Community Updates & Information

Think Twice About Land Contracts

By: LASCO

With traditional mortgages out of reach for many lower-income borrowers, some homebuyers are turning to riskier alternatives, like “land contracts” that don’t involve a bank. Many are lured into land contracts as an affordable alternative to a mortgage. What many buyers don’t understand is that they often have to pay more (including taxes, insurance, and repairs) but they can often be evicted just like a tenant.

Some problematic sellers know how to take advantage of people looking to own a home. Here are some recommendations for people who are considering a land contract—or even if they’ve already signed one:



• Contact banks, credit unions, and other lenders to see if they might qualify for a mortgage loan. If possible, they should borrow the money and buy the property through a mortgage.
• Make sure the land contract is written, and the buyer understand all the terms. If possible, the buyer should have a lawyer create and review it.
• File the land contract with the county recorder.
• Keep payment records and ask the seller for yearly accountings.

If you are working with someone who has entered into a land contract agreement and is being evicted or facing foreclosure, please refer them to us. They can ask for help by dialing 888-246-4420 or filling out an intake form at www.lasco.org/Apply.