Before considering selling your property on Land Contract I would advise that you consult with a real estate attorney with regards to the Mortgage and Promissory Note you have signed previously with your lender. They would by the ones that would best interpret your situation, as well as advise you. Please keep in mind that most Mortgages have a "Due on Sale Clause" and it is best to get attorneys advise as well as to speak to the lender (someone whom is a decision maker for your loan) or have an attorney call. With everything make sure to get things in written format. Good Luck!
First, if one takes a look at the MI state approved P&S, then one will see a clause stating that one is acquiring a property subject to the pre-existing financing.
Second, although a lender technically could exercise its "due on sale" clause on any note, I haven't run into any thus far that have called a performing note due. Right now, they're up to their eyeballs dealing with lots of non-performing loans. Calling another one due, that's currently performing, will transform a good asset into a bad one, and the FDIC/Fed is shutting down any banks with too many bad loans on the books.
Third, it's good to work with a real-estate attorney to create the note. Although I also invest in MI (the Detroit area), since you didn't mention which part of MI you'd like to sell your property, I'll recommend that you might want to network with some of the investors in your area to see how they're doing it.
Fourth, Wendy Patton (an investor and real-estate broker) is from MI, has sold plenty of properties with seller financing (land contract is a form of seller financing) in MI, and you can search google for more info on her.
Homeowners can only sell their home on a land contract if one of the following is true:
1. The home is owned free-and-clear with no mortgage on title
2. The current lender(s) agree to waive the, "due on sale," clause allowing you to then sell on a land contract
3. The current mortgage does not have a due on sale clause in it.
In short, you must obide by the terms of any existing mortgage. You should contact an attorney with any legal questions and/or for legal advice.
Yes, there is a big market for land contract transactions ... but only a small percentage of properties are options for these particular buyers.
Best wishes and keep us posted.