how can i find contract for deed for sale as option with sellers? Would this be better then renting?

Asked by Brian Hussey, 55447 Thu Jul 14, 2011

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Mark Claesse…, Agent, Coon Rapids, MN
Thu Jul 14, 2011
Brian, there are some nice answers below. Just let me add this. There are great options with CDs and they can be a huge benefit to a buyer. The huge benefit comes, however, with risk. The risk must outweigh the renting both on paper and in the heart of the buyer.

I will not tout myself as an expert, but I have done more contracts for deed than any other agent in my office and can tell you that so far I have successfully negotiated some great deals for my buyers with these contracts for deed. I have excellent attorneys at my disposal here and they have been VERY key and important in getting these done right. I have also been successful on a couple of occasions in getting some sellers to accept a contract for deed offer when they initially were not offering the property and actually told us NO when we asked if they were interested. I have a good system for running my queries and interacting with the prospective CD seller and it seems to work.

If you would like to discuss all of your options, want to run some number (renting vs. buyin on CD terms, etc., please feel free to give me a call.

4 votes
I need a home asap I was jacked around by us bank. The only way I get get a home is on a cd.i need help bad here. I'm on disability I really need help fasten you help
Flag Sun Jun 4, 2017
Steve Vennem…, , Maplewood, MN
Tue Nov 12, 2013
YOu can find 100s of homes in Minnesota and wisconsin at

if you are not in Minnesota goto Http://
1 vote
Chris Block, , Saint Paul, MN
Wed Nov 13, 2013
There are different ways to find CD properties.

1) Craigslist- FSBO (For Sale By Owner) will post on Craigslist and offer CD financing many times even if it is not initially offered. You just need to know how to structure the deal.

2) The MLS- We have filters on our State-Wide database where I can custom a search specifically for only CD properties, and you get notified instantly. Between Craigslist and the MLS you should catch almost all CD listed properties.

The problem, and always will be, is INVENTORY. Contract for Deed listings account for less than 5% of all home sales...that does not give you very many options.

So a 3rd way is I created my own program where you can now buy any property off the MLS; not just the stuff that is already advertised. That allows my CD clients to access the 95% of inventory they previously could not buy. All you have to do is contact me for more info.

As to your second question it is quite easy. You compare rent to a mortgage payment first and see which will be more expensive. You then review the market and make some decisions on where we are heading. If you believe prices will go down probably not a good time...but if you think prices will go up than it is a great time to buy. Like others have said the balloon payment is a refinance scenario not a purchase. You get equity in home-ownership versus nothing in renting. You do also get the MID deduction as long as you keep good records, so there is a tax benefit as well.

I also see you went through foreclosure maybe July 2011. There is a new FHA program where you can buy in 2 years if you meet some qualifications instead of the typical 3. It just came out this fall, so if you want to try traditional financing we can attempt that first.

Christopher Block
0 votes
Could you possibly referee to someone in Louisville Ky that has knowledge of CD situations? Pamela Mcvey
Flag Wed Mar 29, 2017
Lori Johnson, Agent, Blaine, MN
Fri Jul 15, 2011
When purchasing on a contract for deed, it is best to find a seller who owns the property free and clear. This avoids the issue of whether there is a due on sale clause in their mortgage plus the issue of whether or not they are paying the mortgage after receiving your payments. The benefits of a contract for deed to you would be tax benefits, pride of ownership and your payments applying to the principal balance versus going to your landlord with no equity build up.

There are risks too. Will you be able to refinance when the contract for deed becomes due and payable in full?What will the interest rate be then? Would the seller be interested in extending the contract for deed if the interest rates are high then? If I default, I only have a short time to make up the payments.

Sometimes a contract for deed is the only option for a buyer to purchase and the benefits out weigh the risks.
0 votes
Don Tepper, Agent, Burke, VA
Thu Jul 14, 2011
Here's a link to a blog I wrote on finding lease-options and similar opportunities (of which contract for deed is one): Some (not too many are on the MLS). You can find or create more on your own or with the assistance of a Realtor who understands creative financing.

Hope that helps.
0 votes
Jessica Edwa…, Agent, minneapolis, MN
Thu Jul 14, 2011
There are great answers on the mechanics of the CD, but here are some cautions:
- If there is an underlying mortgage, there is likely a due on sale clause. That means once the CD is recorded, the mortgage company will have the right to foreclose immediately (No Mr. Nice Guy). I speak from experience.
- If you don't record the contract, it becomes difficult to enforce certain elements of it. This could mean loss of the downpayment, or other unpleasant issues.
- Good legal advise is more important for a CD than with a purchase or lease. Most purchase agreements use standard forms that have be reviewed & updated ad nauseum. Rental agreements are designed for flexibility. CD's are too often drafted by amateurs. You want this handled professionally for a well understood, well crafted agreement.
- Operate with a "worst case scenario" mentality. Understand your risk tolerance & get great 3rd party opinions. You can do really well, as long as you are making educated decisions.
0 votes
Karl Scherman, Agent, Mounds View, MN
Thu Jul 14, 2011
It can be better than renting because you have an actual piece of title and it's also worth mentioning that once that contract (balloon payment) is coming due and you (hopefully) have some equity the financing involved isn't a purchase but you refinance...this can also be advantageous in the closing process and the closing costs...any of us would, of course, be happy to set you up on an auto e-mail and depending where you would like to be an active agent may have properties listed with such options...
0 votes
Chris Block, , Saint Paul, MN
Thu Jul 14, 2011
Just contact me and I will set you up with an auto email
0 votes
Thomas Simon…, Agent, Edina, MN
Thu Jul 14, 2011
Brian: As a buyer a C?D is owner financing without qualifying and the closing costs are much less. The downfall is the cancellation period is much shorter. The upside is payments are very flexible however there is usually a ballon payment after five or more years. The title should always be checked prior to closing to make sure what underlying loans or liens there might be. If I can be of assistance please email me. I have been handling these type of sales for over 25 years and have a lot of experience in them.
0 votes
Cameron Piper, Agent, Forest Lake, MN
Thu Jul 14, 2011

The MLS allows us to search for properties that are for sale with a contract for deed as an option. For example there are 7 properties for sale right now in 55447 where the seller would accept a contract for deed in the sale of the property. Let me know if you would like me to send you a list of those properties.

Cameron Piper
Coldwell Banker Burnet
licensed MN Broker
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0 votes
Jennifer Hen…, Agent, Edina, MN
Thu Jul 14, 2011
If you have a down payment a contract for deed is a great alternative option if you are unable to currently obtain financing. Most sellers do prefer a 10% down payment, but that is negotiable. It is a great way to get into a property and build equity versus renting and often times your payment is lower on a contract for deed than you would be paying with rent. It is best to work with an agent who is familiar with contract for deed options. Those options are of course more limited as fewer sellers are willing or able to offer a contract for deed on their property, and if you can obtain financing it will significantly open up your options...but if financing is not an option and you need time to build or re-establish credit seller financing is a great way to go! If you have a specific area and payment range you are looking for feel free to send me a message and I can set you up on an auto search of homes available that will offer seller financing. Let me know if you have any additional questions! Thanks!
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