Marjorie Youngren Team's Blog
A land contract and a mortgage have a number of similarities. For example, you can use either option to purchase a home Both loans must be repaid on a monthly basis.
Understanding the Differences
A land contract is a legal agreement between a buyer and a seller. Rather than a traditional mortgage scenario with a bank, the seller becomes the lender. The buyer and seller agree on a price for the home then negotiate terms and a payment schedule.
In many cases, these repayment terms follow a schedule of monthly payments much like a mortgage. However, a balloon payment for the remaining balance is often due within three to five years. At that time, you would then obtain a traditional mortgage to fund the remainder that's due.
Land Contract Risks
While it can seem like a land contract would be an ideal way to secure a home, it does involve risks you need to know about. A land contract can be a way for you to close on a home if you aren't able to qualify for a mortgage that covers the full cost right away. The three to five years that a typical land contract lasts can give you time to improve your credit and increase your financial soundness.
Before you agree to a land contract, though, be aware that the property is not yours until you make the final (balloon) payment. This means that if you make any improvements to the property during that time, you could potentially be out of your investment. You are also not building up any equity in the home during the time that the land contract is in effect.
At any point during the land contract, your position as the buyer could be compromised. For example, the seller is the legal owner of the property until the contract has been fully paid. If they experience financial problems and lose the property, you would have no claim to it and would forfeit your payments.
As the buyer, you are obligated to meet your payment agreement. If you don't do so at any time during a land contract, the deal ends. The property stays with the seller and you are out the money you've invested.
Advantages of a Mortgage
With a mortgage, you must pay property taxes and honor your obligations to the lender. As long as you do so -- and avoid liens -- you have legal recognition as the property owner.
A land contract can seem like an attractive alternative if you don't think you qualify for a traditional mortgage. Before agreeing to one, though, be sure you understand the pitfalls that could be involved.
One of the most important things you can do before you list your home for sale is to stage it. Home staging refers to arranging the home’s furnishings and decor so it looks as good as possible. In other words, you use the decor and furnishings to make the home look like a showroom, so buyers walk in and feel instantly at home. This can help your house sell more quickly and for a better price. If you’re interested in starting the home staging process, here’s how to do it.
1. Tackle the Clutter
Clutter is the enemy of a fast home sale. It makes a home look crowded and unkempt. Purge and clean until your home looks as empty as possible. This may mean sending some items to storage while the home’s on the market, but the more you can get out of the house, the better.
2. Arrange the Furniture Well
Next, change the arrangement of your furniture. Often you will need to remove some pieces to make the home look larger.
In the living areas, pull couches, chairs and tables away from walls to allow them to float in the room. This actually makes the room look larger and inviting. Use an area rug to create a chatting area.
In bedrooms, make sure there is plenty of space on the floor showing. Get rid of a nightstand or dresser if you need to temporarily, so the home looks larger.
3. De-Personalize the Home
As you go through your home to stage it, look for things that are highly personal to your family. Family pictures, children’s artwork, or an heirloom item that has meaning to you, but does not add to the home’s look, can all be removed. You want the home to look and feel like a perfectly staged model home, not your personal, comfortable space.
4. Keep it Neutral
If you need to paint a room or add a piece of decor, make it as neutral as possible. Again, this will help buyers feel at home, no matter what their personal tastes may be. Bright colors are best avoided when staging a home.
5. Clean and Repair
Cleaning your home as you stage it is unlike any other cleaning you have done. You need to clean it as deeply as you can so that it shines from top to bottom. This shows that you take care of your home, and makes buyers feel more confident that they won’t be purchasing a lemon. In addition, patch and repair anything you find, including holes and scratches in the paint.
Staging a home is a bit time consuming, but the rewards are worth the effort. About half of all buyers’ agents report that home staging changes how a buyer views a home. You want the buyer to have a positive experience in your home, so stage it well!
360 Andover Street, Danvers, MA 01923
360 Andover Street, Danvers, MA 01923
More Info on this Property | New Listing Alerts