Join our mailing list for special offers & resources:

Many Note Buyers Won’t Buy a Contract for Deed


[Watch video on blog]

I’m not sure why people use a contract for deed (CFD):

  • it doesn’t get around the due on sale clause
  • it doesn’t help the seller defer capital gains
  • the buyer (vendee) has an equitable interest, so you’ll have to foreclose if they default
  • the seller who is still on title can potentially encumber the property
  • the seller’s (vendor’s… and possibly the vendee’s) bankruptcies, liens, judgments and probate issues will affect title 
  • the note buyers who will pay the most for a cash flow would usually rather have a note & mortgage, or a note & deed of trust… the contract for deed will have to be converted in order for the note holder to be able to sell their note

Unless there are some extenuating circumstances, I would never use a contract for deed.  If there’s a small down payment, then use a title holding land trust instead… more protections and advantages all around.

Check out the Note Queen Store!

Share this article