Can anyone explain to me Contract for Deed Housing?

Question

I want to buy a house, I dont have the best credit in the world, but I am working on it. A friend of mine suggested I check into C4D type of buying a house. Has anyone else done that or knows what it all entails? Thanks a bunch!

Answer 1

It could work. The typical arrangement is this: The seller keeps title until the specified conditions of the contract (which may be a fixed time, or the payment of a certain amount of money) are met. Usually the buyer takes physical possession of the property, and makes regular payments to the seller, which will be divided in some way (hone your negotiating skills) between rent and consideration of the purchase price. When it is time to deliver the title, the seller executes a deed (or may have already done so, the deed being held in escrow) actually delivering the title. Often, there is at the same time a new loan from the usual sort of lender (local S&L) to finish paying off the seller.
The following documents are REQUIRED:
- Contract, in writing, between buyer and seller, outlining all the details. Must be signed by both; need not be notarized.
- Memorandum of contract. which says that a contract of sale exists. It need give no details except the termination date of the contract. Must be executed by the seller, notarized, and recorded. This is the buyer's protection against the seller re-selling the property.
- Deed, usually a grant deed. Must be executed by the seller, notarized, and recorded when title is to transfer (but NOT until then).
Strongly advised, but not required: a policy of title insurance. This protects the buyer by verifying that the seller has marketable title to the property -- i.e., that he has the right to sell it to you.
A title and escrow company can help set all of this up. Also, talk to a lender or two and listen to what they have to say about it.
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