Selling On Terms--wording The Contract Correctly
I'm about to sell my first property on a Contract for Deed.; I bought in on a Contract for Deed too (not a Sub2 or Foreclosure, just a motivated seller...note's at 6%!). When buying I had the title company (no lawyers involved yet) write up the CD on the "standard" Minnesota C4D form--4 legal sized pages--which seemed the safest considering my inexperience. Should I use that same form for selling, and are there any clauses I should look out for, that might come back to bite me later? I'd like to finesse this the best way I can. Thanks!.
You can likely use the same form that you used before. I might ask an attorney if there are any clauses that are different but I know the "Iowadocs" forms are the same for both parties, however tend to protect the buyer more than the seller.
See what terms if any you would like to see different.
As an example I'm looking at a standard property management form. It is TOTALLY in the prop manager's favor. It would almost be a show stopper.
If you do make big changes, make sure the buyer as it appropriately reviewed and did his own DD on the new version.
The other way I look at these things is: Is it worth (say) $500 (tax deductible, no less) to have an attorney draft the document? Then keep it as a boiler plate.
buyers and sellers want different things. default provisions - buyers want longer time periods, sellers want to pull the time in. if there is a balloon, buyers want extensions if financing unavailable. sellers want to tighten that up by raising interest if they can't obtain financing and giving specifics such as providing loan applications. you want to subtly slant everything your way - late fee after 10 days, not 15, etc.
It is rare that you would want the same terms as the buyer as you would when you are the seller.
Consider a lawyer and at the same time look at the fee as part of your educational costs. A title company can supply the documents but the lawyer will offer advice and stand behind the advice (liability policy).
Before meeting with a lawyer read up as much as you can as an educated client helps when talking with a professional. You ask better questions and can provide better feedback as to what you want to accomplish.
John
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