Purchaser

A contract for deed is a different form of seller-finance. In a contract for deed, the seller keeps the title to the property and the buyer does not receive a deed to the property.In Texas, contracts for deed on residential property are considered potentially predatory and subject to strict consumer-protection laws.

In the first instance, if your deed is not recorded, there is nothing in the public record to stop the seller from conveying the property to another person.The second situation could happen if your seller fails to pay his or her debts and the seller's creditors file liens or judgments against your property.

If a seller defaults, he must return all deposits, plus added reasonable expenses, to the buyer. The other party may also seek to compel the erring party to complete the deal under specific performance. From a buyer's point of view, it is advisable to get the sale agreement registered.

This means that if you default and can?t make your payments, you lose the property and all of the money you have already paid into it (often including repairs and improvements). Unlike a traditional mortgage, a defaulting buyer in a contact for deed may only have 30-60 days to cure the default or move out.

The buyer should record the contract for deed with the county recorder where the land is located and does so normally within four months after the contract is signed, though the time may vary depending on state law.

Failure to record a deed effectively makes it impossible for the public to know about the transfer of a property. That means the legal owner of the property appears to be someone other than the buyer, a situation that can generate serious ramifications.

Contrary to normal expectations, the Deed DOES NOT have to be recorded to be effective or to show delivery, and because of that, the Deed DOES NOT have to be signed in front of a Notary Public. However, if you plan to record it, then it does have to be notarized as that is a County Recorder requirement.