Potential home buyers who fail to qualify for a mortgage might still be able to take possession of a piece of property by making payments to the property owner under the terms of a contract for deed. This legal agreement is also known as a contract for sale. In simplest terms, it is similar to – but not exactly the same as – a “rent to own” agreement many consumers use to make big electronic purchases like televisions or kitchen appliances like dishwashers and refrigerators.

A Tampa CPA from Reliance Consulting, LLC, can help you determine whether a contract for deed is the preferred method for you to use either to buy or sell a piece of property. Let’s take a look at it from the perspective of both the seller (property owner) and the buyer (property purchaser).

With a contract for deed agreement in place, the seller:

• Retains title to the property until the contract is paid in full
• Cannot demand payment in full, as with a mortgage
• Can expedite a property sale by cutting out the lender

Meanwhile, the buyer:

• Has to a way to purchase property without having to qualify for a mortgage
• Can negotiate flexible interest rates and down payments
• Cannot take out home equity loans
• In most cases, is responsible for insurance, taxes, and upkeep

There are more benefits and potential drawbacks to a contract for deed. For example, a seller doesn’t receive a lump payment for the sale of a piece of property, the way he or she would with a mortgage deal. Still, if buyers are scarce, contract for deed might be the way to go. To learn more, contact Reliance Consulting today.