Michigan land contracts and owner financing: a guide for the seller
Michigan sellers often finance a sale on a land contract: the buyer gets possession and pays you, and you keep title until the contract is paid. Michigan law decides how you can take the property back if payments stop, and every step of it runs on your payment record.
Forfeiture of a land contract
A Michigan seller can recover possession through summary proceedings only if the land contract expressly allows forfeiture for nonpayment or a material breach. Amounts that are due only because the seller accelerated the balance do not count (MCL 600.5726).
The notice of forfeiture must be in writing, dated and signed, identify the parties, the contract date and the property, and state the unpaid amounts with each one's due date, along with any other material breach. It must say the contract will be forfeited 15 days after service, or a longer period it states, unless the buyer cures (MCL 600.5728). The amounts and due dates come straight from your ledger.
After a judgment, the buyer still has time to pay and keep the property: 90 days if less than half the purchase price has been paid, and six months if half or more has been paid (MCL 600.5744). Knowing exactly how much principal has been paid decides which period applies.
Foreclosure instead of forfeiture
A seller can also foreclose a land contract in circuit court, the same way a mortgage can be foreclosed judicially (MCL 600.3101). If you financed the sale with a note and mortgage instead, a mortgage containing a power of sale can be foreclosed by advertisement after default, without a lawsuit (MCL 600.3201).
Licensing
Michigan's mortgage loan originator licensing law exempts an individual who negotiates a residential mortgage loan secured by a dwelling that served as the individual's residence (MCL 493.135). That exemption is about your own former home; a sale of property you never lived in needs its own analysis.
Federal rules count seller-financed sales separately; see RMLO licensing thresholds and the de minimis exemption.
The record every Michigan seller needs
Whatever the structure, the rules above all lean on the same thing: a complete record of every payment, the date it arrived, and how it was split between late fees, interest, principal and escrow. OwnerNote keeps that record. You log each payment as it arrives, and it applies every one the same way, keeps the balance current, produces payoff quotes good through any date, totals the year's interest, and prints statements for any period.
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