My husband and I bought a home "contract for deed" one year ago. At the time, it was the perfect solution to our needs. Things have changed and we can't afford the payments any longer. We have not missed any payments as of yet. We are wondering if there are options for us to cancel a contract for deed without the risk of going to court or damaging our credit. The seller of the property is not particularly friendly and I hesitate to talk to her about it prior to knowing what our options are.

First check with a local Realtor to determine the current market value of the property, to see if you can sell it at a break even or a profit. Even though you don't hold legal title to the property, your "equitable interest" in the property should afford you the right to sell it. Your Contract For Deed most likely states that the debt may not be assumed by a subsequent purchasor. This means that a buyer would have to pay cash or secure a new mortgage, sufficient to pay off the previous seller. Should you chose to default on the debt, the seller's attorney would file an Affidavit of Forfeiture. That insrument would be recorded in the county public records. I would imagine that it would have an adverse affect on your credit. If neither option A or B is viable, I would ask the seller if they would agree to a mutual cancellation of the agreement. Good luck.

Ok, read your contact and see exactly what it says, with a contract for deed, you don't actually own the house, and there is no real "foreclosure" if you stop paying, it normally works more like renting when you stop paying. ( and believe me, the owner expects you to stop paying before it is paid off) that is how they make their money by selling and reselling the same property over and over.

Normally you merely notify them that you are going to default on the contract. Then they can only do what ever the contract allows them. Normally on contract for deed this is just take the house back over. And you loose any money you put into the house.

I have a couple of these and I would be upset if someone actually paid it off. Contract for deeds are done normally for people who have bad credit and can't afford to buy one though regular means.

So they pay higher than normal interest rates, a down payment and they move in. so you are the real owner don't have to pay any upkeep, no repairs and next you have the buyer paying taxes and insurance. And paying larger payments than rent and a larger down payment.

My normal turn over is about 2 to 3 years on a house.

So read your contact and that is all you have to worry about.

With all legal matters always best to consult an local attorney.