler how that worked out.
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dave1949
Super Star Member
Who is dispensing legal advice? Danno1 asked why these sales are different than a mortgage in terms of why a seller has an advantage. I gave him some general reasons why they can be different. Buying through a bank compared to buying from a private seller are going to be different under the applicable laws.
If you look at Post #2 in this thread, I advised using a good real estate attorney.
joshuabardwell
Elite Member
With a mortgage, you are the legal owner of the property, and the bank has a lien on it. For them to claim the land, they have to go through foreclosure, which is a rigidly defined legal process, with extensive protection against fraud, incompetence, and malfeasance. With a mortgage, you also must go through a closing process, which has various legal protections in it for the buyer, such as a title check and so forth.
With a lease-to-own, none of that needs to be in place. The seller can write whatever sort of contract he or she wants, and reclaiming the land may be as simple as an eviction, a much lower legal standard than a foreclosure.
greasemonkeyok
Veteran Member
Well, I read your post to infer (as Grumpy Old Man and Joshuabardwell have stated in effect) that the seller under a contract for a deed can just take the property back if the buyer misses one payment and the seller can sell it again easier than a bank can foreclose a mortgage. If that was a misread of your post, I apologize.
That difference may be the law in Tennessee (and Joshuabardwell may be a Tennessee lawyer dispensing legal advice), but it is far from being universal. I know a fella that learned the hard way that his "contract" had to be foreclosed just like a mortgage in a different state.
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dave1949
Super Star Member
No apology needed. I think Grumpy said three missed payments, but whatever, I am sure the regs vary from state to state. The properties I see for sale/owner financed in Maine are mostly off in the boonies. Land with or without camps that people might buy for hunting, snowmobiling, summer getaway places, sometimes seasonal access (no roads plowed), etc. I don't think many banks would be interested in holding a lien on those types of properties, so owner financing makes sense to try and sell them.
pappy19
Silver Member
Get a certified surveyor plat of the property and title insurance, although title insurance is mostly a rip-off as they have so many exclusions, it's very hard to sue them. A good land lawyer may be a better way to go. Go see the property, old Google aerials may not show that all the timber was harvested and the land is only worth pennies on the dollar.
Pap
Pap