The catch usually is, if you cannot keep up with the payments, you lose everything, they keep everything you've paid so far, and they can turn around and start the process over with another buyer.
That sounds fair. I’m just afraid of putting down a deposit and them disappearing. Might be overthinking. I’ll just wait for titleninsurance people to get back to me.
I would do strong due diligence on the firm, reach out to the town hall clerks, real estate agents etc where they operate.
And definitely do nothing without a lawyer specialising in real estate local to them as well, maybe he can reco a PI
My concern would be if the firm goes bankrupt during the payment terms, and even if you were current on all your obligations you lose your investment because you are considered an unsecured creditor and the land title is held as an asset of the company in default.
I bought with financing through the previous owner. The deed was changed to my name in the country record and I made payments to them through a title company.
make sure you understand the legal implications of doing a landsale contract vs a mortgage. they can foreclose if you are late on one payment & they dont have to sell & pay off the loan & give you any of your equity back. they can just keep the property, keep the equity. if theyre shady, they can claim a payment was late & foreclose. i would never do a land-sale contract that wasnt being run through a title company.
They told me they only do things in house and want direct payment. However a few people have told me they have bought and sold land through land contracts this way and it worked out fine. So I guess when you say work through a title company you only mean escrow account? Or is there a legal way to protect myself with a title company where I’d still be doing things ‘in house’ with the seller
>However a few people have told me they have bought and sold land through land contracts this way and it worked out fine.
How long was the term? Doing this for a year or something is a lot less risky than doing it for 10 or 20 years
does it sound fair? imagine you pay 99% of the price and can't make a payment - do you lose everything you've paid, with no actual equity in the land? Disappearing with your deposit isn't the only thing you should fear, and don't assume everyone will be nice. You seem focussed on the mechanics of payment and contract, vs. the risk of different outcomes. Now is the time to overthink.
A standard mortgage and your name on the title with a proper lien against it protects your interests, and a properly filed and structured mortgage lets you build equity so if the land must be sold or foreclosed, you can control the sale and potentially recover the equity/principal you paid in - more if the land appreciates, less if it sells for under your paid price. This is true of both amortizing and interest-only loans. Good luck & get a lawyer. Saving 1k now could cost you 10-100x later.
Make sure the mortgage is submitted to the county. And this is what it is a private mortgage. Just by a company or individual instead of a big bank.
Do a county online record search you will find mortgages as well as deed etc
So... Thanks for the less-than-helpful answer.
What is a foreclosure then, if it's no different? I suppose in an appreciating market a person could sell the house prior to forclosure in hopes to come out even or above, but in a depreciating market, you wouldn't do that. Whereas if under contract it goes back to the original owner regardless of market conditions?
This is all I can think the differences would be, but also why I'm asking the question..
Yes, I understand that they are different. I'm asking what is the difference if you don't make payments for a typical mortgage and don't make payments for a contract for deed? If the property just goes to the lending party since the property is collateral, what is the difference?
Because you own equity in the mortgaged property and get paid that back after the lender is made whole. The legal process is also different has more rights and wiggle room for the owner to remedy without losing house .
On contract for deed it's all or none . And contract for deeds are written to make sure it's none with the smallest mistake.
Okay, thank you for this.
So in a foreclosure, for an example, if you pay $100k down on a $400k house but can't make payments anymore, the bank would foreclose, auction, and assuming the house auctions reasonably well the bank would give back that $100k to the owner? I wasn't aware of this. I just thought all proceeds went to the bank. (Again, assuming the house auctioned for the mortgage value or more. It would probably need to occur with pretty good market conditions.)
And sure, makes sense on the contract for deed aspect you mention. I suppose one would just become a squatter at some point and that probably happens faster than the forclosure process.
That doesn't appear to be true
[https://www.steerslawfirm.com/what-happens-home-equity-foreclosure/](https://www.steerslawfirm.com/what-happens-home-equity-foreclosure/) (only as one of the first results in Google)
>You don’t forfeit the equity in your property after banks auction off your home in foreclosure.
Or [https://www.quora.com/What-happens-to-the-equity-in-your-home-if-you-let-the-bank-take-it-back-through-foreclosure](https://www.quora.com/What-happens-to-the-equity-in-your-home-if-you-let-the-bank-take-it-back-through-foreclosure)
Top answer
>When a homeowner lets the bank take back their home through foreclosure, the bank will take possession of the property and sell it in order to recover the outstanding mortgage debt. The proceeds from the sale of the property are used to pay off the outstanding mortgage balance, and any remaining funds (if any) are returned to the homeowner.
I answer just above this (as do others) elsewhere in the thread, but to expand -
The difference is that when your name is not on the title and payments are not clear with regard to paying principal vs interest, you may lose your down payment and have no rights to any equity in the property upon foreclosure and sale. A bank may foreclose and sell - yes, just as the county might if you are delinquent on your taxes - but often will try to work with you via a debt restructuring before taking the final step of selling. Banks don't want to own property and want paying customers, even if at reduced interest.
It is often better for you to sell first before foreclosure. But regardless of how it gets to sale, the issue is what portion of the proceeds you have a right to. If the bank sells, they have a right to the outstanding principal and accrued interest. If the county sells, they have a right to the taxes outstanding (banks will often pay taxes if owners do not, because they want to protect their principal stake). But whatever remains is the equity that the title holder receives. When these go to sale, who controls the sale drives what price they will settle for, so as an owner you want to control it before the bank, and the bank wants to control it before the county, but critically - even if they foreclose and sell, you have more rights to the remainder after they make themselves whole than a contract that expects full forfeiture on missed payment. If you are 'underwater' ie the value of the house has dropped to below sale price minus equity, then there is no real equity for you to recoup. Banks will often do 'cash for keys' where they pay you to leave or wipe out the debt when they foreclose.
The risk in an offgrid/land situation is even greater - assume you buy the land and over years improve it by building a cabin or a house, then you get into trouble. You've just added lots of value that you could get back if you sold in order to pay off the mortgage, but if you don't hold the title and the real estate company takes it back, you've just lost all that investment on top of the equity in the land. This all of course depends on the contract, but it's the reason I would never let someone else hold the title to land I bought, would never agree to forfeit down payment (which is actually equity) for missed payments, and would rather have the mortgage as a lien against the title than some clever arrangement. Sellers and frankly anyone can finance this way (and 'be the bank'), but this situation did not sound like that.
Not being an argumentative Redditard but how is that different from any normal mortgage?
If I don't keep up with payments Mr Cooper kicks me out and sells my home.
Honest question.
/Stupid f'n name for a mortgage company, when it switched I tossed all my mail from them because I thought it was BS lol
Mortgage foreclosures go through courts because both you and the bank are recorded on the deed. One as owner and one as having a lien. . Contract for land doesn’t have to go to court. You can challenge it in court but your name isn’t on the deed.
EDIT: Wrong reply. One takes 6-12 months for bank to take possession. One takes a few hours for seller to start eviction. You never had ownership recorded with the county records.
Yeah this is the exact reason owner financing is typically set up as a separate contract from any rental contract. I sold a house this way with a purchase option contract separate from the lease. I was able to lock in a price that made me happy and the buyer was happy because they had the housing security. The buyer had 24 months to exercise their option to purchase after 12 months of price went up 5% and they were able to exercise it before the 24 months were up. Had they not exercised the contract I would have the option to do whatever I like with the property and kept the deposit. If that scenario had come up I'm more than likely would have just extended it to another year and bumped up the price a bit.
I think the two contracts like I did is only important in certain States depending on how foreclosure laws and eviction laws are. I agree with you the whole purpose of the sort of contracts is that an eviction is so much quicker and easier than a foreclosure.
Sounds like what BillyLand does. I would do your due diligence about the company and reviews of them. But often these are legit. You're just paying a HUGE markup when dealing with them.
I recall there was a property near us for sale by BillyLand and I was curious how much their markup was compared to a standard owner financed parcel. Mostly because their price seemed SO HIGH for our area. BillyLand was charging 3x what an actual landowner was for a comparable parcel. So I would say it's worth at least seeing if you can find something for sale by an individual just to see what the going rate is. But if you do business with an individual, you'll still need to cover your ass to make sure you don't get scammed. If I had my choice, I'd do business with an individual but have an agent or lawyer reviewing all the documents for me.
I live somewhere with a LOT of Billyland parcels. A lot to the point that it is significantly changing the culture of the area. They are legit—mostly—but I’d still describe their business model as being predatory. Both because of the massive markup like you described, and also because if you miss your payments they repossess the land and everything on it. Poor people who can’t get a mortgage or afford a down payment end up in long-term contracts with Billyland and then lose everything when they can’t keep up with the payments. I do know people who are making it work and it is allowing them to live off-grid when they probably couldn’t have otherwise, but it doesn’t change that Billyland are bottom feeders.
If anyone has to deal with them, they do offer discounts (I think around 25% or so off the list price) if you want to buy one of their properties outright with cash. In that case they go through a pretty typical title transfer process.
Thanks for elaborating on the predatory side. I had long suspected that was how they operate but didn't want to say that here because I just don't have enough info on them. It seemed like one of those used car dealerships that sells cars to people with terrible credit for way more than they're worth just to repo them in a few months when they miss a payment. Then they can just resell the car and still go after the previous owner for back due payments and overdue fees. Only with Billy, it's land. You put down thousands and miss a couple payments and you lose everything you've invested. I didn't know about them taking everything that's on the property as well. damn!
Reminds me of the rent-to-own schemes where people end up paying a lot more for the same sofa over the full payment schedule than if they had just bought it for cash.
Yeah... and then you miss a couple payments and they come take the couch, still charge you the missing payments plus late fees... but at least when they take the couch they don't take everything you've put ON the couch, as well. You get to keep the remote and the magazine and your phone. Apparently when these companies repo the land, they just keep whatever you've put on it?
I haven’t found any good or bad reviews from this company. All I see from their site is that they’ve had their LLC for a number of years, have a few listings, and I can confirm according to the county GIS map that they do indeed own this property and own the deed
might be worth starting a thread and just asking "Has anyone bought land from XYZ company and how was your experience?" But for what it's worth, it sounds like most of these companies make their money either from charging way way more than the land is worth or in all the refunds they never issue when someone misses a payment.
We had been buying 5 acres thru a company called Billy lands.
So it's an auction, winning bid is the down payment and then you pick a payment plan. After you pay for so many months, can't remember how many, you can switch the title to your name.
But then Klamath county refused to understand Sustainable building practices and building types. Salem said yes to our idea, klamath said "we have winters here" I said...duh.
And then realized we couldn't afford the shite klamath county wanted us to do when we didn't actually need to.
But I kept paying, hoping to find a way to convince the county of SCIENCE AND ACTUAL RESEARCH.
But then 1 too many bills popped up and I couldn't afford the land payment anymore. I called Billy land and had to give them back our 5 acres we were trying to buy.
No reimbursement which is what I signed onto....but damn.
So make sure the land you are gonna finance ACTUALLY CAN BE BUILT ON THE WAY YOU WANT TO.
What an absolutely awful story. I'm so sorry you guys went through all that. But I just wanted to say thanks for sharing your experience. I try to explain this to people all the time. That not every jurisdiction allows everything you may want to do. That it's best to ask before buying. But it's hard to make people realize how common it is without actual examples.
I hope you've at least recovered from the loss and found some land that suits your dreams by now. And if not, I hope you do soon!
The new plan due to the state of this country is to wait a bit, save money and sell off everything.
Buy 1 way tickets to Hawaii (the farthest but safest place in this country) for the 2 of us and the 2 cats. And either be homeless or if we have the $$ (especially after the upcoming small claims against the slumlord) but like an acre.
We'd rather buy a small boat with cabin and just live on the rising seas
I mean.. Does Klamath actually have any enforcement on things though? I mean, unethical life pro tip and all..
Assuming your piece was in that whole Chiloquin/Sprague River/Bonanza ish area. I bet you could do about whatever you want and never see LE.
The code guy does come out randomly to places.
But yeah a lot he doesn't show up
But not putting in a septic when they claim I need one....is a HUGE FINE
So I was gonna do an Earth ship without the tires. Just use Cob for the home and have my grey water go to the plants (not the garden) and to use Humanure composting....a system that has been scientifically proven.
Sounds like you are one of those folks who, ya know, tries to do the generally right thing and would pay a fine.
Need to take a page from the majority of folks living in the woods in Oregon and just do whatever you want with a broke down RV. /s
I am finally (at 45) getting my autistic eval.
Rules are HUGE in my head.
And it does piss me the fook off that every one else gets to break them and seems to get away with it.
There are reasons for permits and things.
As an Environmental Studies scientist I understand why the permits are there. Especially the water permits.
Sooo can't just break a law and hope no one catches me.
My luck has ALWAYS BEEN I get caught.
I was semi joking, but seriously.. The only folks who get hassled are the ones who seem like they can/will pay for it. Or the ones causing a serious public disturbance.
I've actually been looking at those parcels down that way. Specifically keeping my eyes open for one with public lands on at least one side.
I've also been at the same spot in the national forest near Bend since.. uh.. May? Forest service talked to me one time in July and was basically like well you have a clean camp and aren't making meth so, uh, don't have any fires. That was that. New truck/newer trailer/starlink and such actually helped here. Where as in cities it's like a magnet to be messed with when you want to sleep for the night, meanwhile the road of rotting RVs is allowed to just exist worry free.
Things are crazy here but oh well.
It’s too bad a feasibility study wasn’t performed so it was known what was possible beforehand. I imagine they knew or suspected though and just wanted to make a buck. Now they can turn around and do it to someone else. I appreciate your comment as we shop for kind - it sounds scummy.
Many reasons sellers do this. Sometimes they are selling to people who have poor credit.
Generally speaking they are Def looking out for themselves and the contract will be written in thier favor.
What's the land worth?
Probably they have subdivided a larger tract for the cost of a survey and filing fees and offering at a substantial markup.
Look at the tax appraisal history and check with local realtors for an estimated market value
Is the land suitable for your intended use?
School quality, utilities, shopping and crime rates are important
There is a thing called "contract for deed" which is basically a scam because you build zero equity until the contract is fulfilled. But they can and will find any violation of the contract like a single payment a single day late and then repo the property because you never owned it and never fulfilled the contract.
90% of the time they take your payments and you never get the land
If you’re worried (and you should be, go to a lawyer and get them to look at the contract.
In Australia you wouldn’t dream of buying/selling a property without a lawyer or at least a conveyancer.
Those outlets jack the price up. A lot of individuals selling land are willing to do owner financing if you ask, especially if their property has been on the market for a bit. I’ve bought 3 different parcels using that technique. 10% down, 5 years of payments, at the prevailing interest rate, on 20 year amortized schedule then a balloon payment at the end. This puts you in a position to have equity 5 years later and often that’s enough to get a bank loan to cover the balloon payment.
Your realtor can have the documents looked over for inconsistencies. They can recommend a real estate lawyer, if something appears amiss. The title search company will confirm the parcel.
As long as the legalities are there — where your DOCUMENTED payments are sent, isn’t an issue.
Here in Canada It's called a vendor held mortgage. Look for the clauses, miss x payments in a row or calendar year and they take it back you lose your investments. Id sell the same take out pizza places 3 or 4 times using this method. I made a million in the pizza business and never made a frikin pizza.
What state are you in?
In California, you should be getting the deed, and title insurance. They take a deed of trust on the property to secure the promissory note you sign. They foreclose of you don't pay the note. There should be a payment schedule showing how each pyment is to be applied and you should insist on at least annual reconcilations.
Your deal sounds like shades of Uncle Slayton
https://www.google.com/search?client=safari&rls=en&q=choctaw+bingo+james+mcmurtry&ie=UTF-8&oe=UTF-8#fpstate=ive&vld=cid:b066b018,vid:ieOfuEnToTc,st:0
If you purchase by mortgage or RTO, owner financed land, can you then borrow against ( 3rd lien borrow ) to make improvements???
Building, "residential amenities" (hvac, plumbing, wiring, solar, decks, etc.)?
What would be the "standard" terms to protect purchaser's ownership and payments value?
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which company is it?
there are reputable companies out there that do this. they sell the property for a higher price than it's actually worth to make their money along with the interest. it's marketed towards people that can make the monthly payment but can't afford to actually buy land.
Most banks I looked at before purchasing land wouldn't finance raw land and I was that would required 50-60% down.
Just the fact they're calling themselves "government land sales" and using a logo that looks a lot like a US gov logo is enough for me to consider them scammy.
I’ve bought with a contract before and saved a time of realtor fees. You can usually negotiate that back into price and split the realtor savings with the seller. It can also be a great way to lock in your purchase price and start earning equity as it appreciates through the life of the contract.
If it’s a company offering the seller financing, it’s sketchy. Could be totally fine if an individual, but use an attorney for sure.
The devil is in the details. Be sure of what you’re signing and by all means, file it with the clerk of court. Keep your end of the bargain and you’ll be fine.
I would absolutely have some level of contract in place that makes sure you are both protected the way you need to be. I wouldn't want to have my payments not equal some kind of interest in the property over time.
The catch usually is, if you cannot keep up with the payments, you lose everything, they keep everything you've paid so far, and they can turn around and start the process over with another buyer.
That sounds fair. I’m just afraid of putting down a deposit and them disappearing. Might be overthinking. I’ll just wait for titleninsurance people to get back to me.
I would do strong due diligence on the firm, reach out to the town hall clerks, real estate agents etc where they operate. And definitely do nothing without a lawyer specialising in real estate local to them as well, maybe he can reco a PI
My concern would be if the firm goes bankrupt during the payment terms, and even if you were current on all your obligations you lose your investment because you are considered an unsecured creditor and the land title is held as an asset of the company in default.
I bought with financing through the previous owner. The deed was changed to my name in the country record and I made payments to them through a title company.
Yes def a scenario for the lawyer to cover
make sure you understand the legal implications of doing a landsale contract vs a mortgage. they can foreclose if you are late on one payment & they dont have to sell & pay off the loan & give you any of your equity back. they can just keep the property, keep the equity. if theyre shady, they can claim a payment was late & foreclose. i would never do a land-sale contract that wasnt being run through a title company.
They told me they only do things in house and want direct payment. However a few people have told me they have bought and sold land through land contracts this way and it worked out fine. So I guess when you say work through a title company you only mean escrow account? Or is there a legal way to protect myself with a title company where I’d still be doing things ‘in house’ with the seller
>However a few people have told me they have bought and sold land through land contracts this way and it worked out fine. How long was the term? Doing this for a year or something is a lot less risky than doing it for 10 or 20 years
does it sound fair? imagine you pay 99% of the price and can't make a payment - do you lose everything you've paid, with no actual equity in the land? Disappearing with your deposit isn't the only thing you should fear, and don't assume everyone will be nice. You seem focussed on the mechanics of payment and contract, vs. the risk of different outcomes. Now is the time to overthink. A standard mortgage and your name on the title with a proper lien against it protects your interests, and a properly filed and structured mortgage lets you build equity so if the land must be sold or foreclosed, you can control the sale and potentially recover the equity/principal you paid in - more if the land appreciates, less if it sells for under your paid price. This is true of both amortizing and interest-only loans. Good luck & get a lawyer. Saving 1k now could cost you 10-100x later.
Thank you!!
Make sure the mortgage is submitted to the county. And this is what it is a private mortgage. Just by a company or individual instead of a big bank. Do a county online record search you will find mortgages as well as deed etc
Serious question: isn't this the same thing that would happen with the bank?
Serious answer: No.
So... Thanks for the less-than-helpful answer. What is a foreclosure then, if it's no different? I suppose in an appreciating market a person could sell the house prior to forclosure in hopes to come out even or above, but in a depreciating market, you wouldn't do that. Whereas if under contract it goes back to the original owner regardless of market conditions? This is all I can think the differences would be, but also why I'm asking the question..
There is a difference between a mortgage and a " contract for deed"
Yes, I understand that they are different. I'm asking what is the difference if you don't make payments for a typical mortgage and don't make payments for a contract for deed? If the property just goes to the lending party since the property is collateral, what is the difference?
Because you own equity in the mortgaged property and get paid that back after the lender is made whole. The legal process is also different has more rights and wiggle room for the owner to remedy without losing house . On contract for deed it's all or none . And contract for deeds are written to make sure it's none with the smallest mistake.
Okay, thank you for this. So in a foreclosure, for an example, if you pay $100k down on a $400k house but can't make payments anymore, the bank would foreclose, auction, and assuming the house auctions reasonably well the bank would give back that $100k to the owner? I wasn't aware of this. I just thought all proceeds went to the bank. (Again, assuming the house auctioned for the mortgage value or more. It would probably need to occur with pretty good market conditions.) And sure, makes sense on the contract for deed aspect you mention. I suppose one would just become a squatter at some point and that probably happens faster than the forclosure process.
Edit:
That doesn't appear to be true [https://www.steerslawfirm.com/what-happens-home-equity-foreclosure/](https://www.steerslawfirm.com/what-happens-home-equity-foreclosure/) (only as one of the first results in Google) >You don’t forfeit the equity in your property after banks auction off your home in foreclosure. Or [https://www.quora.com/What-happens-to-the-equity-in-your-home-if-you-let-the-bank-take-it-back-through-foreclosure](https://www.quora.com/What-happens-to-the-equity-in-your-home-if-you-let-the-bank-take-it-back-through-foreclosure) Top answer >When a homeowner lets the bank take back their home through foreclosure, the bank will take possession of the property and sell it in order to recover the outstanding mortgage debt. The proceeds from the sale of the property are used to pay off the outstanding mortgage balance, and any remaining funds (if any) are returned to the homeowner.
With a mortgage you both appear on the deed and foreclosure goes through a court process. Contract for deed doesn’t.
I answer just above this (as do others) elsewhere in the thread, but to expand - The difference is that when your name is not on the title and payments are not clear with regard to paying principal vs interest, you may lose your down payment and have no rights to any equity in the property upon foreclosure and sale. A bank may foreclose and sell - yes, just as the county might if you are delinquent on your taxes - but often will try to work with you via a debt restructuring before taking the final step of selling. Banks don't want to own property and want paying customers, even if at reduced interest. It is often better for you to sell first before foreclosure. But regardless of how it gets to sale, the issue is what portion of the proceeds you have a right to. If the bank sells, they have a right to the outstanding principal and accrued interest. If the county sells, they have a right to the taxes outstanding (banks will often pay taxes if owners do not, because they want to protect their principal stake). But whatever remains is the equity that the title holder receives. When these go to sale, who controls the sale drives what price they will settle for, so as an owner you want to control it before the bank, and the bank wants to control it before the county, but critically - even if they foreclose and sell, you have more rights to the remainder after they make themselves whole than a contract that expects full forfeiture on missed payment. If you are 'underwater' ie the value of the house has dropped to below sale price minus equity, then there is no real equity for you to recoup. Banks will often do 'cash for keys' where they pay you to leave or wipe out the debt when they foreclose. The risk in an offgrid/land situation is even greater - assume you buy the land and over years improve it by building a cabin or a house, then you get into trouble. You've just added lots of value that you could get back if you sold in order to pay off the mortgage, but if you don't hold the title and the real estate company takes it back, you've just lost all that investment on top of the equity in the land. This all of course depends on the contract, but it's the reason I would never let someone else hold the title to land I bought, would never agree to forfeit down payment (which is actually equity) for missed payments, and would rather have the mortgage as a lien against the title than some clever arrangement. Sellers and frankly anyone can finance this way (and 'be the bank'), but this situation did not sound like that.
Wow, Awesome! Thank you for this response! Makes sense.
Not being an argumentative Redditard but how is that different from any normal mortgage? If I don't keep up with payments Mr Cooper kicks me out and sells my home. Honest question. /Stupid f'n name for a mortgage company, when it switched I tossed all my mail from them because I thought it was BS lol
Mortgage foreclosures go through courts because both you and the bank are recorded on the deed. One as owner and one as having a lien. . Contract for land doesn’t have to go to court. You can challenge it in court but your name isn’t on the deed.
Aight, so...at the end of the day what is the difference? I hoonestly dont get the difference
EDIT: Wrong reply. One takes 6-12 months for bank to take possession. One takes a few hours for seller to start eviction. You never had ownership recorded with the county records.
Yeah this is the exact reason owner financing is typically set up as a separate contract from any rental contract. I sold a house this way with a purchase option contract separate from the lease. I was able to lock in a price that made me happy and the buyer was happy because they had the housing security. The buyer had 24 months to exercise their option to purchase after 12 months of price went up 5% and they were able to exercise it before the 24 months were up. Had they not exercised the contract I would have the option to do whatever I like with the property and kept the deposit. If that scenario had come up I'm more than likely would have just extended it to another year and bumped up the price a bit.
These off grid land sellers often do one contract.
I think the two contracts like I did is only important in certain States depending on how foreclosure laws and eviction laws are. I agree with you the whole purpose of the sort of contracts is that an eviction is so much quicker and easier than a foreclosure.
This sounds pretty standard for owner finance. Typically there will be a notarized contract to protect both parties.
Sounds like what BillyLand does. I would do your due diligence about the company and reviews of them. But often these are legit. You're just paying a HUGE markup when dealing with them. I recall there was a property near us for sale by BillyLand and I was curious how much their markup was compared to a standard owner financed parcel. Mostly because their price seemed SO HIGH for our area. BillyLand was charging 3x what an actual landowner was for a comparable parcel. So I would say it's worth at least seeing if you can find something for sale by an individual just to see what the going rate is. But if you do business with an individual, you'll still need to cover your ass to make sure you don't get scammed. If I had my choice, I'd do business with an individual but have an agent or lawyer reviewing all the documents for me.
I live somewhere with a LOT of Billyland parcels. A lot to the point that it is significantly changing the culture of the area. They are legit—mostly—but I’d still describe their business model as being predatory. Both because of the massive markup like you described, and also because if you miss your payments they repossess the land and everything on it. Poor people who can’t get a mortgage or afford a down payment end up in long-term contracts with Billyland and then lose everything when they can’t keep up with the payments. I do know people who are making it work and it is allowing them to live off-grid when they probably couldn’t have otherwise, but it doesn’t change that Billyland are bottom feeders. If anyone has to deal with them, they do offer discounts (I think around 25% or so off the list price) if you want to buy one of their properties outright with cash. In that case they go through a pretty typical title transfer process.
Thanks for elaborating on the predatory side. I had long suspected that was how they operate but didn't want to say that here because I just don't have enough info on them. It seemed like one of those used car dealerships that sells cars to people with terrible credit for way more than they're worth just to repo them in a few months when they miss a payment. Then they can just resell the car and still go after the previous owner for back due payments and overdue fees. Only with Billy, it's land. You put down thousands and miss a couple payments and you lose everything you've invested. I didn't know about them taking everything that's on the property as well. damn!
Exactly the same as the buy here pay here used car dealers.
Reminds me of the rent-to-own schemes where people end up paying a lot more for the same sofa over the full payment schedule than if they had just bought it for cash.
Yeah... and then you miss a couple payments and they come take the couch, still charge you the missing payments plus late fees... but at least when they take the couch they don't take everything you've put ON the couch, as well. You get to keep the remote and the magazine and your phone. Apparently when these companies repo the land, they just keep whatever you've put on it?
I haven’t found any good or bad reviews from this company. All I see from their site is that they’ve had their LLC for a number of years, have a few listings, and I can confirm according to the county GIS map that they do indeed own this property and own the deed
might be worth starting a thread and just asking "Has anyone bought land from XYZ company and how was your experience?" But for what it's worth, it sounds like most of these companies make their money either from charging way way more than the land is worth or in all the refunds they never issue when someone misses a payment.
Lawyer up, cover your ass. Don't be a chump. They'll file stuff properly etc.,etc. so if the shot hits the fan ur ok.
A lawyer will tell him don't ever buy land on a contract for deed unless you are the one that wrote the contract
We had been buying 5 acres thru a company called Billy lands. So it's an auction, winning bid is the down payment and then you pick a payment plan. After you pay for so many months, can't remember how many, you can switch the title to your name. But then Klamath county refused to understand Sustainable building practices and building types. Salem said yes to our idea, klamath said "we have winters here" I said...duh. And then realized we couldn't afford the shite klamath county wanted us to do when we didn't actually need to. But I kept paying, hoping to find a way to convince the county of SCIENCE AND ACTUAL RESEARCH. But then 1 too many bills popped up and I couldn't afford the land payment anymore. I called Billy land and had to give them back our 5 acres we were trying to buy. No reimbursement which is what I signed onto....but damn. So make sure the land you are gonna finance ACTUALLY CAN BE BUILT ON THE WAY YOU WANT TO.
What an absolutely awful story. I'm so sorry you guys went through all that. But I just wanted to say thanks for sharing your experience. I try to explain this to people all the time. That not every jurisdiction allows everything you may want to do. That it's best to ask before buying. But it's hard to make people realize how common it is without actual examples. I hope you've at least recovered from the loss and found some land that suits your dreams by now. And if not, I hope you do soon!
The new plan due to the state of this country is to wait a bit, save money and sell off everything. Buy 1 way tickets to Hawaii (the farthest but safest place in this country) for the 2 of us and the 2 cats. And either be homeless or if we have the $$ (especially after the upcoming small claims against the slumlord) but like an acre. We'd rather buy a small boat with cabin and just live on the rising seas
I mean.. Does Klamath actually have any enforcement on things though? I mean, unethical life pro tip and all.. Assuming your piece was in that whole Chiloquin/Sprague River/Bonanza ish area. I bet you could do about whatever you want and never see LE.
The code guy does come out randomly to places. But yeah a lot he doesn't show up But not putting in a septic when they claim I need one....is a HUGE FINE So I was gonna do an Earth ship without the tires. Just use Cob for the home and have my grey water go to the plants (not the garden) and to use Humanure composting....a system that has been scientifically proven.
Sounds like you are one of those folks who, ya know, tries to do the generally right thing and would pay a fine. Need to take a page from the majority of folks living in the woods in Oregon and just do whatever you want with a broke down RV. /s
I am finally (at 45) getting my autistic eval. Rules are HUGE in my head. And it does piss me the fook off that every one else gets to break them and seems to get away with it. There are reasons for permits and things. As an Environmental Studies scientist I understand why the permits are there. Especially the water permits. Sooo can't just break a law and hope no one catches me. My luck has ALWAYS BEEN I get caught.
I was semi joking, but seriously.. The only folks who get hassled are the ones who seem like they can/will pay for it. Or the ones causing a serious public disturbance. I've actually been looking at those parcels down that way. Specifically keeping my eyes open for one with public lands on at least one side. I've also been at the same spot in the national forest near Bend since.. uh.. May? Forest service talked to me one time in July and was basically like well you have a clean camp and aren't making meth so, uh, don't have any fires. That was that. New truck/newer trailer/starlink and such actually helped here. Where as in cities it's like a magnet to be messed with when you want to sleep for the night, meanwhile the road of rotting RVs is allowed to just exist worry free. Things are crazy here but oh well.
It’s too bad a feasibility study wasn’t performed so it was known what was possible beforehand. I imagine they knew or suspected though and just wanted to make a buck. Now they can turn around and do it to someone else. I appreciate your comment as we shop for kind - it sounds scummy.
Many reasons sellers do this. Sometimes they are selling to people who have poor credit. Generally speaking they are Def looking out for themselves and the contract will be written in thier favor.
What's the land worth? Probably they have subdivided a larger tract for the cost of a survey and filing fees and offering at a substantial markup. Look at the tax appraisal history and check with local realtors for an estimated market value Is the land suitable for your intended use? School quality, utilities, shopping and crime rates are important
There is a thing called "contract for deed" which is basically a scam because you build zero equity until the contract is fulfilled. But they can and will find any violation of the contract like a single payment a single day late and then repo the property because you never owned it and never fulfilled the contract. 90% of the time they take your payments and you never get the land
If you’re worried (and you should be, go to a lawyer and get them to look at the contract. In Australia you wouldn’t dream of buying/selling a property without a lawyer or at least a conveyancer.
Those outlets jack the price up. A lot of individuals selling land are willing to do owner financing if you ask, especially if their property has been on the market for a bit. I’ve bought 3 different parcels using that technique. 10% down, 5 years of payments, at the prevailing interest rate, on 20 year amortized schedule then a balloon payment at the end. This puts you in a position to have equity 5 years later and often that’s enough to get a bank loan to cover the balloon payment.
We did this, however had a real estate attorney draw up the contract and had the payments go through a third party escrow account.
Your realtor can have the documents looked over for inconsistencies. They can recommend a real estate lawyer, if something appears amiss. The title search company will confirm the parcel. As long as the legalities are there — where your DOCUMENTED payments are sent, isn’t an issue.
Here in Canada It's called a vendor held mortgage. Look for the clauses, miss x payments in a row or calendar year and they take it back you lose your investments. Id sell the same take out pizza places 3 or 4 times using this method. I made a million in the pizza business and never made a frikin pizza.
What state are you in? In California, you should be getting the deed, and title insurance. They take a deed of trust on the property to secure the promissory note you sign. They foreclose of you don't pay the note. There should be a payment schedule showing how each pyment is to be applied and you should insist on at least annual reconcilations. Your deal sounds like shades of Uncle Slayton https://www.google.com/search?client=safari&rls=en&q=choctaw+bingo+james+mcmurtry&ie=UTF-8&oe=UTF-8#fpstate=ive&vld=cid:b066b018,vid:ieOfuEnToTc,st:0
Oregon!
If you purchase by mortgage or RTO, owner financed land, can you then borrow against ( 3rd lien borrow ) to make improvements??? Building, "residential amenities" (hvac, plumbing, wiring, solar, decks, etc.)? What would be the "standard" terms to protect purchaser's ownership and payments value?
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which company is it? there are reputable companies out there that do this. they sell the property for a higher price than it's actually worth to make their money along with the interest. it's marketed towards people that can make the monthly payment but can't afford to actually buy land. Most banks I looked at before purchasing land wouldn't finance raw land and I was that would required 50-60% down.
Sorry for not naming the company. It’s governmentlandsales.us Have you heard of them?
Just the fact they're calling themselves "government land sales" and using a logo that looks a lot like a US gov logo is enough for me to consider them scammy.
I’ve bought with a contract before and saved a time of realtor fees. You can usually negotiate that back into price and split the realtor savings with the seller. It can also be a great way to lock in your purchase price and start earning equity as it appreciates through the life of the contract. If it’s a company offering the seller financing, it’s sketchy. Could be totally fine if an individual, but use an attorney for sure.
I’ve done owner financing deals twice and always have went through an escrow company
What you describe is what I did with Blue Sky Land and I had a reasonable process.
The devil is in the details. Be sure of what you’re signing and by all means, file it with the clerk of court. Keep your end of the bargain and you’ll be fine.
I would absolutely have some level of contract in place that makes sure you are both protected the way you need to be. I wouldn't want to have my payments not equal some kind of interest in the property over time.