Gray purchases a home from black. gray will pay $700 a month, and a balloon payment and title transfer will take place in five years. this is a contract for deed.
A contract for deed which is sometimes called as an installment purchase contract or installment sale agreement, is a real estate transaction in which the seller finances the purchase of the property rather than a third party such as a bank or credit union or any other mortgage lender does.
It is often used when any buyer does not qualify for a conventional mortgage.
Contracts for deed are a financing option for property transactions between family members or friends. Some nonprofit housing organizations also use them to help the low income families in finding a path to homeownership.
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