All Forum Posts by: Sheri Ulm

@ Brian Gibbons

We did a lot of all inclusive trust deeds when I worked in hard money lending. In 13 years in real estate in CA I never even heard mention of a land contract but I know they were more common here years ago. I'd be interested in learning more about the contract for sale that is like a contract for deed, just to expand my knowledge. I'll have to look into that. Thanks for the info.

I will add that my property is in Ohio. I did all my due diligence via my representative as I've never seen any of my rental properties in person since I'm in California.  I had the purchase contract written by a Realtor since it was a listed property, land contract was drawn up by an attorney and the closing was handled by a title company who also did a title search and is insuring the title and recording the land contract. I am responsible for the taxes and insurance as of the closing date and made the repairs necessary to get it in rental condition. 

I've never heard of this but that don't mean it's not possible. Normally on a land contract the seller holds the deed until the loan is paid off and then the deed transfers to the buyer. I am buying one now where I put down 20% and the seller is still holding the deed till it's paid. I believe if you get the deed it would just be seller financing and not a land contract.

@Simon Campbell

Thanks again for your response. The land contract was drawn up by a lawyer and it will be recorded.

@Susan M @Simon Campbell @ Jeremy Davis

Thanks for your responses. I did pass on this insurance on the two properties I bought with cash but just thought maybe it should be done since this is a land contract. But given the responses here, and my gut instinct, I think I will pass again. 

I am closing on a land contract purchase in a few days and I have the option of purchasing Closing Protection Coverage which covers

1) Theft, misappropriation, fraud or any other failure to properly disburse settlement, closing or escrow funds; and

2) Failure to comply with any applicable written closing instructions, when agreed to by the licensed agent.

This is in addition to my normal Title Coverage.

Has anyone purchased this coverage? Why or why not? I'm thinking it might not be a bad idea given its a land contract purchase but don't want to be wasting money on something that isn't necessary. Any thoughts?

@Garrett May

For the most part my experience has been good but My advice would be to make sure you use a good title company that is familiar with land contracts. I've only done this one land contract deal... My others I paid cash. I bought this one thru a Realtor and the first title company was clueless and after over 4 months of BS we pulled the file and took it to a different title company where it has been for a month and we are now looking to close Nov 1. The original title company needed to do an addendum due to a change in insurance amounts due to the original contract having an estimated amout since it was impossible to know the exact amount at the time we made the offer. But they couldn't figure this out and kept trying to redo this and redo that and kept going in circles then saying no forget that we need to do this etc... The whole time I'm saying "just do an addendum" and they kept saying they couldn't do that. It was so stupid. We took it to the new title company, tell the girl the while story and she takes one look at it and says "why didn't they just do an addendum?" We are now on track but the new company had to start the title search all over and there were a few things that had to be paid by the seller to clear the title so it still took awhile. The plus side is the sellers allowed me, in writing, to make the minimal needed repairs and procure a tenant before COE due to the delay. So, I already have it finished and rented and am making money on it despite the delay in closing.

@Steve Vaughan

I disagree with your statement to never buy on a land contract. While your argument against it is very valid and completely true I believe there are exceptions. I just purchased a rental on land contract. However, I only paid $5k for the property with only $1k down and a few hundred in closing costs and the land contract is only 3 years. While it's true the sellers could get sued in this period of time and I could lose the property I only need to own it 4 months to cover what I have into it. After that I'm cash flowing a couple hundred a month after PITI and paying my PM. And that goes up + $100 month once the seller is paid off. And with no pre payment penalty I have the option to pay it off sooner thus further reducing my risk. Now granted some people won't even look at the area I buy in but I'll take a deal like this any day of the week.

Thanks @Jen Kutz, I'll keep you in mind if I need someone down the line.

The first two homes I bought in Ohio I didn't put down any earnest money deposit.  The only time I brought money to the table was when the title company had me wire the closing funds the day before I closed.

I'm on my third purchase in Ohio and the first two were handled by an attorney who owned the title company. My current transaction is with a title company. I know the title company has an attorney but I'm not sure if he will be utilized in my transaction or not. Here in California we normally use escrow and title companies... No attorneys. I was a Realtor for 7 years and never utilized an attorney in any transactions here.