What documents are necessary for seller financing a vacant building lot?
I have a lot that I want to sell on monthly payments through seller financing in Pennsylvania. I don’t want to use a land contract. Can I just use a standard purchase and sale agreement which states the terms, ie payments, etc. or do I need additional instruments as well like a note, vendor’s lien deed, etc?
Does the deed go to the buyer or does the seller keep it. Also does the deed have to reflect the existing lien?
Standard contract is fine. You will be having the buyer sign a Promissory Note for the loan amount. THis will state the interest rate and length of loan. THere will also be a 2nd document; either a Deed of Trust or a Mortgage. THis will explain what you can do if the buyer does not pay you. You keep the note. You record the Deed of Trust. Then you are done. You will sign a Warranty Deed which is easy since you have the deed from when you bought it. That will be recorded.
One note. If the buyer does not pay you, you foreclose and take the land back. A smart buyer will declare bankruptcy. You will get a letter from the judge telling you that the BK is a federal action and you can not slow or stop it. Devious buyers cancel the BK after 5 months and 29 days. Just before it was to be discharged. Then when you start foreclosure again, they declare BK again. You probably know that this buyer will not do that to you.
You’re going to need more than a Purchase and Sale. You’re going to need a mortgage note so it can be registered against the title. There may potentially be other things that are required. I’m not sure if PA is a title state or if you need an attorney, but some professional advice is required.
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