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Contract Of Sale

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larryhaskell

Senior Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Nevada
Can a property transferring on a Contract of Sale be used the same as when they transfer with a deed? Can't remember if this question has been asked B4.
 

Farm Gal

Elite Member
Joined
Jan 14, 2002
Professional Status
Licensed Appraiser
State
Nebraska
Larry:

Varies by state.

Check with your board also, as what is LAW versus what your board will accept may be two different things :huh: .
 

Ken in Arkansas

Junior Member
Joined
Jan 20, 2002
Professional Status
Certified General Appraiser
State
Arkansas
I have used them as a fourth or fifth comp as additional supporting data, but underwriters will balk if a contract of sale is one of the three primary comps. The primary reason is that title has not passsed from Seller to Buyer; it remains vested in the Seller until the terms of the contract are satisfied.

I would also suggest that because no underwriting guidelines are in place, contract sales many times attract those who otherwise cannot qualify for typical mortgage financing, thereby setting the stage for very low down payments or extending payment terms that ultimately may have upward pressure on the sale price.
 

Mike Garrett RAA

Elite Member
Gold Supporting Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
In my part of the country it's called....Contract for deed or Installment Land Contract and yes they can be used IF it was a recorded transaction. Do you want to use it? It depends. Might be the only comp you have.
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
These things often reflect issues not typical of the market, i.e., borrower can't get a loan through any other means, seller wants to have a guaranteed income stream without hassel of Deed of Trust, may sell and buy back property, etc. If there's anything else, I wouldn't use it.

Roger
 
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