I just went through this. Make sure you get an appraisal of the home before you settle on a purchase price. If the house won't value for the amount, walk away! The only party that will benefit from a contract is generally the seller. If the amount is at a fair market value and you can agree to a reasonable contract, make sure it's not for only one year with a balloon payment. Ask for five years or more if a balloon payment is written within the contract. You will have an interest rate attached to the contract in most cases. Also, if the home you are wanting to contract is a multi-family home, make sure that any comps used for value purposes are also multi-family homes. Single family homes tend to have more value in Richmond. Just so you know....I'm living it right now! Also, a contract can be written in many different ways. Make sure there is some benefit to you, not just the seller. Have the contract recorded and make sure you do an official closing to protect yourself.