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Commonly Asked Questions about Real Estate Contract for Deed Notices

Which is NOT typical of a contract for deed? The seller retains legal title. The seller pays real estate taxes and insurance premiums.
What are the two primary purposes/benefits to the seller of a contract for deed? First, it facilitates a sale that might otherwise be impossible. Second, it may give the seller certain tax benefits.
Risks of a Contract for Deed If disputes arise between the buyer and seller of a contract for deed property, legal recourse is limited for the party living in the home. The purchaser has few options and may not be able to take full advantage of rights provided by law under a traditional mortgage.
Contracts for deed may have greater risk for the seller. The seller is not solely on title on the land for the term of the contract. Thus, if the buyer defaults, the seller will have to commence action and may be forced to reclaim the land.
A contract for deed, also known as a land contract, is an alternative method for financing the sale of a house or other real estate. The buyer and seller agree to an installment plan, where the buyer pays the seller directly over a period of time instead of in one lump sum when the transaction closes.
The biggest risk when buying a home contract for deed is that Buyer does not have a legal claim to the property until Buyer has paid off the entire purchase price.
Include the agreed upon purchase price, down payment amount, interest rate and payment details. You should also outline the payment schedule and how and where payments are to be made. Besides monthly payments, youll want to define if they will have to pay a final lump sum or balloon payment at the end of the term.