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I purchased a home from a friend for 25,000 and paid 2,000 down at time of signing of contract. Now , he also sold it to me with no interest and also I can pay lump sum to pay off faster if wanting to. How long before I have equity , the home is appraised for 33,000 also?
A contract for deed is where the house remains in the sellers name and you do not own the house until you pay off the entire $25,000.00. At that point, when he gives you a deed you will have equity, no you have just a contract for deed. If you are paying it on time, why not ask for him to change it to a mortgage and note. If he agrees he must give you a deed and then you will have equity.
As noted, with a contract for deed you don't actually own the house until you fulfill the terms of the countract. So you don't have any "legal" equity.
Can you explain why you are asking? We may be able to suggest something if we understand.
Equity is simply the difference between the value of an asset and the value of any liens on it. So, if the purchase price was $25K and you paid $2K down and the property is appraised at $33K you could be said to have $10K in equity. But since you don't actually own the property there is nothing you can do with that.
That is NOT true!
IF this is a CONTRACT for DEED... and it has been implemented correctly... the seller is the owner of the house buy contract unless he defaults on the note (payments).
If this contract was not drawn up and filed with the deed of records correctly then you have a problem...
Umm, what is not true? What you say doesn't contradict anything in the previous responses.Quote:
Originally Posted by sheading
Read your statement...
"with a contract for deed you don't actually own the house until you fulfill the terms of the countract."
And another answer... A contract for deed is where the house remains in the sellers name and you do not own the house until you pay off the entire $25,000.00.
This is not true... unless you wrote the contract for deed wrong...
Maybe the problem is you have a different (and erroneous) concept of what a contract for deed is. Or maybe you use the term for a different instrument. But both of my statements are correct. Once again, A contract for deed is a contract entered into between a home owner and a prospective buyer. Generally, these instruments are used when the buyer cannot get their own financing at the time. The seller then offers a contract for deed. Under the typical terms of such a contract, the seller retains title to property (another reason for this type of transaction is that the seller has an outstanding mortgage so doesn't want to trigger a due on sale clause by transferring the property) until the terms of the contract are fulfilled. At that point and only at that point is a closing held and the property transferred.Quote:
Originally Posted by sheading
The advantage for a buyer in such a contract is that they have time to repair their credit and obtain their own, conventional, financing while still retaining an exclusive interest in the property. The advantage to the seller is that, in case of default, the contract reverts to a rental contract and all monies paid are forfeit. The seller becomes a landlord and can evict the (now) tenant without going through a foreclosure.
You need to do some more research because you are either misusing the term or don't know what you are talking about.
Again am a realtor and a loan officer... so I think I know exactly what I am doing??
And unless you are a real estate lawyer... or a realtor or a mortgage broker... I don't think you understand...
Computer experts from Michigan... do not qualify for that job...
My point is... you said..
The seller retains title to property
And that is NOT Necessarily true.. unless you wrote the contract up wrong... I know BECAUSE I JUST DID ONE!
So maybe you need re-write the contract to read otherwise...
End of discussion... lets move on...
NO it is not! Sorry... I just wrote one and closed on a $227,000.00 house.
So if you are writing one like that you are hurting yourself...
Would you like me to prove that for you?
I am a real estate attorney and I don't think you understand. ScottGem is correct. A contract for deed means that the seller retains ownership until the contract is complete. Under your scenario you are selling the property and taking back a second mortgage.Quote:
Originally Posted by sheading
I'll provide the proof:
Here's one definition of a contract for deed:
Land contract - Wikipedia, the free encyclopedia
Here's another:
contract for deed - Definition of contract for deed at YourDictionary.com
And here's yet a third (specific to Minn):
www.RonOrr.com | Contract for Deed Definition
And finally, here's one specifically for Arizona:
Arizona Contract for Deed - FindLegalForms.com
So either you are using the term incorrectly or you don't know what you are talking about!
All four of those links state that, in a contract for deed, the seller retains title! So try and tell me again that I'm wrong!
I've tried to give you the benefit of the doubt by giving you the out that you may be using the term incorrectly or we are just talking about a different instrument. You need to do some research before you make a further fool of yourself. I did the research and it provides proof that I'm correct.
When I have time to white out the names and personals on the contract that was filed at the deed of records I will prove YOU are wrong... not that I should waste my time...
On such sillyness... but giving wrong information to people that really need help with this is really not helping them... IF YOU do not have a the training and licenses and experience to be quoting information... you should not be giving it!!
You can attach a PDF with the names and personal info whited out. I'm sure we will see that its not a contract for deed.Quote:
Originally Posted by sheading
Exactly! I've told you before that we take pride in the accuracy of the advice we give here. When we see inaccurate or incorrect information given out here, we will point it out.Quote:
Originally Posted by sheading
As to my training, you have no idea what training I have. People do not have to have licenses to be able to give accurate advice. Nor do they always need formal training. I have given you FOUR websites that all state that you are wrong are you going to dispute those sites? And if you want training, you have the post from a trained and licensed real estate attorney that you are wrong. How much more do you want?
Let me point out something else. You claim to be a Real Estate Broker and Loan Officer. While a broker or agent does need to be licensed, I've never heard of licensing for a Loan Officer. And why would a loan officer get involved in a contract for deed? By its very definition, a contract for deed does not involve a loan since its seller financing. Generally, RE agents and brokers also don't get involved in them, since they tend to be for sale by owner deals, unless the agent/broker is the seller.
If you persist in giving inaccurate advice here, you will force me to take further action to preserve the reputation of this site for accuracy.
I am a real estate agent, and I have bought and sold dozens ( most likely more) homes on contract for deeds.
As the seller I am still the owner at the court house with the deed in my name till the entire contract is paid off, ** I will be honest in all my years no one has ever keep one that long.
In most cases the contract is not even filed at the court house, I have filed a couple that would show someone who may be looking to buy the property there is a contract on it.
But the contract does not pass any ownership of the home till it is completed.
I'd like to see this document. You can upload it at any time. I will be sure to read it along with the other folks here.Quote:
Originally Posted by sheading
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