Contract for Deed (Land Contract) - New Mexico

A Contract for Deed, also referred to as a Land Contract, is used in New Mexico and other states to facilitate the sale of property. It is a financing agreement in which the seller retains the legal title to the property until the buyer completes all payment obligations. This allows the buyer to occupy and use the property while making installment payments to the seller. Once the buyer fulfills the payment requirements, the seller transfers the legal title to the buyer.

In New Mexico, the person selling the property usually files the contract for deed, also known as a land contract.

FAQ

Q: What is a Contract for Deed?A: A Contract for Deed, also known as a Land Contract, is a legal agreement between a buyer and seller for the purchase of property.

Q: How does a Contract for Deed work?A: In a Contract for Deed, the buyer agrees to make regular payments directly to the seller until the property is fully paid off, at which point the seller transfers the title to the buyer.

Q: Is a Contract for Deed a common practice in New Mexico?A: Yes, Contract for Deed is a commonly used method for buying and selling property in New Mexico.

Q: What are the advantages of using a Contract for Deed?A: Advantages include flexible financing options, no need for traditional bank financing, and the ability for buyers with lower credit scores to purchase property.

Q: Are there any risks involved in a Contract for Deed?A: Yes, there are risks involved for both the buyer and the seller. It is important to carefully review and understand the terms of the contract before entering into it.

Q: Can the buyer sell the property before it is fully paid off in a Contract for Deed?A: In most cases, the buyer is not allowed to sell the property until the contract is fully paid off or unless specified in the contract.