How to Write a Contract for a Deed
A land contract, also known as a contract for deed, is a way for a buyer to become the owner of a parcel of property without securing a loan from a bank or other financial institution. Generally, the seller finances the arrangement. The buyer makes a down payment and monthly payments with interest to the seller. In return, the buyer may remain on the property and use and enjoy it. When the entire purchase price is paid off, the seller transfers title to the property via a deed to the buyer.
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Instructions
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Title the document "Contract for Deed" or "Land Contract." Write the date.
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Divide the contract into major sections. Land contracts must address the following information: the parties involved, the legal description of the land, the terms of the financing (including interest and the down payment), whether any liens or encumbrances exist on the property, the type of deed to be given when the purchase price is paid in full and the buyer's and seller's rights and obligations.
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Create subsections to address individual issues within the major sections. For example, in the "Seller's Obligations" section, you could include subsections such as "Duty to Record" and "Repairs and Maintenance."
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Write out the specific terms of the agreement under the appropriate section or subsection. Use plain language; avoid legalese and archaic language where simple, easy-to-understand words will work.
For example, in the "Duty to Record" subsection, you could write "Seller agrees to record a copy of this contract in the land records office at [address] within five days of signing this agreement."
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Include space for the parties to sign and date the agreement. Review the agreement and revise before providing the parties final copies.
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Tips & Warnings
Land contracts can be complicated documents. Before drafting, be sure that you have all the material information regarding the transaction. To help create the document, review other land contracts and templates. A law library is a good resource.
Land contracts are legal documents that can affect the legal rights of the parties involved. The contract should be written in clear and concise terms; nonetheless, the transaction is often complicated. Readers should seek independent legal assistance before proceeding.
