Selling on a Land Sales Contract

kingkath — Sun, 29 Mar 2009 20:22:01 +0000

Topic: Selling on a Land Sales Contract

Land sales contracts are a vehicle to consider when you desire a built in income and a better interest rate than other investments may provide.

Land sales contracts defined: A land sales contract differs in that the buyer typically does not obtain title to the property until the contract of sale is satisfied. The buyer in Oregon has what is called “equitable title.” When using this strategy you become the Vendor and the buyer becomes the Vendee.

In Oregon it is not uncommon to use a note and trust deed in lieu of a land sales contract in order to create a similar stream of income on a sold property. The process for foreclosure is different, as a trustee is given the “power of sale” in the event that the Vendee defaults on the payments.

When selling on contract it is possible to graduate the interest rate as a hedge against inflation.

When you have sold on contract you have shifted the burden of maintenance to the buyer.

It is not a type of sale that should be considered if the desire of the seller is to participate in a 1031 exchange.

It is recommended you seek legal advice to determine which instrument may best suit your situation.

If there is a current loan on the property it is important to speak to an attorney to determine if this is an option for you.

KJK Properties P.C. » taxes

Selling on a Land Sales Contract