Often the author receives calls from individuals complaining that they entered into a “For Sale by Owner Agreement” also known as a “Contract for Deed.” The clients often state that they have paid the seller all of the money owed under the agreement but that the Seller has not or will not convey title. Sometimes the Seller becomes deceased and obtaining title becomes more of a challenge. It often requires court intervention.
Another option that the Buyer has when the Buyer has not paid the note in full is to convert the “contract for deed” into a seller finance package where the Buyer can obtain title sooner than later. In such a situation, a purchaser, at any time and without paying penalties or charges of any kind, is entitled to convert the purchaser’s interest in property under an executory contract into recorded, legal title in accordance regardless of whether the seller has recorded the executory contract.
If the Buyer tenders to the seller an amount of money equal to the balance of the total amount owed by the purchaser to the seller under the executory contract, the seller shall transfer to the purchaser recorded, legal title of the property covered by the contract.
The Buyer would need to provide a promissory note that is equal in amount to the balance of the total amount owed by the purchaser to the seller under the contract and that contains the same interest rate, due dates, and late fees as the contract.
Then, the seller shall execute a deed containing any warranties required by the contract and conveying to the purchaser recorded, legal title of the property and the purchaser shall simultaneously execute a deed of trust.
We enjoy helping clients resolve these matters.