Consumer Law, Warranties Land Contract v. Mortgage

[LPM5992]

My mother in law resides in Michigan, where a common part of their real estate culture is the use of land contracts. Being licensed as a broker in upstate/western NY, this is a type of purchase I have never seen used.

Could someone please explain the difference between land contracts and a private mortgage ? It's my perception (perhaps a mistaken one) that a mortgage document provides the mortgage holder stronger protections, and is much more a unilateral agreement than a land contract.

So why would someone choose to sell a property (especially a valuable one) on a land contract, rather than holding a private mortgage???

Thanks in advance for any assistance you can offer.

 

[Michael Wechsler]

I'm not sure what a "land contract" is specifically, but I have heard the term with reference to installment payments with regard to the purchase of land. The mortgage agreement is usually seperate. I believe that this is used when the seller provides the financing for the transaction, rather than a bank.

There are several reasons why I would prefer not to use a land contract, since it doesn't seem to be a "clean" transaction -- although it may have it's advantages, depending upon the situation and the terms.