We bought a house contract for deed 2 years ago, with the balloon payment due in one year. We now need to move to another city for my husband's

Asked by momshell, Sioux Falls, SD Thu Dec 27, 2012

job. What are our options to get out of our contract so that we can buy a house in our new city? Can we sell this house while we are still under contract? Is there a process to sell it back to the seller we bought it from? Etc.....

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Don Welker, Agent, Sioux Falls, SD
Tue Jan 22, 2013
You can negotiate with the seller or sell the house you are in. There could be an exit clause in the contract too that could help answer the question but most do not have that in the contract. The seller may want the house back but most of the time don't, so I would be prepared to put it on the market and sell it.
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Gary Landeen, Agent, Sioux Falls, SD
Mon Jan 14, 2013
The other responses are correct, but might not help you, if time is of the essence. The third option is to default on the contract for deed. Yes, you will lose your deposit/ down payment, unless the seller is willing to voluntarily release you from your contract, and negotiate a settlement.
Most if not all mortgages from 1988 on have a "due on sale clause" which means that the lender can foreclose on the borrower, should they sell the property on a CFD, without the lenders permission. If your seller still has a mortgage with this clause, they legally could lose the property through foreclosure themselves, especially, if the lender is aware of the CFD. In this case, you would most likely lose your equity also.
The downside to default, is if you apply to a lender, for a new mortgage in your new location. The lender will most likely want to verify your residency for the past several years. They will send a letter to your CFD owner, verifying your occupancy, and payment history. Without a favorable response, getting a new loan may be difficult. Leaving on good terms with your seller will be important. If the seller will agree to consider your time at the home as rent, instead of a purchase, and give a good reference, it might be a win, win situation, for both of you.
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Dick Hahn, Agent, Sioux Falls, SD
Fri Dec 28, 2012
My group just sold a home that had a contract for deed on it two weeks ago. You should be able to sell your home and pay off the contract holder. Of course, it would depend on the language in the contract, but it's likely that you can.

I can do a Comparative Market Analysis for you to help determine the value of your home. I'll be happy to help.

Sincerely,
Dick Hahn
Keller Williams Realty Sioux Falls
cell 940-5100
email dickhahn@kw.com
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Brent Baker, Agent, Sioux Falls, SD
Thu Dec 27, 2012
You have a few options. Yes you can place the house on while still under contract, the person who is selling it to you will be paid off at the close of sale however like any loan you must sell for enough money to cover that debt and the costs associated with selling it. You could approach the contract holder to discuss whether he / she would consider one of several other options but the seller / contract holder is under no obligation to alter the agreement. Call me at 605-310-0297 and we will talk about it.
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