Reader Question: Can I purchase a business using a contract for deed?

One of the recent searches that led to the Bloomgren Hanson website asked the question, “Can I purchase a business using a contract for deed?” The searcher didn’t find their answer here (until now). The simple answer to the question is no, but that doesn’t mean you cannot accomplish the same result using different tools.

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How To Cancel a Contract for Deed

A contract for deed is a form of seller financing where the seller sells real property in exchange for installment payments over time.  In Minnesota, contract for deed transactions are governed by a statutory framework transferring all but an equitable interest in property to the buyer.  The buyer is responsible for all aspects of the home (taxes and insurance), repairs, etc. after the contract for deed is signed and filed with the appropriate county office.  The buyer usually pays the seller in monthly installments over a number of years and only receives their deed upon full payment of the contact. For more details on contract for deed options, see here. One of the most common questions our office sees regarding contracts for deed, is what happens if the buyer gets behind on payments.

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Contracts for Deed: Not Your Typical Rent to Own

Folks regularly think they want to enter into a “rent to own” agreement when what they are more appropriately looking for is a contract for deed.  A rent to own agreement is basically a lease where the payments are applied to a reduction in purchase price on an option to buy real estate in the future.  A contract for deed is an actual transfer of property, where the contract for deed seller (or vendor) transfers almost all of his property rights to the purchaser (or vendee). It is an excellent option for both buyers and sellers who choose seller financing.  The statutory rules for contracts for deed in Minnesota can protect both the seller and purchaser.

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Are you “cra-zay” to consider seller financing to get your home sold?

In the current hey day of tightened lending standards, parties to real estate transactions are becoming increasingly clever in trying to close real estate transactions. More often I am working with sellers who are being asked to and who are also willing to back a percentage (some times a large percentage) of the purchase price. Are they cra-zay? Continue reading “Are you “cra-zay” to consider seller financing to get your home sold?”