Land Contracts Are Back

As Sellers continue to struggle to sell their homes, some are willing to accept a Land Contact. The Sellers that typically fit this situation are older people who have paid off their mortgage. Thus they can sell on land contract with only $10,000 to $20,000 down and hold the 'mortgage' themselves. In today's investment environment, these Sellers are likely to get a better return on their money than in any other investment vehicle, so if the buyers have some cash to make the risk worthwhile, it can be a good deal.

For the buyers it means no bank fees to originate a loan, but typically they do pay an interest rate from 1/2 point to 2 points higher than they might receive with a conventional mortgage. It also can be a very quick process to put a land contract into place.

Why would a buyer want one?? Typically the buyer looking for land contract terms on a home purchase is someone who has a bad credit situation, perhaps from divorce or bankruptcy, and cannot get a mortgage from a conventional lender at this time. Yet, the buyer has a good job, cash in the bank, and could be ready to obtain a conventional mortgage in a few years. That is the perfect land contract applicant, and the land contract usually is written with a term of 3-5 years, but on a 30 year amortization so one has 'normal' payments, and the buyer has to get a mortgage at the end of the 3-5 year period as the loan comes due then as a balloon payment.

Any questions? If so, please do call me at 800-923-3245. Barbara

Improvement in Milan Real Estate

It's hard to believe with the stories you hear on radio and T.V. but the stats prove that our market is indeed getting better. Sales of residential homes in Milan are up for the month of July 2008 over July 2007 by over 150%. Year-to-date 2008 sales are 30% over those of 2007 for the same period of time. The number of current pending sales will also push Milan's August 2008 sales over August 2007 sales.

I've been saying for some time now that our market has "bottomed," and these stats support that belief. So for those who have been waiting to buy - don't wait, but get out and find a bargain while they still exist. It will take a long time for a recovery in our markets but it seems we are on the right path.

If you wish more information on any particular area or a particular price point, please call me at 800-923-3245 and I'll do more specific research for you.