Anyone have any experience with a contract for deed?

[Marmee]

My mom bought her first vacation home this way. She eventually got a loan about 5yrs into it because the owner was moving out of state & just wanted to be done with it. So she paid him off. It was worked well for all parties. When I sold our first home we did a personal loan to the new buyers for about 25K. They made payments for about 2 yrs & then paid us off in a chunk. As long as the people are trustworthy (I might run a credit check), you use a lawyer or other RE professional to draw up the paperwork, it can work out well.

[sjh722]

I would use a lawyer to draw up the contract. Real estate law can vary a lot state to state and some states are very tenant-friendly; whatever $$ you pay now might save you a lot of trouble later if they quit paying rent, refuse to move, etc etc.

In my area, a contract sale typically requires a down payment (of which all or a portion is forfeited if buyers fail to close), then a portion of the monthly rent goes towards the purchase price and there's a 2- or 5-year balloon payment after which they have to obtain a traditional mortgage. (Most sellers don't want to hold someone else's mortgage for 15 or 30 years.)