Dave Says: Don't Use a Land Contract

Dear Dave,

What's your opinion on buying a house on a land contract?

Keith

Dear Keith,

I would never, under any circumstances, ever buy a property on a land contract.

In some places this kind of thing is called a "contract for deed," but the problem is you don't have the deed. The property is not in your name. You could easily run into a situation where you've paid the balance down for 10 years, then the guy you're paying gets into a car wreck or another kind of financial trouble and someone slaps a $500,000 lien against the property that's supposed to be yours.

Don't pay for property that isn't in your name, Keith. Land contracts, or contracts for deed, are dangerous for the buyer and just plain stupid!

—Dave