Land Contract Gurus Please Advise
Hi gurus,
I'm a newbie in Land contract. But I'm going to move out of the State and am selling my house with owner financing. So we're thinking about LC or Lease option depends on the amount of down payment. We're charging at least 10% for land contract, and 5-8% for lease option. We have not done this before, I'm a little scared that I might not know some of the catches in this area. Everyone told us it's risky, but we don't know what they are talking about, we're taking 10% down. and in Ohio law, before they pay up to 20% or 5 years (whichever earlier), we can just evict them, after that, we have to foreclose the house. So please advise if there is anything I should be aware of, especially as out of state onwer.
thanks.
Although 10 percent with a LC is standard, it's been my experience that it's not easy getting more than 5 percent with a L/O. A properly structured L/O can avoid having to foreclose, while a LC could require foreclosure--even if not recorded and even if the wording states otherwise, IF it actually went to court; however, if you have Ohio law on your side, then I would probably go for the LC. It's out of my field, so I'm unaware of any traps.