Seller Financing and Holding Unrecorded Deed for the Duration

[David de Luna]

My broker tells me if two parties agree contractually that the seller will hold onto and not record the deed on a seller-financed deal that, no, the buyer cannot later compel me to record the deed. My deal is to offer a house seller-financed until the balloon is due in 5 years at which point, I either give the deed to title to record upon final payment or we're all done and they move on or renew - push the balloon out further - for a fee (non-applicable to the principal), on a 30 year fully amortized loan.

Another question is what if anything, do I have to do if and when they wish to cancel the contract and move out (and stop paying). I never recorded the deed so it's not a foreclosure, so I'm guessing we each pick up our own respective marbles and go our own way?

And what if he simply stops paying? I don't have a lease to show to begin eviction. So I can only go through foreclosure - when he's not on the deed to begin with?

[Clint Shelley]

@David de Luna

I think in some states the buyer has an equitable interest in the house, so even though your holding a contract for deed, you would still have to foreclose. I am going through the same exercise now, as I have a rental I want to sell contract for deed on a five year balloon. I have an appointment with my attorney to see what I need to do. I think this will be a state specific answer and I'm sure there will be many ways others have done it.

Clint