Contract for Deed need help on this
I am wanting to purchase a house using the CONTRACT FOR DEED for 12to 24 months way of
this is what I been told how this works, the owner will carry the note and if we fill out a contract for deed were I make payments to the owner and then the owner inturns pays thier mortgage like normal, then after a year I should be to refiance on my own and pay off their existing lien and get my own.
I also been told that this contract for is a binding contract, so what are the terms as if I wanted to get out after a year and/or do I have a choice to get out? and/or can she back out after the 12/24 months, I guess what Im trying to get at is what rights do I/owner have?
Please if anyone has any info on this let me know. 
Do you have a property in mind and have you spoken with the owner about this, or are you hoping to sell your idea to the owner when you find your property?
The best place for advice on this is your local real estate attorney. Contracts are always state specific and should be reviewed/written by a state licensed lawyer.
A CFD is a binding contract to both parties, seller and buyer. The buyer is obligated to pay as agreed, and the seller is obligated to release title to the buyer if all conditions are properly met (ie balance is paid in full). A CFD is like a mortgage. The seller acts as the lender and the buyer as the borrower, and all the responsiblities that go with it. If you want out (buyer), you will have to sell the property, either to another buyer or back to the seller.
The seller retains title to the property until the CFD is resolved. The seller can foreclose/evict you if you fail to pay. The seller can sell the land contract (at a discount) for cash to another investor.
Roger[ Edited by rajwarrior on Date 05/16/2003 ]
Roger,
Let's add one important thing in addition to what you said.
I would always recommend that a 3rd party such as a Loan Servicing Company handle the payments. They can collect the payments from the buyer for the seller and make sure the underlying loan gets paid.
I have seen to many deals where the seller collected the payments themselves but failed to pay the lender. An honest seller should have no problem with this arrangement for everyones protection.
John $Cash$ Locke
[quote]
rajwarrior and JohnLocke All-Star
Thanks for the quick replies,
yes I talked to the owner already and pitched it today to them. I was trying to buy the house outright but credit is perfect and would cost me to much in upfront fees so I talked to a few people and they told me to try this.
They are willing to do this under one main condition that they can still buy another house, I was told that there shouldnt be a problem with that even know they are carrying the loan but since there is a contract drawn up and proof that Im paying then it wont be a problem with them getting a new loan.?
So as long as that part is true then this should all go thru for me.
I will have to go thru a atty or title company I was told like your saying since this is just as buying the house. Thanks for confirming that.
So lets say I do it for 12 months, then improve my credit during that time. Refi with a lender and there should be no closing costs since basically we are rolling the title over. ?
John
Thanks for all the help, this is the most imformative site I ever found on this stuff. Great site!!!!!
MadHermit
Glad to meet you.
No quite, their will be a new loan and closing costs.
Lenders highly take into consideration how you paid on the Contract for Deed, even if your credit is a little shakey you will in all likelyhood qualify for a new loan if you religiously make your payments on time.
I have talked with Mortgage Brokers that can finance and have financed 'D' credit, however you will pay a higher interest rate.
Your seller will be able to qualify for another home, without a problem, as long as there credit is good.
Welcome on board this board, hope you get the American Dream.
John $Cash$ Locke
Thanks for all the help John, you answered all them for me.
Thanks again,
MH
If I sell a house using a contract for deed and the buyer decides not to purchase the property -- am I still obligated to pay the RE Agent a selling commission?
Jump,
Glad to meet you.
I am not sure how a real estate agent got involved in the deal, but if you buy from the seller then the agent is going to want their commission right then and there, no matter what you do with the property.
When purchasing a property using the Subject To method of investing a real estate agent is not involved at least the not the way I do it.
Welcome on board this board, I would suggest you keep asking questions, reading articles and posts. We here in the TCI community will bring you up to speed.
John $Cash$ Locke