One of the subjects that is a hot topic of interest in Michigan for prospective home buyers who are standing on a rocky credit history is the subject of Land Contract homes. Michigan Land Contract homes are desired perhaps more strongly than in other states, because the state recognizes seller financing, as an alternative to the traditional conventional mortgage.
So what is the general outline of Michigan Land Contract homes and their written agreements? There are some basic component parts. Here is a quick summary of some of the major parts: Defined parties, property description, sales price, payment structure (including principle and interest), escrow, time frame, disclosures, balloon and down payment. There are also clauses in the Michigan Land Contract that should include what happens in default, and what both parties understand as the definition of this.
Michigan Land Contract homes that go into default are handled in two ways by the seller. One is the pursuit of forfeiture, which is a legal process to accomplish full payment of all payments and fees in arrears. The other is foreclosure which in essence is the recovery of the property for the seller, which results in the eviction and removal of the occupants. Foreclosure of a Michigan Land Contract home results in the buyer losing all prior investment in the home, and the seller regaining possession of the property.
Michigan Land Contract homes have a valuable place in the real estate market. They offer an option of buying a home to a buyer who often times would not be eligible for a conventional mortgage. However, being that most Michigan Land Contract homes have a balloon in which the contract must be paid in full at some future date, a buyer must realize going into the arrangement that signing such an agreement is just the beginning. They must not only fulfill their obligation to the Land Contract agreement, but they must also be effective in their future planning to repair their credit so as to qualify for financing at some future date to satisfy the balloon.
If you would like to gain a better understanding of Michigan Land Contract homes and land contracts in general, I have written and published an eBook that is available in a Kindle format entitled: Understanding Land Contract Homes: In Pursuit of the American Dream. This text will give you a rounded understanding of the subject, and how to determine if the arrangement is right for you.