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    baybay8684's Avatar
    baybay8684 Posts: 10, Reputation: 1
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    #1

    Aug 25, 2011, 06:09 PM
    Is Contract to Deed a good idea
    I want to know how to protect myself "Buyer"
    twinkiedooter's Avatar
    twinkiedooter Posts: 12,172, Reputation: 1054
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    #2

    Aug 25, 2011, 06:15 PM
    I thought you already had a situation like this going? In the future you need to have an attorney draw up one for you when you want to buy something like that. I did many years ago and I had a very good contract that spelled out every possible scenerio. I had an attorney friend of mine draw up for me. He would have charged someone else about $100 for this.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #3

    Aug 25, 2011, 06:18 PM
    You protect yourself by having an attorney review the contract before signing.
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #4

    Aug 25, 2011, 06:23 PM
    The main issue is to know what you are getting into and why ?

    Why are you buying on a contract of deed instead of doing a owner finance or borrowing the money from the bank.

    I have bought them on contract if I am going to "flip" them and did not want to tie up my money and/or tie up my credit limits. So I know that I can fully pay it off in 5 or 6 months normally.

    The main issue, this is a contract for purchase, it is not a purchase, you don't actually buy the home till the last payment is made. The taxes stay in the sellers name, and normally the seller will keep their own insurance on it ( in case you drop yours) and you will have insurance on it also.

    The main thing to remember is that at the court house, you don't own the house, the seller does. You as the buyer will want to record the contract at the court house, this will have an effect often in the ability of the seller to borrow more money on the home.

    That is the biggest worry, if you pay the entire contract and the seller owes so much on the home, he can not sign it over. Next of course you need to know they are the legal seller, does the person who sign the contract have the sole ability to do so, if house is in husband and wife name, both have to be on the contract for deed.
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