Q: Why do they want to change my Contract for deed to Vendor's lien deed?
I am purchasing my home with a Contract for deed for the last 4 years. Received an email today from seller wanting to change my Contract for deed to a Vendor's lien deed. What does this mean for me?
A:
Without being able to read minds, my best guess is property taxes. With a contract for deed, you don't own the property and therefore are not responsible to pay the property taxes. Of course, you are running a huge risk that the owner ultimately won't transfer title, or that the owner has pledged the property as security for a loan (like a mortgage) and may lose it to foreclosure, or that a creditor of the owner will seize it to satisfy a judgment, or that the owner will die and his heirs won't follow through with the sale, or that the owner will file for bankruptcy and cancel your agreement as an executory contract or that the bankruptcy trustee will require that it be sold to pay his creditors.
If the transaction is converted to a sale with a vendor's lien retained, you do own the property and are therefore legally responsible to pay the property taxes.
Why not simply ask the owner of the property why they want to make the change?
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