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Contract 4 Deed and Lease with Option to Buy?
My husband and I had a little financial issues and we had to sell our house for much under what our loan was for. Anyway, our credit is not that great anymore. We were under the impression we were buying this new home under contract for deed. The guy we are buying from is a family friend. Anyway, we have been here since October and have not signed a thing. We pay $1,150 a month. I called and asked him today to bring me over something that showed what I have paid in interest so I could use it for tax purposes. He came over and brought me a lease to sign instead. He told me that he was going to get me the renters credit instead because I would get more back on my taxes that way. So, does this basically mean that I have been renting for $1,150 a month?? We were told it was contract for deed. We paid no money down and that was why the "house payment" would be higher. What is going on? Was I taken advantage of? The house does have lake shore but no garage...we were going to put a garage up this summer but not if we are "renting." I was also told that if we wanted to change it to contract for deed then it would cost us $2,000 and cost him $2,000 ($4,000 total) for the paperwork.
Public Comments
- Your contract to buy is NOT deductible. You have no paid any interest, you did not borrow any money. You can not use it for a tax write off until you exercise your option to buy it. As you are now you are legally a renter. You are not being taken advantage of, you are not the legal owner, you are not on the deed and you do not have a mortgage.
- A contract for deed is risky for you and not recommended. When you make the final payment the seller deeds the property to you. You have no assurances he has clear title, paid taxes or has had liens attached to the property. A lease with the option to purchase offers you more protection. When you exercise the option to purchase there would be a title search to insure you the seller can convey marketable and insurable title. Now, if the document he gave you doesn't state what the sales price is and when you can exercise your option to purchase, then I think you signed a straight lease. realtor.sailor
- Based on the questions,I am going to provide you with what little information I am learning. With regards to the Renters Tax Credit, you can file this for yourself, but I believe he will have to participate in some way. If my memory serves me well, he has to sign the form for verification, I can not remember the exact website in which I retrieved this information, I just remember typing in Renters Tax Credit and researched enough to mention it to the people who does my taxes. They in turn are going to prepare the paperwork for me. If you have an ACORN in your area, I would check into whether or not they will do your taxes for free, Since you were presented with a lease and not a deed, this is the answer, Oppose to providing him with more money, I would seek websites for agents that specializes in these types of legal procedures. There are some that provides you with free information. I hope this has helped you.
- Did you have a verbal agreement or did you sign a document with the agreement terms? Usually a contract for deed sets out the term (payments & how long to pay on it) and identifies the purchaser and seller and property. You are making payments based on that agreement and when your payments are totally made, THEN the seller should DEED the property over to you. The agreement should state that and that the seller has the responsibility to give you a Deed upon completion of the payments. However, since the contract for deed is all you have, it would protect you to have this filed of record in the county where the property is. Perhaps you should consult an attorney to draw one up (if you don't have one already). Some office supply stores have pre-printed ones too, and you can fill in the blanks with your terms. Be sure to file it of record to protect your investment in the property. Your last statement regarding the cost seems a bit much. Are you paying HIS attorney?
