Contract for Deed Template, Free Download 2026

This Contract for Deed (the "Contract") is entered into as of [____________] by and between [____________] ("Seller" or "Vendor") and [____________] ("Buyer" or "Vendee"). Seller agrees to sell and convey, and Buyer agrees to purchase, the real property located at [____________], County of [____________], State of [____________], together with all improvements, fixtures, and appurtenances thereto (the "Property"), as more particularly described by legal description in Exhibit A attached hereto and incorporated by reference.

Seller represents that Seller is the fee simple owner of the Property and that the Property is free and clear of all liens, encumbrances, and defects in title except as follows: [____________] (the "Permitted Exceptions"). Seller further represents that Seller has full power and authority to enter into this Contract and to convey the Property in accordance with its terms. The Property is identified by Tax Parcel Number [____________] and is currently zoned [____________] under the applicable zoning ordinance.

The total purchase price for the Property shall be [$__________] (the "Purchase Price"). Buyer shall pay the Purchase Price as follows: (a) a down payment of [$__________] (the "Down Payment"), payable upon execution of this Contract, receipt of which is hereby acknowledged by Seller; and (b) the balance of [$__________] (the "Unpaid Balance"), payable in installments as set forth in Article III. The Purchase Price does not include closing costs, recording fees, or transfer taxes, which shall be allocated as follows: (i) the cost of recording this Contract shall be borne by Buyer, as provided in Section 11.1; (ii) the transfer, documentary stamp, or conveyance taxes payable on delivery of the deed shall be borne by [Seller / Buyer / the Parties in equal shares]; (iii) the fee for recording the deed shall be borne by [Buyer / Seller]; (iv) the premium for any owner's title insurance policy and the cost of any title search, abstract, or survey shall be borne by [Buyer / Seller / the Party ordering it]; and (v) each Party shall bear its own attorneys' fees and the fees of any escrow or closing agent it engages, except as otherwise expressly agreed in writing.

The Unpaid Balance shall be paid in [number] consecutive monthly installments of [$__________] each, which includes principal and interest as calculated in Section 4.1, commencing on [____________] and continuing on the same day of each month thereafter until the Unpaid Balance and all accrued interest are paid in full and, if and only if the Parties elect a balloon structure under Section 9.1, until the Balloon Payment described in Article IX becomes due, whichever occurs first. All payments shall be made to Seller at [____________] or such other address as Seller may designate in writing, subject to Section 5.3(e)(ii).

Payments received by Seller shall be applied first to accrued and unpaid interest, then to any escrow amounts for taxes and insurance as set forth in Section 5.2, then to principal, and finally to any late charges, fees, or other amounts due under this Contract. A late payment charge of [____________] percent ([___]%) of the overdue installment, or [$__________], whichever is [greater/lesser], shall be assessed on any payment not received within [number] days of the due date. Buyer shall have the right to prepay the Unpaid Balance, in whole or in part, at any time without penalty, provided that partial prepayments shall be applied to the most remote installment(s) due under this Contract.

Interest shall accrue on the Unpaid Balance at the rate of [____________] percent ([___]%) per annum, calculated on the basis of a 360-day year consisting of twelve 30-day months. The interest rate is [fixed for the entire Contract term / adjustable as set forth in this Section]. Interest shall begin to accrue on the effective date of this Contract. An amortization schedule setting forth the allocation of each monthly payment between principal and interest is attached hereto as Exhibit B.

In no event shall the interest rate charged under this Contract exceed the maximum rate permitted by applicable state usury law. If any interest charged hereunder is found to exceed the maximum lawful rate, such excess shall be applied to the reduction of the Unpaid Balance and shall not be deemed a penalty or forfeiture. Seller and Buyer agree that the interest rate reflects fair market terms and is the result of arm's-length negotiation between the Parties.

Legal title to the Property shall remain in Seller's name until the Purchase Price has been paid in full, including all accrued interest and other amounts due under this Contract. Upon payment in full, Seller shall, within [number] days, execute and deliver to Buyer a general warranty deed conveying the Property to Buyer free and clear of all liens and encumbrances other than the Permitted Exceptions and any encumbrances caused by or through Buyer. Buyer shall receive equitable title to and possession of the Property upon execution of this Contract.

Seller shall not encumber the Property with any mortgage, lien, or other encumbrance during the term of this Contract without Buyer's prior written consent. Seller represents that the only mortgage, deed of trust, or similar security instrument encumbering the Property as of the date hereof is [none] OR [the following (the "Existing Mortgage"): holder [____________]; loan number [____________]; outstanding principal balance [$__________]; monthly payment [$__________]; maturity date [____________]]. Seller covenants that Seller shall pay each installment of the Existing Mortgage when due, shall not permit it to become delinquent, shall not take any further advance under it, and shall not permit the outstanding balance of the Existing Mortgage at any time to exceed the Unpaid Balance then owing by Buyer under this Contract. For the payment of real property taxes and insurance premiums, the Parties elect: [Seller shall maintain an escrow account funded by Buyer's monthly escrow payments of [$__________] in addition to the installment payments set forth in Section 3.1] OR [Buyer shall pay real property taxes and insurance directly as set forth in Sections 6.1 and 6.2].

PROTECTION OF BUYER AGAINST THE EXISTING MORTGAGE. (a) Seller shall, concurrently with execution of this Contract, deliver to Buyer a written authorization, in a form acceptable to the holder, permitting the holder of the Existing Mortgage to disclose loan status, payment history, and payoff information directly to Buyer, and Seller shall renew that authorization on request. (b) Seller shall deliver to Buyer, not less than annually and within ten (10) days after Buyer's written request, a current statement from the holder showing the outstanding balance and that payments are current. (c) Seller shall forward to Buyer, within three (3) business days after receipt, any notice of default, acceleration, or foreclosure, and any demand or communication asserting a breach of the Existing Mortgage. (d) It shall be a "Seller Event of Default" if Seller fails to pay the Existing Mortgage when due, fails to comply with clauses (a) through (c), permits any lien to attach to the Property other than a Permitted Exception, or fails to convey title as required by Section 5.1. (e) Upon a Seller Event of Default, Buyer may, in addition to any remedy at law or in equity: (i) cure the default, including by paying the holder of the Existing Mortgage directly, and offset all sums so paid, with interest at the Contract rate, against the installments next falling due under Section 3.1; (ii) by written notice require that all future installments be paid to a licensed third-party escrow or collection agent selected by Buyer and reasonably acceptable to Seller, who shall disburse first to the holder of the Existing Mortgage and the balance to Seller, the cost of such agent to be borne by Seller; (iii) suspend payments to Seller until the default is cured; (iv) compel Seller by specific performance to satisfy or cure the Existing Mortgage; or (v) rescind this Contract and recover all sums paid to Seller, together with the value of improvements made by Buyer. In any action to enforce this Section, the prevailing Party shall recover reasonable attorneys' fees and costs.

DUE-ON-SALE DISCLOSURE. Buyer and Seller each acknowledge that a contract for deed is a transfer of an interest in the Property and that, under the regulation implementing the Garn-St Germain Act, 12 C.F.R. 191.2(b) (formerly codified at 12 C.F.R. 591.2(b)), an installment land sales contract is treated as a "sale or transfer" for purposes of a due-on-sale clause. The Garn-St Germain Depository Institutions Act, 12 U.S.C. 1701j-3(d), exempts certain transfers of residential real property containing fewer than five dwelling units from due-on-sale enforcement, including, under 12 U.S.C. 1701j-3(d)(6), a transfer in which the spouse or a child of the borrower becomes an owner of the property. The Parties should confirm the availability of any exemption with counsel before executing this Contract, and they state: [No exemption under 12 U.S.C. 1701j-3(d) shelters this transaction] OR [This transaction is sheltered by the exemption at 12 U.S.C. 1701j-3(d)([___]), described as follows: ____________]. If no exemption applies and the Existing Mortgage contains a due-on-sale clause, the holder may be entitled to accelerate the entire balance of the Existing Mortgage upon this Contract, and recording under Section 11.1 may bring the transfer to the holder's attention. The Parties elect: [Seller has obtained the holder's written consent to this Contract, a copy of which is attached as Exhibit C] OR [Seller has not obtained the holder's consent, and Seller shall indemnify, defend, and hold Buyer harmless from all loss, cost, and expense, including loss of the Property and reasonable attorneys' fees, resulting from any acceleration or enforcement of the Existing Mortgage by reason of this Contract]. Nothing in this Section limits Buyer's remedies under Section 5.3.

Buyer shall, at Buyer's sole expense, maintain property insurance on the Property in an amount not less than the full replacement cost of all improvements, naming both Seller and Buyer as insureds with a loss payable clause in favor of Seller. Buyer shall also maintain liability insurance with limits of not less than [$__________] per occurrence. Buyer shall provide Seller with certificates of insurance and shall notify Seller at least thirty (30) days prior to any cancellation, non-renewal, or material change in coverage. If Buyer fails to maintain required insurance, Seller may obtain such insurance and add the cost to the Unpaid Balance.

Buyer shall pay all real property taxes, special assessments, and governmental charges levied against the Property as they become due and shall provide Seller with evidence of payment. If Buyer fails to pay any tax or assessment when due, Seller may pay such tax or assessment and add the amount, together with interest at the Contract rate, to the Unpaid Balance. Buyer shall be entitled to claim any available homestead exemption and all tax deductions for real property taxes and mortgage interest to the extent permitted by applicable federal and state tax law.

Buyer shall maintain the Property in good condition and repair at Buyer's sole expense, including all structural components, mechanical systems, appliances, landscaping, and all interior and exterior elements of the Property. Buyer shall not commit or permit any waste, damage, or destruction of the Property. Buyer shall comply with all applicable building codes, zoning ordinances, and governmental regulations. Buyer shall not make any structural alterations or improvements costing in excess of [$__________] without Seller's prior written consent, which shall not be unreasonably withheld.

Buyer shall not use the Property for any unlawful purpose or in any manner that would violate any applicable zoning ordinance, restrictive covenant, or governmental regulation. Seller shall have the right, upon reasonable prior notice, to inspect the Property [annually / semi-annually / quarterly] to verify that Buyer is maintaining the Property in accordance with this Contract. If Buyer fails to maintain the Property and does not cure such failure within [number] days of Seller's written notice, Seller may perform or cause to be performed any necessary maintenance or repairs and add the cost thereof to the Unpaid Balance.

The following shall constitute an "Event of Default" by Buyer: (a) failure to make any payment within [number] days of the due date; (b) failure to maintain insurance as required by Section 6.1; (c) failure to pay taxes or assessments as required by Section 6.2; (d) waste, damage, or destruction of the Property; (e) breach of any other material term of this Contract that remains uncured for [number] days after written notice from Seller; (f) Buyer's filing of a petition for bankruptcy or appointment of a receiver; or (g) any attempt to assign, transfer, or encumber Buyer's interest without Seller's prior written consent.

Upon the occurrence of an Event of Default, Seller shall provide Buyer with written notice specifying the default and the applicable cure period as required by applicable state law and this Contract. If the default is not cured within the applicable cure period, Seller may, at Seller's option: (a) declare a forfeiture and terminate this Contract, in which event Buyer shall forfeit all payments made as liquidated damages and shall vacate the Property within [number] days; (b) accelerate the entire Unpaid Balance and declare all amounts immediately due and payable; or (c) pursue any other remedy available under applicable state law, including foreclosure in the same manner as a real property mortgage. Seller's exercise of any remedy shall not waive any other remedy.

Notwithstanding the foregoing, Seller's right to declare a forfeiture shall be subject to all mandatory protections afforded to Buyer under applicable state contract for deed or installment land contract statutes, including without limitation any required notice period, right to cure, and right of redemption. If Buyer has paid a specified percentage of the Purchase Price as set forth in applicable state law, Seller may be required to pursue judicial foreclosure in lieu of forfeiture. Buyer shall have the right to cure any default up to and including the date of forfeiture or foreclosure sale, as applicable.

The Parties elect one of the following amortization structures, and only the elected structure shall apply: [OPTION A: FULLY AMORTIZING. The installment payments set forth in Article III shall fully amortize the Unpaid Balance and all accrued interest over the installment term, no balloon payment shall be due at any time, and Sections 9.2 and 9.3 shall not apply.] OR [OPTION B: BALLOON. The entire remaining Unpaid Balance of the Purchase Price, together with all accrued and unpaid interest and any other amounts due under this Contract (the "Balloon Payment"), shall be due and payable in full on [____________] (the "Maturity Date").] Before electing Option B, the Parties should read Article X, because a balloon payment can cause Seller to lose the federal seller-financing exclusion described in that Article.

This Section applies only if Option B is elected. Buyer acknowledges that the monthly installment payments set forth in Article III will not fully amortize the Purchase Price and that a substantial Balloon Payment will be due on the Maturity Date, that Buyer has no assurance of being able to refinance it, and that failure to pay it can result in loss of the Property and of all sums paid. Buyer is advised to make arrangements to refinance the Balloon Payment through conventional mortgage financing well in advance of the Maturity Date. If Buyer fails to pay the Balloon Payment on or before the Maturity Date, such failure shall constitute an Event of Default under Section 8.1, and Seller may exercise any of the remedies set forth in Section 8.2, subject to Section 8.3.

This Section applies only if Option B is elected. Provided that Buyer is not then in default beyond any applicable cure period, Buyer may extend the Maturity Date by [____________] (_____) months on written notice delivered to Seller not less than sixty (60) days before the Maturity Date, in which case interest shall continue to accrue at the rate stated in Section 4.1 and the installment payments shall continue unchanged during the extension.

Upon Buyer's payment in full of the Unpaid Balance and all other amounts due under this Contract, under either Option A or Option B, Seller shall deliver a general warranty deed to Buyer in accordance with Section 5.1 within [number] days of receipt of payment.

The Parties acknowledge that a contract for deed on a dwelling is consumer credit secured by a dwelling and that federal law regulates persons who extend such credit. Under Regulation Z, 12 C.F.R. 1026.36(a), a seller who finances the sale of a dwelling is a "loan originator" subject to licensing and qualification requirements unless a seller-financing exclusion applies. The exclusion at 12 C.F.R. 1026.36(a)(5), available to a natural person, estate, or trust that finances the sale of only one property it owns in any twelve-month period, does not require full amortization. The exclusion at 12 C.F.R. 1026.36(a)(4), available to a seller financing up to three properties in any twelve-month period, is conditioned on the financing being FULLY AMORTIZING (that is, containing no balloon payment) and on the seller having made a good-faith determination that Buyer has a reasonable ability to repay. Electing Option B in Section 9.1 therefore defeats the three-property exclusion.

Seller states that, including this transaction, Seller has extended seller financing secured by a dwelling for [____________] properties in the preceding twelve (12) months, and that Seller [IS / IS NOT] a natural person, estate, or trust. [Include the following representation only where it is true. Do not sign it otherwise: it is a statement of fact about what Seller actually did, and where Seller is not exempt from the ability-to-repay requirements it is also the record of compliance. Seller has determined in good faith, based on Buyer's current and reasonably expected income or assets, current obligations, employment status, and credit history, that Buyer has a reasonable ability to repay the amounts owed under this Contract, and Buyer has provided documentation of income and obligations for that purpose, which Seller has retained.] [NOTE TO PREPARER, DELETE BEFORE SIGNING: the number of seller-financed properties Seller has extended in the preceding twelve months, and Seller's status as a natural person, estate, or trust, determine whether Seller is exempt from the ability-to-repay rules that apply to a creditor under the Truth in Lending Act and Regulation Z. Those exemptions are narrow, and one of them does not permit a balloon payment. Confirm the current thresholds, and the balloon-payment restriction in Article IV, with counsel before this Contract is signed.]

BEFORE SIGNING, SELLER SHOULD CONFIRM WITH COUNSEL LICENSED IN THE STATE WHERE THE PROPERTY IS LOCATED whether, in light of Sections 10.1 and 10.2, Seller must be licensed as a mortgage loan originator under 12 C.F.R. 1026.36(f) and the SAFE Act, whether Seller is a "creditor" subject to the ability-to-repay rule at 12 C.F.R. 1026.43 and to Truth in Lending disclosures, and whether state seller-financing, licensing, or high-cost-loan statutes apply. Nothing in this Contract waives any right or remedy Buyer may have under the Truth in Lending Act, Regulation Z, or any applicable state statute, and any provision of this Contract that conflicts with such a right shall be deemed modified to the extent necessary to conform.

This Contract shall be governed by and construed in accordance with the laws of the state in which the Property is located, including without limitation all applicable statutes governing contracts for deed, installment land contracts, or similar instruments. This Contract shall be recorded in the official public records of the county in which the Property is located, at Buyer's expense, to provide constructive notice of Buyer's equitable interest in the Property. Any dispute arising under this Contract shall be resolved in the state or federal courts of the county in which the Property is located.

This Contract constitutes the entire agreement between the Parties concerning the sale and purchase of the Property and supersedes all prior negotiations, representations, and agreements. This Contract may not be amended except by written instrument signed by both Parties. If any provision is held invalid, the remaining provisions shall remain in full force and effect. All notices shall be in writing and deemed given when delivered personally, by overnight courier, or by certified mail, return receipt requested. This Contract shall be binding upon the Parties and their respective heirs, successors, and assigns. This Contract may be executed in counterparts.