Owner financing, do I get a deed or similar?

Question

My first owner financing deal, it's a duplex the owner owns free and clear no mortgage.

I am wondering if I get a deed or title, (with receipt of my down payment,) or some sort of "lesser" title until I pay it off then I get the actual deed?

Any other info on this matter would be appreciated as well...

Thanks!!

Dan Kaisk · Answer

Hello, sorry so late in responding!!The deal ending up falling through, sorry!

Ashleigh Rosinbaum · Answer

@Dan Kaisk I was wondering what the outcome was for your situation?  My husband and I are finding ourselves in a similar position and are not sure what the best course of action should be.  Thanks!

Dan Kaisk · Answer

Thanks Jeff, so to clarify, when I hand over my down payment, we would sign and then record a promissory note with an attorney or whom?  and they would in turn record a mortgage to protect their interest.

This would NOT be a "land contract," it is a AITD or All Inclusive Trust Deed where the owner owns the property free and clear and completely finances me for the total amount, therefore since I wouldn't officially own the property until a later date, I am wondering what I receive to show that I am the basic owner for all "intensive purposes" in the meantime?

(Please excuse my ignorance as this is my very first deal.)

Jeff Rabinowitz · Answer

@Dan Kaisk, that depends. The owner could sell the property with you signing a promissory note and record a mortgage to protect their interest. In that case you get a deed. In some areas land contracts or contracts for deeds are common forms of seller financing. In that case a deed could be issued to you only when the terms of the land contract are paid off. Sometimes in a land contact sale the deed will be signed by the owner and will be held in escrow until the buyer satisfies the terms of the land contract. If the sale is by land contract make sure there is a memorandum of land contract recorded. That should cloud the title and ensure that you are notified if the seller attempts to refinance the property or sell it to someone else.