Home Buying in Albert Lea>Question Details

Tag, Home Owner in Albert Lea, MN

So how do we find someone willing to do a contract for deed on the home we have found?

Asked by Tag, Albert Lea, MN Sun Jun 19, 2011

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A contract for deed is typically offered by the current homeowner to the seller. If the seller is not able to sell you their home on a contract for deed, you will have to find an alternative funding source. But keep in mind that non bank sources of money will charge you a higher interest rate due to the increased risk of potential default.

A homeowner that is offering their home on contract for deed usually owns the home outright and will sell in this way because they can gain more in interest from the contract than they would if they simply put the money in the bank.
2 votes Thank Flag Link Sun Jun 19, 2011
Michael's answer is right on, but I'd like to add a little to it.

A contact for deed can only be offered on a home when it is completely paid for free and clear. Basically, the seller is acting as the bank and providing the financing directly.

If you can find an investor who has enough cash to purchase a home outright and who is willing to work with you - that might work, but be prepared to pay a higher interest rate, put a substantial amount of money down, and pay a balloon payment at the end of 2 to 5 years.

Also be aware that if something happens and you default, in most cases you only have 30 days vacate the property and you don't get any money back.
0 votes Thank Flag Link Mon Jul 18, 2011
So, Tag, if you want to find a private mortgage investor, better to do that ahead of looking for your house so you have that piece already done. It's iffy that seller's would want to do a contract for deed. Most sellers are a little afraid, especially in this economy. Most want to get their place sold and be done with it, rather than having to worry they might have to take it over again after someone else has lived there a while. It might be a minimal risk, depending on how reliable the new owners are, but it's still a risk.

Does that make sense?

Good luck!!
0 votes Thank Flag Link Wed Jun 29, 2011
If it doesn't work out with that home specifically your best bet may be to find a seller willing to sell a home on a contract for deed since your options are limited. The process in finding such a home is very much the same as with traditional financing...looking on the MLS is a valuable asset and look specifically for homes willing/able to sell on a contract for deed ...and of course the best way (in my opinion) is to contact a real estate professional, let them know what you're looking to do and put them to work for you.
0 votes Thank Flag Link Sun Jun 19, 2011
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