In our article for contract for deed vs selling we will discuss how our agents can help with listing either way, no matter which decision the seller chooses.  With selling on a contract for deed you are open to a very large buyer’s market, which includes any with bad credit.  With selling the traditional way on the MLS only looking for a buyer who can obtain financing, it’s expected that they have very excellent credit in today’s world.  The market for those with excellent and very strong credit is far less than it was in recent years.  Both ideas have there pluses and minuses, we encourage you to read the article to best understand the differences.  When selling you are planning on getting a finance buyer this month that can cash you out as the seller whereas with the contract for deed you can be expected to wait a few years as most buyers do have that bad credit that they have to work on.

To refinance a contract for deed, is the goal of most buyers in the overall contract for deed transaction.  A buyer would like to obtain financing so that they can get the deed to the property into their own name.  The seller would also like very much for this to happen as the seller than gets their full purchase price when they own the house free and clear and when they don’t own the house free and clear it takes the seller off the hook and helps pay off their existing financing and releasing them of their mortgage obligation.  Based on local research with a top mortgage broker it is said that anyone that chooses to get financing in less than 12 months after a contract for deed, they will be seeking new financing like a new purchase under this premise and guidelines.  For those who wait over 12 months (which is most) they will have the opportunity to use the appraised value in the transaction for an LTV (Loan to Value) that satisfies the lenders.  Of course the buyer will still need to work on their credit and go through a regular financing process to get approved, but most would agree that a refinance is easier than a new purchase when it comes to getting financing in your own personal name.

Our agents understand that you have specific contract for deed questions, and we believe we have the answers to most of them.  You are more than welcome to email, text, call, or leave a voicemail to ask your questions, and we’ll try to get back to you as soon as we can with the correct answer.  We are here to answer buyers and sellers questions that arise along the way.  The most common questions that arise are how much of a down payment is needed, the answer is 7% to 20%, the more you put down the more homes you have to choose from.  How long is the contract for deed 3 years in most cases, a seller prefers less, but knows 3 years is often needed.  Special circumstances allow for 5 to 7 years in rare cases, but it’s hardly needed based on someone’s credit.  The interest rate and sales price is negotiable.  The commissions should be paid by the seller and
listing agent out of the down payment.  The buyer should see their down payment credited towards the overall sales price for a reduction in balance.

There are going to be a unique set of contract for deed laws for the state of Minnesota.  We are not attorney’s but our agents are happy to answer some
common questions that relate to contract for deeds, and are here to offer a local real estate attorney than can make you feel more comfortable about the real estate laws that relate to contract for deeds in the state of Minnesota.  Our agents are going to help handle the paperwork and put you in touch with a title company, that is often, but not always over seen by an attorney, this should give the buyer and seller more comfort in the transaction.  A lot of the laws, rules, and what’s standard in a transaction is covered in the actual paperwork.  Our agent will explain a lot of information to you along the way, and the title person is happy to explain a lot to you as well.

If you want to look up anything tax related, write-offs, deductions, interest rate rules, we encourage you to research our IRS and contract for deed article.  This website can be very beneficial for depreciation write-off, depreciation recapture, and the idea of depreciating the property itself, land is not depreciated, land improvements are accelerated faster than the home itself, and personal property is depreciated and accelerated at an even quicker pace.  Also there are topics such as capital improvements, repair write-offs and everything that does and doesn’t qualify as an expense and write-off as a home owner.  Also it changes when one lives in the home as an owner occupant vs. if they own the home as a rental and it’s in non owner occupied status.