A Contract For Deed is a legally binding contract that allows a buyer to purchase property by making regular payments to the seller until the balance is fully paid off. It is also the preferred option for selling financing in a majority of states.
Contract For Deed vs Land Contract
An important feature of a contract for deed template is that the seller will retain legal title to the property until full payment is made by the buyer (buyer will only acquire legal title to the property when the final payment is completed). If the buyer defaults on the payment the seller can repossess the property.
Key Terms In a Contract For Deed
The average length of a contract for deed will be 5 years (or another amount of time agreed upon by the parties).
With respect to paying off a the full property balance under a contract for deed template, the parties may either agree that: 1) the value of the house be divided into equal payments; or 2) that regular payments will go towards paying off the balance in balloon payment at the end of the term.
Note: Stock and boilerplate terms won’t apply in a contract for deed template.
