contract for deed...have you done it?

mldollins · #1 05/14/09, 06:17 PM

I am currently renting our home and will get it paid down in about 6 years. what we would like to do is contract it out in about 5 years. What has been your experience? Is there a website that can give some advice?

thanks

Wolf mom · #2 05/14/09, 08:09 PM

Lots of threads on the pro's & con's of this. Just search here.

So if I understand correctly, you have a house that is currently a rental, and in 5 years it will be paid off. You then want to sell it & carry the paper?

In my past experience of being a realtor for over 13 years, If I were selling my home or raw land, and carring the paper, I would do a Note & Deed of Trust - nothing else! Lots of people have had good experience doing different things, but due to the ramifications, this is what I would do living in Arizona. Each state is a little different.

In 5 years, we will probably be in an inflationary period. It might make sence to carry the paper then, but you would have to make sure to protect yourself as more people would be looking for seller financing.

Good thinking ahead.

Old Vet · #3 05/14/09, 11:35 PM

Quote:

Originally Posted by mldollins

I am currently renting our home and will get it paid down in about 6 years. what we would like to do is contract it out in about 5 years. What has been your experience? Is there a website that can give some advice?

thanks

What does renting apply to owning a house? If you are paying rent why not get it done now? If you are renting you will not pay anything on what you think the owner will ask for it. I had a sister in law that payed rent for a while and thought she owned the house.

Alice In TX/MO · #4 05/15/09, 06:48 AM

Please clarify what you mean. Renting/buying/selling?? We're all guessing here.

Owner finance a house that you are selling. Don't do that contract for deed thing. There's a realtor here in Alton, Missouri, that uses that to rip off his clients. I hate that.

Get a lawyer to do the paperwork right to protect yourself and the buyer.

Ken Scharabok · #5 05/15/09, 07:26 AM

My assumption is you are renting out a house you now own.

IMHO, if a buyer cannot arrange bank financing, then they are highly unlikely to be able to complete an owner financing arrangements. Again, IMHO, go through a realtor and require a mortgage pre-qualification document before even considering their offer.

willow_girl · #6 05/15/09, 10:20 PM

I sold my farm back in Michigan on a land contract ... it's been 2 years, and thus far the buyer has made every single payment on time.

I'll make far more off the sale over the long term (thanks to the interest) than I would have selling it outright.

Also, where else are you gonna make 6.5% right now?!

Alice In TX/MO · #7 05/16/09, 06:47 AM

I'm getting 9% on an owner finance house sale now. They had no down payment, so that's why the rate is high.

The attorney in our little town recommended the rate, as they do a lot of these transactions.

willow_girl · #8 05/16/09, 08:24 AM

Holy moly; 9 percent! They must have really wanted that house ...

I knew my buyer and trusted him, so I set the rate 1% above conventional mortgage rates at the time the papers were signed.

You are right to get something extra for your risk, though!

It's not necessarily a bad thing for the seller if a buyer defaults. I knew a fellow who had grown rich selling the same 3 or 4 modest houses over and over on land contracts ...