Lindsey Bour…, Both Buyer and Seller in Bay City, MI

what is the difference between lease to own and land contract? What is the best was for a FSBO to go about selling that way?

Asked by Lindsey Bourassa, Bay City, MI Mon Aug 16, 2010

We are selling our home and considering leasing to own or offering a land contract, which is best for FSBO and what forms/legal steps do you take? How much % down payment do you require?

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2
Bob McClure, Other Pro, Walled Lake, MI
Tue Aug 17, 2010
good morning lindsey....i suggest a lease to own...rather than a land contract....if you have any existing mortgage on your property, a land contract will violate the due-on-sale clause, and, at the lender's discretion can accelerate and begin foreclosing...they typically catch it when the new declaration page for the homeowner's insurance comes into the lender's servicer with the new owners listed as having an interest in the home....a lease/option is two different things...you can certainly lease out your home..be prepared for a higher homeowner's insurance premium and higher real estate taxes..possibly as much as 40% higher ...as a non-homestead..an option to purchase is an agreement to sell your home at a pre-determined price in a pre-determined timeframe with pre-arranged terms..and if it prepared properly, can be recorded at the register of deeds to protect both you and the prospective buyer(s) ...you would need to add up how much you currently owe on your home, plus the cost of seller's title and michigan state transfer tax to determine your break even when negotiating the option price...remember...if you are trying to qualify for another mortgage to purchase a home..you would need to include the existing house payment (piti) into your debt ratio.a new lease with no payment history will not be considered as income to help you qualify..if you would like more information..please call...
best regards...
bob mcclure
mortgage one
brighton, michigan
1 vote
Keith Sorem, Agent, Glendale, CA
Tue Aug 17, 2010
I suggest that you contact a real estate attorney who has access to all pertinent documents.
Acceptng advice from a person without such knowledge is probably not in your best interest.

I am surprised at how people are unwilling to pay for professional advice, yet complain when they suffer from lack of same.
0 votes
I'm sorry sir, but i feel you are just showing your greed. Did you ever think that some people can't afford to pay for advice? Times are severely hard and of course talking to a real estate agent just makes you question if they are getting you the best thing for you or for his pocket...
If you wish not to answer the question then its simple just don't make a comment.
people ask other people for research! to learn from others experiences.
Flag Fri Apr 12, 2013
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