Contract for deeds can be an excellent method for someone to purchase real estate that may not otherwise be able to purchase real estate by financing through a bank. However, contract for deed sales are much less regulated and buyers are more likely to encounter disreputable sellers.
A contract for deed should, at a minimum, clearly identify the property to be purchased (by common address and legal description), be in a format that can be recorded in the County recorder’s office, describe the purchase price and how it is to be paid, who is responsible for taxes and insurance, the seller should disclose whether the property is subject to a mortgage and if so provide a right to the buyer to receive regular statements showing the balance of the mortgage, remedies for both the buyer and seller in event of default, describe the buyer’s right to sell the property, redemption rights (if you are the buyer), and a right to request attorney’s fees in the event of a breach, among other things.
If you are considering buying or selling property on a contract for deed, consider reviewing the contract with an attorney.
© 2020 Fremstad Law