Deeds are used to transfer title to land and attached structures (real property). There are generally two types of deeds, warranty and quit claim. Warranty deeds transfer title along with a warranty (guarantee) by the seller of good title. Quit claim deeds transfer title but without a guaranty of good title.
Installment sales of land and buildings (real property) in Michigan are usually accomplished through the use of land contracts, at least where institutional lendors like banks are not involved. Land contracts are very similar to mortgages and can be foreclosed or forfeited in the event required payments are not made when due. Enforcement is relatively simple and inexpensive.
Purchase agreements are contracts which bind the parties singing the agreement to buy and sell land and buildings if certain conditions are met. Purchase agreements are extremely important since once executed the purchase agreement will control what happens at closing. Any understanding or promise that is not included in the purchase agreement is not a part of the deal. Once a purchase agreement is signed it is generally too late to include provisions which have been overlooked.
Leases are contracts between a landlord and a tenant which give the tenant the right to occupy specific land and buildings (or portions thereof) for a specific length of time. In exchange the tenant agrees to make payments to the landlord commonly called rent. Rent may include payments to the landlord for taxes and other charges relating to the property. Generally the tenant is entitled to keep possession so long as the tenant makes the payments required by the lease until the end of the lease term when the tenant must either renew the lease or move out.
Tax Free Exchanges
Whenever real property is sold there is a strong likelihood that capital gains tax will be due from the seller. In situations involving property other than a principal residence it is often possible to defer the tax by entering into a tax free exchange by essentially swapping the old property for a new property. In order to qualify under the tax code for tax deferral it is necessary to meet a number of strict requirements. Normally satisfying those requirements is not too difficult and tax free exchanges are becoming extremely popular by people who are selling real estate.