Contracts
In Michigan, a contract for deed (land contract) typically requires the vendee (buyer) to pay:
AOnly interest until the final balloon payment
BInstallment payments of principal and interest directly to the vendor (seller)✓ Correct
CMonthly payments to a third-party escrow servicer only
DA lump sum when the contract is recorded
Explanation
In a Michigan land contract, the vendee (buyer) makes installment payments of principal and interest directly to the vendor (seller), who retains legal title until the full purchase price is paid.
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Key Terms to Know
Deed
A written legal instrument used to transfer ownership of real property from one party (grantor) to another (grantee).
EscrowA neutral third-party arrangement where funds, documents, and instructions are held until all conditions of a real estate transaction are satisfied.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
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