Legal Question in Real Estate Law in Michigan

Selling vacant land with a land contract

It it good business for me to sell property (14 vacant acres) on a LC? Do I have papers drawn up by a lawyer or real estate agent? An interested party has inquired about purchsing on a LC and I'm at a loss as to how to proceed. He wants to eventually build a home on the property. Is there greater liability for me as the seller? The property is owned free/clear by my 3 siblings and myself. The tax appraisal is $160,000. Any information or direction would be appreciated. Thanks.


Asked on 8/03/06, 3:58 pm

1 Answer from Attorneys
Rochelle Guznack Law Offices of Rochelle E. Guznack, PLLC

Re: Selling vacant land with a land contract

Generally, one who proposes to purchase property on land contract has less than average credit, is seeking a lower interest rate than the current market will provide, and/or cannot come up with a downpayment sufficient to qualify for a mortgage. You should take these factors into consideration and get a current credit report on the purchaser.

There are other issues to take into consideration such as income to you and tax consequences which could be either advantageous or disadvantageous. One primary disadvantage of a land contract sale to a seller is that it is more complicated for the seller to repossess the property if the purchaser defaults. You would have to hire an attorney or try to do it yourself.

If you really want a quick sale and are inclined to accept the offer, you may also want to consider a short-term land contract (2-5 years).

Good luck.

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Answered on 8/04/06, 9:26 am


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