Hi all- I’m fairly new to the group and this is my first time really digging into the forum which is an amazing source of information. I catch myself loosing focus and reading thread after thread of all the questions and comments. You can really fall down a rabbit hole in here, I love it! I recently purchased a small lot in New York and have it listed for sale. I received multiple requests for seller financing and I’ve been reluctant because I just want to sell the land for cash and move on. However, now I’m starting to entertain the idea and I have a few questions for the group:
Has anyone sold land in NY using seller financing? Are there legal parameters to do so? Can anyone share an example or template on how to structure a deal? Also, what conditions do you add to the contract? Are the buyers allowed to cut down trees? Build? Make improvements?
I appreciate all the help I can get on this topic. Thank you!
Congrats on your deal @longviewland59! I hear you on the seller financing issue. I've never done seller financing in New York, but whenever I'm looking at this kind of thing in a new territory, I'll pay an attorney to make sure it's done right the first time, and as part of it, I'll request their templates so I can do future deals myself (even if I have to pay more for it).
The idea is to have an educated set of eyes looking at everything on your first go-around, so they can answer these questions for you and make sure you're catching any potential problems.
In terms of what conditions to add in the contract, you can see all of my standard conditions in the downloads that come in Module 8 of the course. The wording of the contract and/or purchase agreement will probably vary from state to state, but just in terms of what you do and don't want to allow the borrower to do, you can see all of my suggestions in those templates.
@longviewland59 , I live in NY and I have purchased with owner financing (Subj-2, and traditional owner financing), but never sold that way. If you're worried about owner financing property here, I'd be worried too. The courts favor the uninformed residents and tenants over the "big bad" investors and landlords. If you sell an "owner occupied" property with owner financing, the wrong (evil) buyer can fight you and claim equitable interest in the property and fight/force you into having to foreclose, which takes a very long time here. But, I'm not sure about raw land, I don't work this area. Also some areas of the state are better for investors than others. Namely, the further away from NYC, the better, Where is your lot? Maybe I can help you in some way. Let me know.
@longviewland59, did you ever get your questions answered? I'm making my first purchase in NY and while doing some pre-sales I had people asking me for seller financing. I believe I have a cash buyer lined up so it shouldn't be a problem this time, but it's always good to plan for the next deal. My big question is whether a land contract for a vacant lot would be treated as a mortgage in NY requiring a cumbersome foreclosure process if the buyer defaults.
@rawlandholdings @PaulB Hi guys, thanks for the follow-up responses. I spoke with my attorney regarding seller financing in NY. We determined an Installment Land Contract was the best option because there is no foreclosure process due to the lack of an interest rate and amortization schedule. I'll give you a breakdown of the contract the attorney drew up: The buyer would place a deposit, the balance would be paid in installments for the term with the right to prepay. Possession would be given to the buyer on the final payment of the property. The buyer would go into default if payment wasn't made within 30 days. If and when paid in full the deed would be transferred within 30 days of the final payment.
Fortunately, I accepted a cash offer on the land and didn't have to use an Installment Land Contract (thank God because NY is a difficult state to remedy if the buyer defaults). If anyone wants a copy of the contract send me your email address and I will share a copy with you.
@longviewland59, thanks for the update. I treat all of my notes as installment payments, no interest, pay-off anytime so this would seem to fit my MO. It does seem at odds that a land contract is okay, but it would be difficult to get the land back if the buyer defaults. It's not a case of just sending them notice after the default and taking it back? I guess the better person to ask is my real-estate attorney in NY, but it's good to hear the experiences of those in the business.
@longviewland59 (Jason), I would love to see the contract. I'm very interested to see the wording. I didn't know that an installment contract helps you get around a foreclosure process. I'd also like to understand why (if that's true) you're concerned about NYS in the case that you have to take the property back. Are you recording the contract? I wouldn't do that, and I'd state within that the contract is null & void if recorded (I've seen that in a guru contract somewhere).