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CONTRACT FOR DEED
THIS CONTRACT FOR DEED (this "Agreement") dated this ________ day of ________________, ________
BETWEEN:
__________ of __________(the "Seller")
OF THE FIRST PART
AND
__________ of __________(the "Purchaser")
OF THE SECOND PART
IN CONSIDERATION OF the covenants and agreements contained in this Agreement and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties to this Agreement agree as follows:
IN WITNESS WHEREOF the Seller and Purchaser have duly affixed their signatures under hand and seal on this ________ day of ________________, ________.
Witness: ______________________ (Sign)
__________________________________
______________________________ (Print)
__________ (Seller)
__________ (Purchaser)
SELLER ACKNOWLEDGMENT
COMMONWEALTH OF VIRGINIACOUNTY OF __________________
The foregoing instrument was acknowledged before me this ________ day of ________________, ________, by __________.
________________________________Notary PublicMy commission expires: _____________
PURCHASER ACKNOWLEDGMENT
Drafted by: __________ of __________
Return to: ________________________ of____________________________
A Contract for Deed is also known as a:
A Contract for Deed is a document used for the purchase of real property (real estate) in which the seller retains the deed (title) to the property until the purchaser makes payments in installments equal to the agreed upon purchase price. The purchaser has an immediate right to possession of the property, but the seller defers delivery of the deed (transfer of title) until he or she has secured all or part of the purchase price.
The land contract is generally used when a buyer is unable to obtain financing through traditional methods and instead makes monthly payments to the seller, a process known as owner financing or seller financing.
A Contract for Deed includes information about the:
It should also encompass more detailed information, such as numbers and dates, regarding the:
If the seller is providing financing in a real estate purchase, you should use a Contract for Deed. Generally, the purchaser will be repaying the loan to the seller through monthly installments.
A Contract for Deed is commonly used when a buyer is unable to obtain financing from a traditional lender due to poor credit rating, insufficient collateral or down payment, changed employment situation, sporadic employment history, or a high personal debt to income ratio.
The monthly payment required on a Contract for Deed is usually similar to that of a mortgage payment, meaning that a portion of the installment will go towards the repayment of the principal, and the other portion will go towards the repayment of the interest owed.
One way to determine a fair interest rate and to calculate the payments is to contact local financial institutions or mortgage brokers to find out current industry standard rates that are charged by lenders.
A purchase default is what ensures that the buyer will not violate the terms of the contract. General purchase defaults can include:
In a Contract for Deed, both the seller and the buyer have responsibilities when it comes to the property. Unlike a lender-financed mortgage, the seller retains the property deed until the purchase price has been paid in full.
Because of this, each party has different obligations in terms of insurance and property tax.
Insurance
In most cases, the seller will be responsible for insurance on all of his or her personal items that remain on the property prior to the buyer receiving the deed.
The purchaser will be responsible for insurance for his or her personal items, the property itself, as well as liability insurance.
Property Tax
Usually, the purchaser takes over property tax payments from the seller.
Sample
Contract for Deed
Create Your Contract for Deed
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