Contract for Deed: The Pros and Cons.
The contract for deed is increasing in popularity for people that cannot get bank loans to finance a house. While some people support the contract for deed process, others are concerned that buyers are uninformed and do not understand the risks involved. A recent article in the Star Tribune discusses the effect of contracts for deed on properties in neighborhoods of north Minneapolis.
A contract for deed is an agreement between an owner of property and a buyer in which the owner finances the property for an agreed upon purchase price. At this point, the property owner retains the title to the property but the buyer takes possession and makes repayments on the loan in installments to the owner of the property. The contract for deed helps individuals buy homes when banks refuse to lend.
However, there are concerns that with the need for affordable housing, contract for deed properties exploit vulnerable residents. The regulations for contracts for deed are loose and property owners are not held under landlord law to repair the properties.
For a better understanding of contracts for deed, contact your attorney with questions.
To explore some of the concerns individuals have with contract for deed properties in north Minneapolis, follow the link below to the article.