Can I walk away from a land contract?

[rsctek]

I purchased a home under land contract in Michigan in November of 2006, that listed that the home was to be refinanced in 9 months, or August of 2007. The land contract was filed with the county clerk. Our down payment was a balance of a security deposit we were owed back (we rented from them at another house prior to this one), and the prorated reimbursement of taxes on this house. We were unable to get financing for the home, and were told by seller we could continue under the same terms and try again to finance in another year, but would have to increase our monthly payment. We agreed (all was done orally), and have been paying an additional $75/mo since. It was then requested that we pay an additional lump sum to them in December of 2007 since they did not get the mortgage broking fees they were counting on that fall (they are mortgage agents that were going to broker our mortgage when the time came). We agreed and paid them $1000 in Dec. We have not spoken with them to draft any new paperwork, or get any statements as to how our payment has been applied to the balance. My question is this: Am I able to walk away from this house (after giving them signifigant notice of course), or am I in obligation to them for the price of the home? I include the details of my equity paid into the house ($4500 + about $5000 in upgrades), not because I would expect any of it back, but because I would want to use it as a bargaining chip to not be hassled by them for wanting out, and possibly to not have to make the last month's payment ($1475). The disclosure on the house was written as "Never Lived In", and we have found numerous problems with this house that we do not want to have to fix. According to the contract, if I stop paying, the contract is breached and the house is automatically back to them. I don't want doing the right thing (notifying them, willingly forfeiting all equity, etc.) to bite me in the rear though by giving them the chance to try and make me stay against my will...