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    upyooper's Avatar
    upyooper Posts: 5, Reputation: 1
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    #1

    Aug 28, 2007, 08:20 AM
    How does a contract for deed work?
    I have been reading some of the posts and was wondering if someone could explain this
    "Contract for Deed" when selling a house.
    Thank you.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
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    #2

    Aug 28, 2007, 08:37 AM
    Simple. You enter into a contract with a buyer to pay x amount for the property. Usually there is a small down payment and often there is a ballon payment at the end. Once the contract has been satisified the deed is THEN transferred.

    The advantage for the buyer is generally a smaller down payment and owner financing. When a ballon payment is used, it means the buyer is givien time to obtain their own financing. The advantage to the seller is that often such buyers have finaincial difficulties and tend to default. The sellers can then simply evict them keeping everything they've paid, then turn around and sell the house again.
    upyooper's Avatar
    upyooper Posts: 5, Reputation: 1
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    #3

    Aug 28, 2007, 02:47 PM
    Thank you for the quick response, What do you think about lease option? I have 3 homes right now with an investor partner, he's like the manager but he isn't keeping up his end of the partnership agreement. He claims the tenants aren't making their payments. I talked with a lawyer and I am going into my own LLC. Do you think I should stay with lease option or just rent the houses out to renters.
    ScottGem's Avatar
    ScottGem Posts: 64,966, Reputation: 6056
    Computer Expert and Renaissance Man
    		  
    #4

    Aug 28, 2007, 05:32 PM
    What do you mean by lease option? Isn't that renting?
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