A Land Contract Home Buyer Orientation

Table of Contents
What is a Land Contract? 2
Common Land Contract Terms & Expectations 2
As-Is Sale 3
Payments, Late Payments & Forfeiture Notices 3
Fees 4
Blight Violations & Squatters 4
Reasonable Contact 4
Land Contract Cancellation 4

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Who is ValueDetroit?
ValueDetroit is a service company that facilitates communications between you and the Seller of the home you’re
buying on land contract. ValueDetroit is not the Seller or owner of any property.

What is a Land Contract?

It’s not a rental. You’re buying a home. The land contract is both an interest-bearing loan agreement
between Buyer and Seller, and the Seller’s promise to convey ownership to the Buyer upon completion
of payments. The document explains the nature of the relationship and the responsibilities each has to
one another. Your land contract is broken down into different sections for ease of reading:

 Signature page: defines the property and contract participants;

 Attachment A1: Payment terms and contact data;
 Attachment A2: cover the specific and unique financial terms agreed between parties;
 Attachment B: contains more detailed other terms including fees, how to make payments,
Buyer’s responsibility in various areas such as maintenance of property, utilities, blight,
property taxes, etc.

Common Land Contract Terms & Expectations

Most of the items below, are summarized highlights from Attachment A1, A2 or B of the land contract.

 A down payment must be paid in full to complete the signing.

 Loan payments: The term “loan payments” in the land contract refers to a combination of
principal and interest due each separate pay period. A pay period typically but necessarily a
month.

 Payments made each pay period: Would include “the loan payment” as described above +
possible “fees” (like late fees if applicable) or possible debts that the Buyer is responsible for
such as blight fines.

 Contract term length: Every contract has a term length defining the number of payments and
the amount for each payment. The actual length of time it takes to pay off the loan defined in
the contract could be shorter or longer than what’s written based on Buyer paying behavior.
Early payments are allowed and will shorten the time necessary to pay off the loan. Late or
partial payments and associated fees, may lengthen the time a Buyer needs to pay off the loan.

 Transfer of deed: The signing of deed transfer documents may be scheduled after all debts have
been paid, and all relevant issues between Buyer and Seller have been settled.

 The total amount paid by the Buyer: This will be a combination of the down payment + the loan
amount (principal) + interest (the percent being charged for the principal loan) + any fees or
unpaid home owner related debts incurred by the Buyer over the course of the contract. A
Buyer (you) may reduce the amount of interest paid and the length of the contract by making
early payments and by paying more than the required contractual amount from time to time.

 No balloon payments. There is no balloon payment in the contract. Payment terms are defined
in the contract and what is written there is what you should plan to pay.

 Insurance Policy for Property Structure. The Buyer is responsible for finding and paying for the
property insurance. Any policy must be created with the deed holder as “primary insured” (deed
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 holder name is on page 1 of the land contract document) and the Buyer’s name as “secondary
insured”. Buyers must fulfill certain requirements outlined in the insurance policy terms, or the
insurance company won’t pay out the policy if that scenario should arise. For example,
properties must have functioning smoke detectors and fire extinguishers installed properly
throughout the home. If there’s a fire, and these things have not been properly installed, the
insurance company will not issue a payment and all insurance policy money will have been
wasted.

 Repairs on the property: This is described in attachment B. As a summary, the Seller must
approve of all major changes before they commence, and may need to be involved in the
planning process. Always contact the Seller to discuss your plans and expect Seller involvement.
The Seller will not try to prevent good or minor repairs, but must also decide (and has the right
to decide) that they are beneficial, and not a threat to the structure of the property.

 Inspections: Seller reserves the right to inspections of the property as described in attachment B.
By signing the land contract, you agree to allow inspections upon request, and to coordinate
with us so that such inspections may be performed.

 Valid Agreements: Any spoken perceived agreements or promises which haven’t been stated
in the land contract document, shall not be part of the Land Contract Agreement. If the Buyer
believes something is missing from the agreement, they must make this known and resolve it
with the Seller before signing. All parties shall be bound by the signed Land Contract. If new
agreement terms are desired after the land contract has been signed, both parties must be
willing and able to addend the original land contract.

As-Is Sale
You are buying a home in “as-is” condition. After signing the land contract, the Buyer is responsible for
the property and any problems that may be discovered. The Buyer is responsible for inspecting the
property before the signing and may hire a professional inspector. The Buyer should never expect the
Seller or Value Detroit to be responsible for making or paying for repairs that are not agreed to in writing
within in the land contract. The Buyer (you) should enter the agreement with the assumption that there
could be any number of problems which may arise with the property. Seller is often not aware of repairs
that could be made to a property before a sale, because the Seller does not generally perform certified
inspections of the home prior to a sale.

Payments, Late Payments & Forfeiture Notices

 The first payment date is indicated in your land contract.
 Payments are due on the last bank day before the first of the month. The Seller may or may
not allow a grace period. If not received on time, a late fee will be applied. Fees are described
in Attachment B.
 If payment is not received by the 12th of the month, a forfeiture notice is sent. This is an
automatic process which allows the Seller to operate in a professional manner, and to ensure
better service. Buyer has a right and opportunity to pay off debt after a Forfeiture Notice has
been received.
 Please communicate openly, keep all contact information up to date, and commit to paying
on time to avoid forfeiture. Sometimes a temporary, alternate payment plan may be arranged
with the Seller.

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Fees
The types of possible fees are described in Attachment B of your contract. The most common types
of fees are:
 Late payment fee: any payment not received on time is considered late. ($50 per instance)
 Failure to label the check/payment ($35 per instance)
 The accumulation of utilities debt ($50 per instance)
 Receiving blight tickets for maintenance or property related issues ($50 per instance and the
cost of the fines, if applicable)
 If the Seller is forced by the municipality or utilities companies to pay homeowner debts on
Buyer’s behalf ($50 per instance)

Blight Violations & Squatters

Blight tickets pertaining to the Buyer’s maintenance and upkeep of the property, are the Buyer’s
responsibility. The city publishes guidelines with blight requirements, so stay informed to avoid
violations. Buyers are also responsible for squatters and utilities used by squatters. The property
should never be left vacant - even if the owner has to be away for longer. If any blight tickets are
received at the property, the Buyer should let us know as soon as possible. They could be sent by mail
or posted on the door. If a Land Bank notice is posted on the property, the Buyer should not call them
and should instead contact the Seller immediately. These can be very serious. Any vacant property
must be registered as vacant with the city and a vacancy compliance certificate must be posted in the
front window of the property.

Reasonable Contact
You should expect to receive email notices and notifications regarding Land Contract related matters.
Please have a working email or phone number, and be responsive to any attempts to communicate
with you about your Land Contract. If any of your contact information changes, please let us know
right away how to reach you.

We will only try to reach you during business hours (except in the case of emergencies) or at times
otherwise decided between the parties (mutually agreeable). If you can’t be reached through
provided contact methods, we may come to the property during normal hours to deliver messages.
ValueDetroit personnel will never enter the property without advance warning, or unless you are not
responding, or if there is an emergency.

Making Payments
ValueDetroit representatives should absolutely never ask for cash payments. If this happens do not
pay, and please contact us immediately at the contact information provided in your land contract:
office@valuedetroit.net | (313) 312-9420. If you fall victim to fraud and give your monthly
payments to a fraudulent party, you will still be held responsible for any missing payments. So
please, do not pay anyone claiming to be one of our representatives. Make payments only via one
of the approved payment methods described in Attachment B of your land contract.

Land Contract Cancellation

If for whatever reason you decide that you no longer want to be bound by the terms of the land contract,
you can request that a land contract cancellation be granted. If the Seller agrees, then an appointment
may be scheduled to perform a forfeiture of the land contract agreement.

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Recording of Land Contract Memorandum
After the Buyer has successfully paid on time for 2 years, and if their account is current (carrying no debt),
they are welcome to contact us about collecting the necessary paperwork for recording the land contract.

Signatures
The below signatures are a declaration that the Buyer has received a copy of this document, and has been
given enough time to read and discuss the content of this document with the Seller or any other chosen
party.

___________________________________________ __________________________________
Buyer’s signature Date:

___________________________________________ ____________________________________
Seller’s representative signature Seller’s representative name

*It is recommended that the purchaser seeks assistance from a lawyer or other qualified person regarding their Land Contract.

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