So what does a well-written Ohio Land Contract look like? What legal language is included? Let’s take a look at the key provisions of a strong sample template.
CRITICAL TEMPLATE ITEM #1: List the Parties and Property
A Land Contract must accurately reference the parties who are selling and buying the property, and the Contract must specifically describe the property being sold. Using the legal description of the property (which is usually a “metes and bounds” or plot map description created for the property by a surveyor and adopted by the County Recorder as the official description of the parcel), along with a brief listing of any building or structures, provides clarity on what is being sold and avoids confusion when the property is ultimately transferred to the Buyer. Sample language:
THIS AGREEMENT, made at Somecity, Ohio effective as of the 12th day of January, 2014, is by and between The Joseph Smith Revocable Trust, Dated May 1, 2008, Joseph Smith its Trustee, whose address is 555 East Main Street, Anytown, Ohio, 44444 hereinafter referred to as “Seller”, and Robert B. Jones, a single man, whose address is 850 Broadway Blvd., Anytown, Ohio, 43434, hereinafter referred to as “Buyer”, upon the following terms and conditions.
A. Agreement to Sell; Agreement to Purchase. Seller has this day agreed to sell unto Buyer and Buyer has agreed to purchase from Seller premises located at 789 Ash Street, Anycity, State of Ohio, the same consisting of the real property upon which is a house, a a barn and a small storage building (all of which are included in the sale) and more particularly described as follows:
Commencing 618.5 feet East of the Southwest corner of East ½ section, thence North 181 feet, East 150 feet, South 181 feet, West 150 feet to place of beginning. Section 13-9-2. .62 acres.
Anycity, Any County, State of Ohio. Commonly known as: 789 Ash Street, Anycity, State of Ohio
Tax Parcel ID No: 012-234-6789
all of which being hereafter referred to as the “Property”…
CRITICAL TEMPLATE ITEM #2: Be Clear on the Price and Payments
The Land Contract must also accurately reflect the purchase price being paid for the property — and the price and payment terms fully negotiated by the parties. The price can be paid in a lump sum, paid in equal monthly installments over time, or can provide for monthly payments for a modest period of time followed by a balloon payment which pays the balance of the price in a lump sum. Sample language:
Payment of Purchase Price. Buyer shall pay Seller for the Property the purchase price of One Hundred Thousand Dollars ($100,000.00). The purchase price shall be payable as follows:
1. Buyer shall pay to Seller the sum of One Thousand Five Hundred Dollars ($1,500.00) on or before the execution of this Land Contract.
2. The unpaid principal balance of the purchase price, Ninety Eight Thousand Five Hundred Dollars ($98,500), together with accrued interest on the declining unpaid balance at the rate of seven percent (7.0%) per annum from the date hereof amortized for a term of fifteen (15) years, shall be paid, without demand from the Seller, in consecutive monthly installments of Six Hundred Fifty-Five Dollars 32/100 ($885.35), beginning on the 1st day of June, 2015, and continuing on the same day of each month thereafter, for thirty-six (36) consecutive months, and upon the first day of the month following the last month of the above described consecutive months, the entire principal balance of the purchase price, Eighty Six Thousand Nine Hundred Seventy-Six and 39/100 Dollars ($86,976.39), shall be due, owing and paid, in full, to the Seller (see amortization schedule attached hereto). The Buyer shall be permitted to pre-pay the principal balance of the purchase price at any time, without pre-payment penalty…
CRITICAL TEMPLATE ITEM #3: Make the Payments, Get a Deed
The Land Contract will clearly state that the Seller shall provide the Buyer with a Warranty Deed upon payment of the entire Purchase Price. Sample language:
Delivery of Deed. When the purchase price and all other amounts to be paid by Buyer pursuant to this contract are fully paid, Seller shall convey the Property to Buyer by Warranty Deed, warranting good and marketable fee simple title to the Property, from the date Seller obtained title to the Property, free and clear of all liens and encumbrances whatsoever, except for the following: Those which have been created or assumed by Buyer; zoning ordinances; legal highways; covenants, restrictions, conditions and easements of record; and the lien of real estate taxes and assessments not then due and payable. There shall be a pro-ration of taxes based upon the terms hereof on the date the Deed is delivered to Buyer.
Of course, this is just a sample of the key pieces of a Contract for Deed template; the contract document framework and a number of additional provisions make up a complete Land Contract.
Remember that standard accepted contract language and state law can change, which means the template changes, too.
CRITICAL TAKE-AWAY: relying on a free Land Contract document found on the internet is not a good idea when hundreds of thousands of dollars are at stake. Why let the success or failure of your real estate transaction hinge on a real estate legal document of unknown origin?
Free documents found on the internet can be incomplete, poorly written or legally incorrect just on their face. But even a well-written document from a year or two ago can be outdated when it’s not being maintained by an experienced attorney or legal document company.
So don’t be penny wise and pound foolish when it comes to the real estate purchase agreements you use for your seller-financed home sale.
To see options from reputable legal companies, see the following pages for information on: