South Florida Real Estate and...


Contract for Deed Sales are Regaining Momentum

More agents are being asked by their buyers to find homes they can buy with a contract for deed.


This is one of the alternatives used for buyers who have the money to put down, but don't have good enough credit for traditional financing. 


Contract For Deed Buyer Beware


Real estate agents who help their buyers do contract for deed sales need to understand the pros and cons of these transactions.


Get educated before you put any buyer into one of these contracts. 


Contract for deeds became popular in the 1980's because of the super high interest rates, 18% and 21% we saw during those years. They have been around since the 1960's. After the interest rates went back down and traditional financing becomes affordable again, contract for deeds are no longer commonplace. 


But now, even though interest rates are low... there are many buyers who have been through a short sale or foreclosure and have not met the new guidelines for traditional financing, this is why you are seeing a rise in buyers asking for contract for deeds. 


While it is a great way to get into a house, there are pros and cons for both the buyers and the sellers in contract for deed transactions. 


A contract for deed is where the buyer pays high interest installments towards the purchase price of the property. 


What a lot of people don't understand is this is not a regular warranty deed or trust deed. There is no foreclosure process that has to happen in order for the seller to get the house back for missing payments. 


The seller holds the deed until the house is either refinanced or paid off. This is why it is called, contract for deed. The buyer is in a contract to get the deed upon meeting the agreed upon requirements. 


The buyer does not accrue equity in the house during the time the contract for deed is in force. 


Sellers can charge whatever interest rates they want to charge, with many hovering around 10%. 


Buyers MUST make their payments on time. 


If a buyer does not make his or her payment on time the seller can evict the buyer just like they do to a tenant who did not pay their rent.  


The seller can evict the buyer in 30 to 60 days for missing one payment. 


There are also some companies that bought up foreclosed properties and do contract for deeds with buyers on their inventory of homes. Some of these have poor repuations for the way they treat the buyers and others are very helpful including providing services to the buyers to repair their credit. 


So as always, do your due diligence, understand what you are signing, understand your responsibilites in whichever position you are in. 


Always prepare your buyer by asking them if they really understand that the seller can evict them for missing even one payment. They need to get that before entering into this kind of contract. 

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In real estate we service Wellington, Palm Beach, Royal Palm Beach, Port St Lucie, Loxahatchee, Boca Raton, Delray Beach, Boynton Beach, Lake Worth and surrounding towns in Palm Beach County, Broward County and Miami/Dade County.


 Nestor Gasset is the real estate broker of International Properties & Investments LLC. Click on our profile to read more about Nestor Gasset and his qualifications and experience.  We sell properties others could not sell.  


Call Nestor Gasset today to work with him in reaching your real estate goals: 561-753-0135

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Katerina Gasset is a real estate agent who is also a digital marketing strategies, website designer and consultant for real estate brokerages, agents, entrepreneurs and small business owners. 


Katerina is a Certified Digital Marketing Funnel Expert. She is the creator and owner of Listing Experts Academy teaching real estate agents and brokers how to dominate their marketing on the internet. 


She develops products and online courses to empower real estate agents to reach their marketing, SEO, social media and branding goals. Katerina Gasset is a blogger, author, podcaster, and keynote speaker.  


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Comment balloon 10 commentsKaterina Gasset • July 28 2016 03:42PM


I have initiated several contract for deeds over the years Nestor & Katerina Gasset but I've never had a single one make it to COE.

Posted by Bob "RealMan" Timm, Bob Timm, Project Coordinator for Tivoli Homes (Tivoli Custom Homes) over 2 years ago

We have not either. We have had situations where the buyers stopped paying and refused to move even when evicted and then destroyed everything. Not a good thing. 

Posted by Katerina Gasset, Get It Done For Me Virtual Services (Get It Done For Me Virtual Services ) over 2 years ago

I haven't done a contract for deed in many years. With that said we used to do a lot of them back in late 80's & early 90's.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) over 2 years ago

One major problem for the sellers too.

Any bills owed by the buyers can be placed as a lien on this real estate as soon as the Land contract starts.

Posted by Bob Crane, Forestland Experts! 715-204-9671 (Woodland Management Service / Woodland Real Estate, Keller Williams fox cities) over 2 years ago

Hi Katerina. I can see them coming back into the market with many buyers not able to qualify for conventional financing. In Texas, Contracts for Deeds have to be drafted by attorneys. Most attorneys prefer the WRAP instead of the Contract for Deed. Buyers do need to enter these type of transactions with a lot of education.

Posted by Jerry Newman, Texas REALTOR, San Antonio Military Relocation (Brown Realty, 210-789-4216, over 2 years ago

In the past, we would see these type of purchases. Now a day not many at all. 

Posted by Frank Rubi, (Frank Rubi Real Estate, LLC) over 2 years ago

I can't recall ever having a transaction like this...enjoy your weekend!

Posted by Kristin Johnston - REALTOR®, Giving Back With Each Home Sold! (RE/MAX Realty Center ) over 2 years ago


Good explanation for using a contract of deed. We have something similar here but I have never heard of it being used. cheers cvc

Posted by Curtis Van Carter, Your Napa Valley Broker Extraordinaire (Better Homes & Gardens Wine Country Group) over 2 years ago

I've heard that several markets, but I'm sure about California or New York specifically.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 2 years ago

As with the above, I was thinking that it was something new and fresh. Just a very interesting idea overall.

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) over 2 years ago

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