Answer:
Seller retains the right to the property
No professional appraisal is required, so you might pay more than the home is worth
Explanation:
A contract for deed is one that does not have the standard transfer of title from the seller to the owner. Rather the seller of a property retains title ownership while the buyer pays installmentally over time.
This agreement is common where the buyer does not meet requirements to obtain a loan. A small down payment can be made initially.
Disadvantages of contract for deed includes:
- Seller retains rights to the property, and he can cancel the contract if the buyer defaults even once on his payments.
- No professional appraisal is required, so you might pay more than the home is worth. There is no requirement for appraisal of the property so the buyer does not have a reliable estimate of property worth.
