When banks won’t lend: seller financing

Land contracts are here again?

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DEAR BERNICE: I live in Colorado. I was talking to one of my friends who lives in California. He has been hearing about "private" sales out there, especially in the higher price ranges where financing is hard to obtain. What is a "private" sale and are these legal? --Bill A. DEAR BILL: I suspect what your friend is referring to is something called a "land contract" or "land sales contract." Given the lack of financing in the jumbo loan market, this may a viable option for some sellers in this market. Land contracts were used extensively in the early 1980s, when home mortgage rates jumped to over 18 percent. All land contracts involve having the seller carry part of the financing. Since 35 percent of all homeowners own their property free and clear, seller financing can be an attractive option for those who must sell. When the seller finances the sale, there are normally no points or fees. This saves the buyer money. The deeds and othe...