Land purchase advice needed

[KentT]

There are of course many reason why your neighbor might want to sell part of his land many of which would be legitimate. We are currently purchasing some farm ground on contract and it is working very well for both parties. At the time we set it up we agreed on an interest rate that was better than what they could get at the bank and less than what it would have cost me to borrow it. Win Win We did use a lawyer to get it set up right for both parties. Good Luck.

Land contracts can work well, especially if you're buying someone's old family farm, for example...

I've known a few cases where someone purchased a family farm from the old couple who lived there, on a custom-designed land contract, giving them a "lifetime estate" to live there in the old farmhouse, to grow a vegetable garden, and in at least one case to continue to farm the land as they saw fit... As long as they're alive they could continue to "act as if they owned it," then upon their death it became the sole property of the buyer with any remaining unpaid balance from the initially agreed price then owed to their estate and heirs.

The old couple used the monthly payment to supplement their meager Social Security check for their retirement. The old couple had a "guaranteed income" and the buyer got a good deal on the land, with no real mortgage fees/interest, and everyone was happy... The biggest risk to the buyer was not being able to make the final "balloon payment" when the couple died off -- whenever that might be... in the cases I'm familiar with, the new buyer had enough equity when that happened that they had no problem either paying it off or getting a bank loan for the remainder.

It's something to consider, expecially as the baby boomers get older and start dying off, leaving many of the small old family farms to be sold, subdivided, etc. I'd guess a lot of these people don't really want to sell and move to town, or see their family farm sold and subdivided, but they're getting too old to either maintain the farm or make a living running it... this might provide them an appealing alternative.

 

[survriggs]

Option 3 - Owner finance. Here's the one I'm leaning toward. To my knowledge, he would be in a win-win situation. He holds the deed until paid, and if I default, he keeps the $ and the land. Also, he farms the field on this place. I told him I'd allow him to continue farming it (keeps the deer coming in).

This may have been addressed somewhere back in the thread; I just skimmed through but there may be a few problems with owner-fin where he holds the deed. (Contract for Deed) The owner may still be able to mortgage it, lose it in bankruptcy, subject to a tax lien...etc. since he still has fee title to the land. If it is owner financed, get a warranty deed and give the owner back a trust deed.

Surveyor Ralph

 

[survriggs]

Survey? Any thoughts would be appreciated.

Podunk

We can either survey it now, or later when the dispute comes up over where the boundaries are. And, I can guarantee that it will cost more when the dispute comes up!!! And that's not counting the attorneys fees.

Surveyor Ralph