I sold a house on a land contract. They stopped paying an i went to court an i get possession back on nov 3 unless they pay the now 4 months of back payment . well just seen they listed the house for house for sale an there agent called me. He says they might be selling it on a land contract. I told him they cant sell the house to someone else on a land contract an that i am enforcing the acceleration clause if they are 30 days behind i want entire balance paid off. They cant sell it can they? Or is this a call my lawyer question?

You might talk to the judge or a competent lawyer who knows about this in Michigan.

There are a couple things you might consider.

1. Depending on the language in the contract, he might be able to assign the contract, be paid for his equity if there is any and have the new buyer make up the payments to you. If you have language in the contract forbidding that he likely can't do it unless you approve or you can call the note. If the new buyer is more reliable, you might allow it if it's to your advantage.

2. You might consider selling the contract to an investor who buys land contracts. There are many around. Usually they will want a minimum of 30K or so and a history of payments over several months. If the payments are behind they may buy it but you will get a lower price.

To be clear, a Buyer "CAN" do a lot of things...and a Seller "CAN" have a lot of responses based on what a Buyer does.

Here's an example:

Let's say a Sellers own a house that has a lien against it. Seller sells it to Buyer and they do it via a handshake and a wad of cash deal. Seller writes a Quit Claim to Buyer and Buyer files it. Done. Title transferred.

But....

Buyer doesn't get title insurance or a title search: he's one of those old-fashioned "spit shake" and done guys. Seller takes his money, quit his job, sell all his worldly possessions and moves from Missouri to Las Vegas and blow every penny he has at the tables and living like a party animal, he leaves no forwarding address, and he stops paying his loan.

Meanwhile, the Buyer happily moves in.

90 days later...delinquency notices are flooding the mail box. The new owner senses "something isn't right." The bank begins foreclosure and eventually wins and kicks him out on the street because they had a lien on the house that wasn't paid off since the Buyer and Seller did everything out of the public eye and outside the normal processes that prudent buyers and sellers of real estate use.

The Seller just screwed him, but remember this was because the Buyer didn't do his due diligence and ensure to get CLEAR TITLE, TITLE INSRUANCE, etc. And the Seller was a disreputable person. Go figure.

Think stuff like that doesn't happen? ;-)

How will the Buyer ever get his money back? He can't find the Seller who is working construction jobs "under the table" and not filing his taxes, and besides he already spent all of the money on booze and gambling. Even if Buyer does find Seller, what is there to take?

Just another crazy day in real estate, according to the Title Agent I spoke with today at a closing. Folks are buying houses and showing up to closing to announce that they just "quit my job but I have a new one lined up" then they wonder why their lender stops the closing?

People are weird. They lie, cheat, and generally CAN do a lot of stuff. Your ability to get justice lies in the courts. YES, your Buyer can sell that house to an unsuspecting person who doesn't handle real estate in a prudent way. Then you will get to clean up the mess. I hope you got a hefty down payment because it can end up costing A LOT to undo the stupid things some folks do.

Are there imprudent people who buy real estate in this world? Oh yes.... Will the person you gave the Land Contract to get in trouble? Maybe, IF you can find him, sue him, win, and then collect.

Robin, I bought my first 8 properties on a land contract. Every single one worked out perfect for both parties . I do agree that the seller is taking a chance that the buyer will do the right thing if not it will be the seller that has the problem.

James,

Absolutely get a lawyer involved.

Property laws are not always common sense and there are details which can bite you big time.

Was this foreclosure or eviction? Evicted on a LC??!

The LC buyer can come back and demand repayment sometimes. In Indiana I have to refund every penny they paid me, even the money I used for taxes and ins.

Like Vee said, I was under the impression that after Dodd-Frank, you basically had to foreclosure to get these back now. That's why everyone now says that they are a bad idea for sellers. (Unless you do complex things -- where you do a completely independent lease agreement along with an option-to-buy sort of thing.)

- John...