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Updated over 2 years ago,
Land Contract Seller Financing - Land Use restrictions
I am looking at selling 14 acres of raw forested land in the state of Washington to a buyer using a 3 year installment with balloon payment. I need to spread the land purchase payments out over 3 years for tax reasons... ergo, why the installment contract and not a straight sale.
Couple of scenarios I'd like to protect myself from:
1) How do I protect against the buyer logging and selling the timber, which is worth quite a lot, which would reduce the value of the land? Can I put a clause in the installment contract or the deed that it can't be cut/sold until the loan is paid off? Or that the buyer would need prior permission and agreement from me?
Also, how can I protect against the buyer engaging in costly improvements that he end's up not paying for... resulting in liens against the property? I don't necessarily want to shut down any improvements, but don't want to be left hung out in the cold with unpaid liens against the property. Would I be able to put a restriction in the contract (perhaps on the deed?)? Maybe requiring money be put in escrow to pay for specific improvements the buyer contracts with another party to perform (for instance , to put a road in).
Thoughts?