Unformatted text preview: copy of the report prior to or at the time he or she enters into a contract with the seller, the purchaser may terminate the contract by notice to the seller. The purchaser must sign a statement that he or she has received a copy of the property report. CHARACTERISTICS OF LAND SALES CONTRACT
Parties – The parties to a land contract are vendor (owner or seller; extender of credit) and vendee (purchaser or borrower, “equitable owner”). Resale – Either party may transfer the property. • • The vendor may sell the title but must assign the contract Vendee may assign or sell the property unless the contract prohibits it. Prepayment or sale which may prepay the loan can be prohibited only up to 12 months from the date of contract. Encumbrances – Both parties may encumber the property, within limits. If a contract is unrecorded, the vendor may encumber the title subject to the following: • if all encumbrances (existing and new) will exceed balance due on the contract, written consent of the vendee must be obtained. Payments on a trust deed cannot exceed the payment due from the vendee on the land contract unless vendee consents in writing. • 9-44 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 9: FIXED RATE MORTGAGE AND ALTERNATIVE MORTGAGE INSTRUMENTS
• • Payments received from the vendee must first be applied to any payments due on existing trust deeds. The vendee may encumber the equitable interest but cannot use legal title as security, and may homestead the equitable interest. Reasons for Use – Land contracts are used by the California Department of Veterans Affairs in Cal–Vet purchases. Other circumstances for using them might include: When a buyer does not have sufficient down payment or credit for a traditional loan During a tight money market where traditional loans are hard to get. When seller does not wish to give legal title or buyer does not wish to receive legal t...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10