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    mariemay's Avatar
    mariemay Posts: 15, Reputation: 1
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    #1

    Oct 10, 2008, 09:44 AM
    Contract for deed, seller dies
    Two questions:
    Can my mom sell me one of her investment properties on contract for deed if there is a mortgage on the property?
    What happens if she dies,the existing mortgage has not been paid off, and we have a contract for deed on the property?
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Oct 10, 2008, 09:49 AM

    Yes, owners sell property with mortgages under a contract for deed all the time. Since, in a contract for deed, ownership doesn't change until the contract is fulfilled, the mortgage is unaffected.

    If mom dies before the contract is completed and ownership changes, then the property goes into the estate. You continue to pay your contract amount to the estate until you fulfill the contract, at which time, the estate transfers the property to you.
    pattijo55's Avatar
    pattijo55 Posts: 104, Reputation: 5
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    #3

    Oct 10, 2008, 12:39 PM

    Scott, Is your answer just a standing law in all states or do you have to have something written in your contract that says if the owner of the house dies you will not lose out on all the money you've paid to their mortgage and will still be able to continue paying as usual. P
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #4

    Oct 10, 2008, 12:43 PM
    Quote Originally Posted by pattijo55 View Post
    Scott, Is your answer just a standing law or do you have to have something written in your contract that says those exact words? p
    Partly both. Generally a contract for sale states that the buyer must adhere to the terms of the contract at which point the seller transfers title.

    When someone dies their assets go into their estate where the executor manages them. The property would be part of the estate and the estate would be required to honor the contract on the property
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #5

    Oct 10, 2008, 01:11 PM

    Your contract is binding to the estate. Now of course if there is bad blood between you and other family members I believe it is always best to have it in writing. I would always have an attorney write up the contract for deed, that way it will follow your state law specificly and cover most issues.
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