Question

What are the disadvantages of a contract for deed? Select two. Allows time to become mortgage ready Seller retains the right to the property Down payment and closing costs can be negotiated No professional appraisal is required, so you might pay more than the home is worth

Answer 1

Answer:

Seller retains the right to the property

No professional appraisal is required, so you might pay more than the home is worth

Explanation:

A contract for deed is one that does not have the standard transfer of title from the seller to the owner. Rather the seller of a property retains title ownership while the buyer pays installmentally over time.

This agreement is common where the buyer does not meet requirements to obtain a loan. A small down payment can be made initially.

Disadvantages of contract for deed includes:

- Seller retains rights to the property, and he can cancel the contract if the buyer defaults even once on his payments.

- No professional appraisal is required, so you might pay more than the home is worth. There is no requirement for appraisal of the property so the buyer does not have a reliable estimate of property worth.