How do you contract for deed?

Question

Hi BP,

I’m selling some land right now FSBO, and have multiple offers coming to the table it looks like.  My main problem is I don’t know how to put the paper work together.  I’d love to take a cash offer, however most people are interested in my seller financing I offered (including me).  Does anyone have any experience or knowledge on how to put together a contract for deed, and how to put someone in escrow?  Is there somewhere to get these template forms or something?  I planned to just have a realtor put the sale together, but not sure if he’ll know how to put a contract for deed sale together.  Any thoughts are appreciated!

Amy Aziz · Answer

Account Closed I recommend closing with an escrow and title company and they will work all that out.

Account Closed · Answer

@David M. What like save me time and point me in the right direction or tell me short cuts?  Heck yeah, that’s what Bigger Pockets is.  Every time I post a question I go and try to help someone else out on something I know, which is construction and try to save them time by thinking about their problem and trying to help solve it.

Adam M. · Answer

Account Closed

Why bring a realtor in and give up 6% at this point?? Definitely not worth it. You can handle all of this with a title company or RE attorney if it's more complicated.

Account Closed · Answer

@Amy Aziz

Thanks!  My listing had over 2,000 hits in 10 days and 150 saves on Zillow.  That’s the only place I listed, so I have like 10 people wanting to come from out of state to look at it.  I just learned my 2% owner financing is way low, so I should have done my homework before I thought I was going to compete with big banks.   So I want everyone to give me their offer by this weekend, and I guess that will just be through email or phone call etc.  then whoever sounds the best illget serious with in the paper work with title company.  The title company has a lawyer  so I may be killing two birds with one stone.

Account Closed · Answer

@Amy Aziz

Aha, ok!  Too simple.  I have a title company that did all the work when I bought it and is wrapping up quiet title work now, so I’ll just ask them if they can hammer it out.  I guess my only problem with that is, I think I can look at multiple offers if I wait til Monday to make a decision and have everyone’s offer valid for 5 days.  Hard to imagine a title company doing the paper work for 5 people, but I can send them all to my realtor and the higher the sale price we land, the higher commission.  (Realtor just talked to me and told me to field people for proof of funds before I send them their way if I go with them).  They also told me contract for deed paperwork is not cheap.  Thanks, just thinking out loud as I learn

Amy Aziz · Answer

Account Closed I am a little confused do you have a single buyer or 5 people buying? As for the agent, I would drop him or her. Straight up you would still need to close with an escrow and title company. So there is the closing fees on top of the commission for the agent. If you have a title company you worked with to buy the property, I would straight up call them and ask if they can help you with the closing. As much as escrow and title companies drive me crazy with their lame rules I trust them. Since they have to remain neutral. You can always use a lawyer it will just cost more but they are quicker.

David M. · Answer

Account Closed

Sorry, I guess I didn't understand.  As a whole, I agree with @Amy Aziz.   however you do your transaction in CA I should think this is no different.  In NJ, land isn't residential so as an agent i can only write a LOI to let attorneys draft up a contract.

Let an attorney figure out you contract and use either the attorney or another entity doing the closing agent function for your escrow.   You can't put "someone" in escrow, at least I've never heard of it for a real estate transaction.

Maybe I've missed the whole point.  Let me ask you:  what specifically is special about your issue?  All I read is you are selling a piece of land yourself and you want to do your own contract and your own escrow.

David M. · Answer

Account Closed

So, you want somebody on BP to do all your work for free?

Barb Asay · Answer

@Jonathan Greer

I have done multiple FSBO deals and have sold on contract once.  I think you're over complicating it.

All you need to do is pick an offer and vet the buyer.  Run a credit check if you want or get proof of funds.  Whatever makes you comfortable that they can pay.  Than fill out a purchase agreement with all the details and turn it over to either an attorney or a title company.  In my area an attorney is standard and I gave him the purchase agreement along with the buyers contact info and within a couple weeks and for a couple hundred bucks I had a properly filed and executed contract.  You'll collect your down payment and installments after that according to your contract.   Your attorney can provide an amortization schedule or they are available free online.

William Alexander · Answer

@Jonathan Greer

You could always copy and paste one and hope it works and the county accepts it!  I’ve done it before.....Or hire an attorney for a few Hundy and sleep better knowing it’s correct.  Good luck!

How do you contract for deed?

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