Contract for Deed - need your expertise

[Frihed89]

Originally Posted by MikeJaquish

Nope.
Talk to an attorney who does these deals and can paint you a picture of the significant downsides for you in the scenario.

You want to receive unencumbered title, IMO, if you are putting money down and calling it a "financing."
Despite all assurances that the seller is paying the mortgage, what is your security if he hits one of life's major speed bumps? Dies. Bankruptcy. Incompetence.
If interest rates skyrocket, what is your assurance that the owner's lender will not accelerate the loan to get a low interest loan off the books? Will the owner be able to pay off? Will you be able to finance it conventionally and not lose your deposits?
Will your deposits be in trust until your balloon is satisfied?
What if the house doesn't appraise in 5 years and you have to walk away or cough up more money?

My thoughts would be to do a rent-to-own, with no rent above market pricing, and no deposit, but a first right of refusal if the owner was to try to sell.

The upside being?

[jackmichigan]

Originally Posted by 399083453

Really think about what your doing and seek help from a local attorney for advice and paperwork before doing this deal.

Originally Posted by MikeJaquish

Nope.
Talk to an attorney who does these deals and can paint you a picture of the significant downsides for you in the scenario.

Originally Posted by rrah

In this instance I would forego a real estate agent and go directly to a lawyer.

Originally Posted by jackmichigan

Make sure that you get an experienced real estate attorney to guide you through this, if you decide to make an offer. Your attorney will likely insist for the Seller to provide a title insurance policy. Don't neglect to do any of the due diligence items that you would normally do in a regular purchase. Your attorney may also require that the Seller execute a Warranty Deed which can be held in escrow until the terms of the contract are paid off.

Originally Posted by MikeJaquish

And all this back and forth on various topics just supports buyer engaging an attorney immediately as part of any contract drafting and negotiations.

Just so you don't lose sight of your primary concern, I've highlighted the most essential information provided in this thread. Don't just "think" about getting a good real estate lawyer--get one.