Real Estate Law
Have Real Estate Law Questions? Ask a Real Estate Lawyer.
Hello and welcome to Just Answer. No attorney-client relationship or privilege is formed by speaking to an expert on this site, the answers are for general information. By continuing, you confirm that you understand and agree to these terms.
A contract for deed is an agreement between the seller and buyer for the purchase of real property in which the payment of all or a portion of the selling price is deferred. The purchase price may be paid in installments over the period of the contract, with the balance due at maturity. When you r complete the required payments, the seller must deliver to you good legal title by way of a deed or assignment of lease. Under the terms of the contract for deed you are given possession of the property and equitable title to the property, while the seller holds legal title and continues to be primarily liable for payment of any underlying mortgage. This option is good if you do not qualify for a mortgage or will obtain a high interest rate.
A purchase money mortgage is usually given as part of your consideration for the purchase of real property, and delivered at the same time that the real property is transferred as a simultaneous part of the transaction. It can be given as any percentage of the loan but is usually issued in conjunction with and fill a gap between your down payment and a new first mortgage with a bank or a mortgage assumed from the seller. A disadvantage of a purchase money mortgage is that if you default under Pennsylvania, the holder of the mortgage, may obtain a deficiency judgment in a separate action after the foreclosure sale.
I hope this helps with your question.
A contract for deed would be easier. If the buyer defaults on the contract you can give the notice required under the contract, keep the monies paid to date, and take back the property without a judicial foreclosure process, and evict the occupants. It is also much less costly.