How is it possible for me to repurchase my home back on a Land Contract after it has been foreclosed?

Homeowners in Michigan may sell after foreclosure with proceeds first paying off the amount of the foreclosure sale. It is important to remember that ownership is not transferred from the home owner until the end of the redemption period. It doesn’t matter if a third party purchased the home at the sheriff’s sale or if the home sold for less than the amount owed on it. The home belongs to the homeowner until the redemption period expires.

We may be willing to purchase the property from you, including your redemption rights and redeeming (paying off) your foreclosure. Once this process is complete, we will have clear title. We then sell the property back to you on Land Contract.

When Does the Buyer Become the New Owner of the Land Contract Property?

While the buyer is making payments to the seller, the buyer is considered to have an “equitable title” to the property. As an equitable title holder, the buyer has an interest in the land contract property and the seller is precluded from selling the property to a third party or subjecting the property to a lien or encumbrance that would interfere with the buyer’s interest in the property.

The “legal title” to the property remains with the seller until the buyer makes the final payment. When the final payment is made, and all conditions of the land contract are met, the deed to the property will be filed with the appropriate government office, such as the county register of deeds, naming the buyer as the new owner of the property.

What Happens if the Buyer Fails to Make the Land Contract Payments Due?

If the buyer defaults on the land contract, or fails to make the monthly payments to the seller as required, the seller can file a court action called land contract forfeiture. Forfeiture will result in the buyer “forfeiting,” or giving up, all money paid to the seller for the property pursuant to the land contract and the equitable title of the buyer will be extinguished. In other words, if the buyer fails to pay, the seller keeps all money received, plus the seller keeps the real estate.

The seller takes a risk selling by land contract because the seller does not receive the full purchase price at the time of sale, but a forfeiture right protects the seller from a buyer who fails to pay allowing the seller to keep payments and a usually large down payment made by the buyer while retaining the property to offer for sale to someone else.


Advantages of Buying a Home on Land Contract

With lending guidelines being pretty strict, it can be tough to get a mortgage if you have had credit issues recently, or have a unique income situation. A land contract may be your only option if you’re looking to buy in some cases.

This is great because it still gives you the opportunity to own your home! You can do upgrades, have pets, and live the American dream. It’s your house.

The Basics of Land Contracts

A land contract is a written legal contract, or agreement, used to purchase real estate, such as vacant land, a house, an apartment building, a commercial building, or other real property. A land contract is a form of seller financing. It is similar to a mortgage, but rather than borrowing money from a lender or bank to buy real estate, the buyer makes payments to the real estate owner, or seller, until the purchase price is paid in full.

A buyer and a seller both sign the land contract covering agreed upon terms and conditions of the sale. Upon satisfaction of all contract terms and conditions, including payment of the purchase price over a specified time period, the legal title of the property transfers from the seller to the buyer by way of a warranty deed, or other deed used to convey title.




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