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Updated almost 6 years ago on .
Land Investing - In the weeds steps from buying to closing
Hi all, first post to BP! I am getting into tax delinquent land investing with seller financing but am intimidated by the granular steps and paperwork from issuing an offer through selling and closing. I plan to hire a RE attorney the first deal but would like to gain some more confidence. I have researched for hours but its not yet clicked yet. I will lay out my understand of the process flow. Please any advice, corrections or comments would be GREAT!
Someone responds to a mailer and says "Hey I want to sell my land". We discuss and agree to a selling price.
1) I issue a written offer/purchasing agreement subject to due diligence, title search and get them to sign it.
2) I do my due diligence, title search, and am ready to pull the trigger, we agree on a Warranty Deed. I draft a Deed, we sign.
3) Send it to the country for recording. Its recorded and I am now the legal owner
Now I am ready to sell. I plan to sell with Seller Financing utilizing a Land Contract or Contract for Deed
1) I post it and get an interested buyer
2) We verbally agree on price and terms
3) I draft a Purchase Agreement laying out the price, terms, Land Contract terms agreements, Deed type [Warranty, or Quit Claim], and all disclosures and liabilities waivers. They sign Purchase agreement. They send earnest money, doc fees
4) I draft the Land Contract with terms, amortization schedule, disclosures, liability waiver, etc.
5) No need to draft a Deed at this point because I will retain ownership until loan is paid in full
6) We all sign, he pays down payment and begins payment schedule
7) The loan is paid in full, I draft the Deed, we sign, send to country for recording, he gets full ownership
General questions:
Any major missing points in the above?
What service is best for collection of the monthly payments?
If the other party lives hours away, do we literally mail or scan these documents back and forth?
Who literally receives earnest money or money held in escrow?
I assume I would still pay taxes if I sold under a Land Contract? Buyer would pay extra each month and that would go into escrow? Once again, where does that escrow money actually get transferred to? A Title Company?
Does the seller have the right to modify or build on the land before he pays off the loan, or in the Land Contract document would I specify they cannot modify/improve the land without approval?