Land Contract on a Mortgage Property

[Tiffany Jones]

Hello All,

I have an investment property in Baltimore, MD that I would like to sell. I have someone that is interested in the property and wants to do a land contract agreement. He wants to keep the property as an investment. The property is currently on a 12 month lease. The house was appraised at $100k and that's my asking price. He has offered to do a $10k downpayment. I'm thinking a 3 year hold and a balloon payment at the end of the 3rd year. I have never done a land contract agreement before so I'm a little hesitant.

Questions:

1. The property is currently mortgaged so would a land contract force the due on sale clause?

2. Who is normally responsible for the repairs after a land contract is signed?

3. Would I still be able to deduct the mortgage interest, taxes, insurances, etc. on my annual taxes after signing a land contract agreement?

Any advice or guidance you can gave is truly appreciated. Thanks :)

Tiffany