0
Although contracts for deed are being used extensively in some areas they have serious drawbacks. In this type of transaction the owner retains the fee ownership in the property until the proposed "buyer" has paid in full. Therefore, the buyer has little protection unless there is some sort of lien in favor of the buyer recorded to prevent any further encumbrances from attaching to the title. (If that is even possible.) During the payment period the owner may die. With no recorded notice of the future purchase, the owner may mortgage the property and default on the mortgage. The bank would take the property and your payments would be lost. Creditors may record judgment liens. The land could be taken for non-payment of property taxes. Federal and state tax liens could be recorded against the owner. Child support liens could be recorded. Any number of problems could arise while you are making your payments on the property. A smarter and safer transaction would be a proper conveyance to you by deed with a subsequent mortgage in favor of the former owner.
Wiki User
∙ 15y ago
Contracts for Deed can be risky for both buyers and sellers. As a buyer, you don't technically own the property until the contract is fully paid off, leaving you vulnerable to losing your investment if you can't make the payments. As a seller, you are still responsible for the property and any associated costs until the contract is completed. It is important to thoroughly research and consider all factors before entering into a contract for deed.
Add your answer:
Earn +20 pts
What are specialty contracts?
Specialty contracts are also known as formal contracts, and must be signed by all the parties involved. A specialty contract must be 'signed, sealed and delivered'. An example of a specialty contract would be the deed to a house.
How can one inexpensively secure a contract for an exchange deed?
Depends on what type of exchange deed but normally lawfirms can help with this. If you want something inexpensive a good idea is to contact a firm offering low rates to help out with contracts.
In Kentucky if you deed your house to your child if you enter a nursing home how long does the deed have to be in effect to insure it is safe from government attachment?
I believe that is a federal statute of two years
If I have power of attorney for my wife can I sign her name off our join owned deeds?
No. You can make contracts in her name, but you cannot change existing contracts between the two of you. Example: you could sell property that is jointly owned, but you could not deed it to yourself.
Satisfaction of note with two mortgages?
A note indicating you satisfied both of your mortgages may proceed the deed you will receive from your mortgage company. You should put your deed in a safe place when you get it.
What is Deed poll and How do you change your last name through the Deed poll?
A Deed Poll is a legal document. Although a Deed Poll is a form of legal contract, it's different from other legal contracts in that a Deed Poll concerns just a single individual and requires that person's signature in the presence of a witness. Deed Poll documents are used for a range of different purposes relating to an individual or a company legally committing themselves to doing something. Deed polls are used in the UK, Ireland, and some other commonwealth countries to commit to using a new name for all purposes. The deed poll can then be used as proof of your change of name.
What should you do when you get a deed with an error or missing course in the legal description?
If the error is minor, and the deed has a title reference that states it is the same property described in a former deed and that former deed recites the correct description, then you may be safe to ignore the error. A missing course in an otherwise perfect deed can be corrected by a scrivener's affidavit. If the error is substantial enough that it causes confusion as to what land was conveyed then you will need a corrective deed. You should have the deed reviewed by the attorney who represented you at the closing ASAP.
Are oral contracts viable in real estate?
They are not enforceable. The Statute of Frauds mandates that all contracts for the sale and conveyance of real property must be in writing. Period, end of story. Even if you are giving your child your home--you must execute a quit claim deed to give it to them.
Are orange contracts safe to use?
"Yes, everyone seems to be in agreement that it is totally safe to use your Orange contract with your blackberry, iphone, or really any mobile device."
What is the palindrome for an act?
DEED.
Is a warranty deed the same as a conveyance deed?
Yes. A warranty deed is a deed of conveyance.Yes. A warranty deed is a deed of conveyance.Yes. A warranty deed is a deed of conveyance.Yes. A warranty deed is a deed of conveyance.
Labor contracts usually inculde the promise of a clean safe work place?
true -free Boone moe
