Is a land contract still a viable means of purchasing a home? The answer to the question is, is that Florida does not have land contracts.
I know Michigan has land contracts and any number of other states. And the reason why many people use land contracts is that they’re in a state that has a non-judicial foreclosure statute which allows them to foreclosure, or get the property back through non-judicial procedures. Florida is a judicial procedure state which requires you to go through a court proceeding to foreclose and take back property. And so a land contract, the closest thing we have to it in Florida is called an agreement for deed. An agreement for deed is the same as – has to be enforced the same as a note and mortgage and therefore you don’t see too many agreements for deed, because although the seller retains the title to the property and puts you in possession, if the buyer defaults they still have to go through a foreclosure process and so it defeats the purpose of using a land contract.
The other way of avoiding going through a foreclosure process if you’re the seller, and the buyer has a very small down payment, is to go with a lease with an option to purchase. And that way if the buyer defaults in the payment, you’re then in a position to evict them rather than going through a foreclosure process, which is much quicker and less expensive than a foreclosure process. It’ll probably take six, nine months to a year to foreclose a piece of property and costs and anywhere from $4,000.00 to $5,000.00. Whereas with an eviction process you’re looking at probably 30 to 45 days and approximately $1,500.00 to $2,000.00 for an eviction process. So if you talk land contracts in Florida, they’re gonna look at you with a blank stare, because it’s something that comes out of the Midwest or a state that has non-judicial foreclosures, and they are so you don’t have those in Florida.
If you have any questions about land contracts or buying and selling real property with owner financing, well give me a call at 727-847-2288.