The Land Contract Trap I’ve Seen Too Many Times
In 25 years and over 1,700 properties, I’ve watched dozens of families enter land contracts thinking they found a shortcut to homeownership—only to lose everything three years later when they couldn’t make the balloon payment.
I’ve also seen sellers get burned. You carry the paper, collect payments for years, then discover the buyer trashed the property or stopped paying taxes. Now you’re stuck foreclosing on your own house.
Land contracts sound great on paper. But after two decades of cleaning up these messes, I’ll tell you straight: they work for banks and investors—rarely for families.
If you’re considering a land contract because you need to sell fast or can’t get traditional financing, there’s a simpler way. Let me show you what I’ve learned the hard way.
What Is a Land Contract? (And Why It’s Usually a Trap)
A land contract—also called a contract for deed—is seller financing. The buyer makes payments directly to you. They move in and treat it like their house. But you still own it legally until they pay every last dollar.
Here’s the problem: Most buyers who need land contracts can’t qualify for traditional mortgages. That’s not judgment—it’s risk. And if they default, you’re the one foreclosing.
In Ohio, under Ohio Revised Code §5313.02, you must record the land contract within 20 days. I’ve seen sellers skip this step. Big mistake. If you sell the property twice by accident—or if a lien hits—the buyer can sue you into oblivion.
The Land Contract Process in Ohio: What They Don’t Tell You
Step 1: Negotiation (Where Most Deals Go Wrong)
You negotiate price, interest rate, down payment, monthly payments, contract length. Sounds flexible, right?
Wrong. Flexibility means risk. I’ve reviewed contracts where the buyer agreed to pay property taxes—then didn’t. Now the seller owes $8,000 in back taxes and penalties.
Lesson from 1,700 deals: Every responsibility must be crystal clear. Who pays insurance? Taxes? Repairs? If it’s vague, someone’s getting screwed.
Step 2: Contract Signing and Recording
You must record the land contract with your county recorder within 20 days (ORC §5313.02). This protects the buyer’s interest and makes it public record.
I’ve bailed out sellers who forgot to record. One guy in Dayton signed a land contract, then refinanced his own mortgage. The buyer had been paying him for two years. When the seller defaulted on his mortgage, the bank foreclosed on the property—with the buyer still living there.
The buyer lost everything. No title. No equity. Just eviction.
Step 3: Payment Schedule (The Ticking Time Bomb)
Buyer makes monthly payments: principal, interest, taxes, insurance (PITI). Sounds like a mortgage, but it’s not. There’s no bank, no escrow, no protection.
I recommend third-party escrow services. But most land contracts? The buyer hands the seller a check every month. No accountability. No paper trail.
I bought a property in Cincinnati where the seller claimed the buyer stopped paying. Turns out the buyer had been paying—cash, no receipts. Seller pocketed the money and initiated forfeiture anyway.
Step 4: Title Transfer (If You Ever Get There)
Once the buyer pays off the contract, the seller transfers the deed. Simple, right?
Except I’ve seen sellers die mid-contract. Now the buyer’s dealing with probate, heirs fighting over the property, and no clear title. That “flexible” land contract just turned into a legal nightmare.
Ohio’s Land Contract Laws: The Fine Print That Burns You
The 20% / 5-Year Rule (ORC §5313.07)
If the buyer defaults before paying 20% of the principal or making payments for five years, you can forfeit the contract. That means you keep all their money and take back the property. Fast process.
But if they’ve hit that threshold? You must foreclose—just like a bank. That’s 6–12 months, $3,000–$7,000 in legal fees, and you’re still responsible for the property during that time.
I had a seller in Columbus carry a land contract for six years. The buyer paid $40,000. Then stopped. The seller wanted to forfeit and move on.
Couldn’t. Had to foreclose. Cost him $5,200 in attorney fees. The property sat vacant for 11 months while the case dragged through court. By the time he got it back, it needed $12,000 in repairs.
His “profit” from six years of payments? Wiped out.
Hard Way vs. EZ Sell Way: Let’s Compare the Reality
| The Land Contract Path | Selling to EZ Sell for Cash |
|---|---|
| Record contract within 20 days or risk legal disputes | No recording, no waiting—done in days |
| Buyer makes payments for 5–30 years (you still own it) | Full cash payment, you walk away free |
| If buyer defaults, you foreclose (6–12 months, $3K–$7K) | No buyer, no default risk—ever |
| You’re still liable for taxes if buyer doesn’t pay | We handle everything—zero liability |
| Buyer trashes the property? You pay to fix it | We buy as-is—damage doesn’t matter |
| Balloon payment looms (most buyers can’t refinance) | Cash closes in 7–10 days, no financing |
| If buyer sues, you’re hiring an attorney | No legal risk, no buyer drama |
Real Story: The Dayton Land Contract That Fell Apart
The Setup
I met Carol in 2019. She inherited a house in Dayton from her parents. Needed to sell fast—medical bills piling up. Realtor told her it’d take 6 months and $15,000 in repairs.
A “buyer” approached her with a land contract offer. $95,000 purchase price, $5,000 down, 8% interest, 15-year term. Sounded great.
The Collapse
Year three, the buyer stopped paying. Carol tried calling. Nothing. She drove by the house. Overgrown yard, broken windows, clearly abandoned.
She called me. “Mike, what do I do?”
I ran the numbers:
- Buyer had paid: $28,000 over three years
- Attorney to foreclose: $4,500
- Back taxes owed: $3,200 (buyer didn’t pay)
- Repairs needed: $9,000
- Time to foreclose: 9 months
Total cost to Carol: $16,700. Nine months of stress. And she still had to sell the house afterward.
The EZ Sell Alternative
I bought the property from her as-is for $78,000 cash. We closed in nine days. She paid off the land contract buyer (legally required since they’d paid over 20%), covered her legal fees, and still walked away with $48,000 net. If you’re facing a similar situation, learn how cash home buyers in Dayton can help you avoid land contract risks.
Her words: “Mike, I wasted three years thinking I was helping someone become a homeowner. I just needed the cash and the stress gone. I wish I’d called you first.”
The Benefits They Advertise (And the Reality I’ve Lived)
For Buyers:
- ✅ Advertised: Alternative financing if you can’t get a mortgage
- ❌ Reality: If you can’t get a mortgage now, what happens at the balloon payment in five years?
- ✅ Advertised: Flexible terms, easier approval
- ❌ Reality: One missed payment and you’re fighting forfeiture—no grace period like a bank gives
- ✅ Advertised: Build equity while living there
- ❌ Reality: You don’t own it. If the seller dies or defaults on their own mortgage, you lose everything
For Sellers:
- ✅ Advertised: Faster sale, earn interest
- ❌ Reality: You’re a bank now—with all the risk and none of the protections
- ✅ Advertised: Reliable income stream
- ❌ Reality: Until the buyer stops paying and you’re foreclosing
I’ve done 1,700+ transactions. I can count on one hand the land contracts that worked out for both parties.
The Risks Nobody Mentions Until It’s Too Late
For Buyers:
- You don’t actually own the property until the last payment clears
- Seller can still have liens or a mortgage on the property
- If seller dies, you’re negotiating with their estate
- One missed payment = forfeiture and loss of all equity
- Most land contracts have balloon payments—can you refinance in 5 years?
For Sellers:
- Buyer stops paying? You’re foreclosing (time, money, stress)
- Buyer doesn’t pay taxes? You’re liable
- Property gets damaged? You’re fixing it before you can resell
- Buyer sues claiming you breached the contract? You’re defending yourself
I bought a property in Toledo where the seller carried a land contract for eight years. The buyer stopped paying. Seller foreclosed. During the process, the buyer stripped the copper, furnace, and water heater. Seller got the house back—and a $14,000 repair bill.
My Advice After 25 Years: Time vs. Money
Look, land contracts are legal. Plenty of attorneys will draft one for you. The Ohio Revised Code lays out the rules clearly.
But here’s what 1,700 transactions taught me: legal doesn’t mean smart.
Time vs. Money
Land Contract Path:
- 5–30 year commitment
- Monthly payment uncertainty
- Foreclosure risk if buyer defaults
- Legal fees, back taxes, repairs
- You’re still tied to the property for years
Cash Sale Path:
- 7–10 days, done
- No buyer drama
- No legal risk
- Cash in hand, move on with life
I’m not saying land contracts never work. I’m saying after 25 years, I’ve seen too many families lose time, money, and peace of mind trying to make them work.
You don’t need to become a bank. You need cash—now.
Let me give you a straightforward offer based on your property’s actual value. No 5-year balloon payments. No buyer drama. No foreclosure risk down the road.
Get Your Cash Offer in 24 Hours
Fill out the form below and I’ll call you within 24 hours with a real number. You decide if it makes sense. Zero pressure, zero obligation.
Sell Your Dayton House Fast For Cash
Bottom Line
If you’re thinking about a land contract because you need to sell fast, can’t afford repairs, or don’t want to wait months for a traditional buyer—you don’t need a land contract. You need a cash offer.
I’ve bought houses with:
- Foundation issues the buyer couldn’t see
- Title problems that killed traditional sales
- Sellers who couldn’t wait 5–30 years for a payout
- Families who just needed the stress gone now
No repairs. No inspections. No buyer financing falling through. No land contract drama years later.
Would you like me to run the numbers on your property today?
Call me at (937) 598-2274 or visit EZSellHomebuyers.com.
I’ll give you a fair cash offer in 24 hours. You decide if it makes sense. No pressure, no games—just straight talk from someone who’s done this 1,700 times.
FAQ: Land Contracts in Ohio vs. Selling for Cash
1. What is a land contract in Ohio?
A land contract is seller financing where the buyer makes payments directly to you over time. They live in the property but don’t legally own it until the final payment. After 25 years, I’ve seen this setup create more problems than it solves—especially when buyers default or sellers die mid-contract.
2. How does the Ohio land contract process work?
You negotiate terms, sign the contract, and record it with the county recorder within 20 days (Ohio Revised Code §5313.02). The buyer makes monthly payments. Once paid off, you transfer the deed. Sounds simple. But I’ve cleaned up dozens of these deals where sellers skipped recording, buyers stopped paying taxes, or someone died halfway through. It’s rarely as clean as it sounds.
3. What are the legal requirements for land contracts in Ohio?
Ohio law requires recording within 20 days. If the buyer pays 20% of principal or makes payments for five years, you must foreclose (not forfeit) if they default (ORC §5313.07). I’ve seen sellers ignore this and get sued. I’ve seen buyers lose everything because sellers didn’t record properly. The legal requirements are clear—but enforcing them costs time and money.
4. What are the benefits of using a land contract in Ohio for buyers?
Buyers get access to homes they couldn’t otherwise afford. Flexible terms, easier approval, build equity while living there. But here’s what I’ve seen in 1,700 deals: Most buyers who need land contracts can’t refinance at the balloon payment. They lose years of payments and get evicted anyway. It’s not homeownership—it’s expensive renting with extra risk.
5. What are the benefits of land contracts for sellers in Ohio?
You move the property faster and earn interest. Sounds great until the buyer stops paying and you’re foreclosing for 6–12 months while the property sits vacant. I bought a house from a seller who carried a land contract for seven years. Buyer defaulted. Seller spent $6,400 on legal fees and $11,000 on repairs. His “interest income” evaporated.
6. What are the risks of land contracts for buyers in Ohio?
You don’t own the property. If the seller dies, defaults on their mortgage, or has liens you don’t know about—you lose everything. I’ve seen buyers pay for years, only to discover the seller owed $30,000 in back taxes. The county foreclosed. Buyer got nothing back. Zero legal protections compared to a real mortgage.
7. Can a land contract be forfeited if the buyer defaults?
Yes—if they haven’t paid 20% or made payments for five years. You keep their money and take back the property. But if they’ve crossed that threshold, you must foreclose—6 to 12 months, $3,000–$7,000 in legal fees. I had a seller in Columbus spend $5,200 foreclosing after carrying a contract for six years. The property needed $12,000 in repairs. He lost money.
8. How does recording a land contract protect the buyer?
Recording makes the buyer’s interest public. If you sell the property twice or default on your own mortgage, the buyer has legal recourse. But I’ve seen buyers skip this step because they trusted the seller. One guy in Dayton paid for two years—seller refinanced and the bank foreclosed. Buyer had no recorded interest. Lost everything.
9. What should a buyer do before entering into a land contract in Ohio?
Hire a real estate attorney. Order a title search. Verify the seller owns the property free and clear. Set up third-party escrow. But here’s the truth: If you need a land contract because you can’t get a mortgage now, what’s changed in five years when the balloon payment is due? I’ve seen this movie. It rarely ends well.
10. Are land contracts common in Ohio?
They’re becoming more common as buyers struggle to qualify for traditional financing. But in my 25 years, I can count on one hand the contracts that worked out smoothly for both parties. Most end in default, forfeiture, or foreclosure—and someone loses big.
11. Can a seller reclaim the property if the buyer stops making payments?
Yes. Forfeiture (if under the 20%/5-year threshold) or foreclosure (if over). Either way, you’re spending months and thousands of dollars getting your own property back. Then you’re reselling it—often after the buyer damaged it. I bought a house in Toledo where the seller foreclosed after eight years. The buyer stripped the copper and furnace. Seller faced $14,000 in repairs.
12. Can a land contract be used for commercial properties in Ohio?
Yes, but the risks multiply. Commercial deals involve bigger dollars, more complex terms, and higher stakes. I’ve structured commercial deals—and I’ll tell you straight: If you need seller financing for a commercial property, you’re better off finding a traditional lender or selling to a cash buyer who specializes in commercial real estate.
13. Do I need an attorney to draft a land contract in Ohio?
Legally? No. Practically? Yes. I’ve reviewed land contracts drafted by sellers who Googled a template. Missing clauses, vague terms, zero protection. One seller in Dayton used a template that didn’t specify who paid property taxes. Buyer didn’t pay. Seller owed $9,000 in back taxes and penalties. An attorney costs $500–$1,500 upfront. Fixing a bad contract costs $10,000+.
14. What happens if the seller defaults on their mortgage during a land contract?
The bank forecloses. The buyer—who’s been paying you for years—loses the property. I’ve seen this exact scenario three times. Buyer thought they were building equity. Seller couldn’t keep up with their own mortgage. Bank foreclosed. Buyer had no recorded interest (or it was subordinate to the mortgage). Buyer lost everything.
15. Should I use a land contract or sell for cash?
After 1,700 transactions, here’s my advice: If you need money now, don’t want to wait 5–30 years, and can’t risk a buyer defaulting—sell for cash. I’ve bought properties from sellers who tried land contracts first. Every single one said the same thing: “I wish I’d just sold to you from the start.”
I’ll give you a cash offer in 24 hours. No obligation. No pressure. Just honest numbers based on 25 years of doing this.