Minneapolis Real Estate Attorney Explains What You Need to Know about Selling Your Property on a Contract for Deed

The weather’s cooling off and the kids are back at school. It’s only a matter of time before many Minnesotans don their blaze orange gear and head north to their family’s hunting land. Hunting land and other recreational property can bring families years of enjoyment. But what happens when it comes time to sell? We have some things your need to know from your Minneapolis Real Estate attorney.


Financing can be difficult

Financing the purchase of rural and recreational land can be difficult due to increased underwriting standards for mortgages.  These difficulties include escalating land costs, higher down payment requirements and high interest rates. Often, buyers cannot secure financing to make the purchase a reality. Other times, family and friends want to keep the land in the family and help younger generations avoid costly mortgage and loan fees.

Consider a contract for deed transaction


In a contract for deed transaction, the seller finances the sale directly. Instead of applying to a bank for a mortgage loan, the buyer pays the seller monthly installments until the purchase price is paid off. Typically, the buyer immediately takes possession of the property, but the seller keeps the title of the property until the purchase payments are complete.

Contracts for deed are often used to sell land and other property to family and friends. Grandparents can set up a contract for deed with grandkids who are 18 years old or older. The grandkids can pay monthly installments to grandma and grandpa until the property is paid off, at which point the title would change hands. The same can be true for passing property to children or to close friends.

How a Contract for Deed Works

Contract for deed transactions are often faster, easier, and more affordable than transactions that involve a third-party lender. They don’t require a formal application, fees, closing costs, or credit checks. Instead, with the help of a real estate attorney, the seller and buyer draft a contract. The contract identifies the purchase price, monthly payment amounts, and the terms for when the property title will transfer. It should also outline who is responsible for maintenance of the property and who is responsible for paying property tax.

Most importantly for sellers, the contract should also stipulate what happens if the buyer defaults on their payments. Most contracts include a timeframe for how long the buyer has to make good on their payments before the contract is canceled. In the event that a contract is canceled, the contract should explicitly state that the seller retains the title to their property as well as any payments made toward the property up until the cancelation of the contract.


No two contracts for deed are alike, so it is crucial that you seek the advice and expertise of a real estate attorney if you plan to sell your property through a contract for deed. A lawyer can help make sure your property and your financial security are protected. To start drafting a contract for deed for your hunting land or other property, contact real estate attorney Jon Morphew at Morphew Law today.