Pros and Cons for sellers on contract for deed

(My Original Blog Post: http://ping.fm/iBVPP)
What are the PRO's for a Seller on a Contract for Deed: The pro's for the seller when selling on a contract for deed, have mostly to do with peace of mind that the new buyer will take care of the property. That the buyer will put up a big down payment instead of just a rental deposit, further protecting the seller from damage and exit costs.  The seller will lose some tax write-offs, but may find them in other ways if he/she has a lot of equity.  The seller gets someone who will likely take care of the property, probably much more likely than a straight rental for a landlord.   The seller has a much higher chance of selling the house to that C/D buyer if the buyer put down a large down payment, and the seller has more of an incentive to help the buyer out with their time and commitment in improving credit scores and doing legwork to make it a win-win.

What are the CON's for a Seller on a Contract for Deed: The part about a contract for deed that's not as good for a seller is that it can take 60-90 days to get the buyer out of the property if they default.  They have to go through 60 days of defaulted payments, and then cancel the contract and go through the legal steps to force out the buyer who would have defaulted on the paperwork.  This 60-90 days is much longer than about the standard 3 weeks it takes to evict a renter.  The other bad part for a seller is if they get very little money down, it isn't enough to pay agents or for the potential damage or time it takes to get rid of the buyer.  Other disadvantages for the sellers of a contract for deed is they are giving up tax write-offs and depreciation to the new buyer, this may not be a good deal unless they are getting something from the buyer in return, like a future sale, or a large down payment, or cashflow from a high interest rate.  The seller is also giving up ownership to the new buyer, who can now take that house and make it there own.  One thing a seller will want to realize when selling on a contract for deed is they will want to pay special attention on how it will affect them with taxes, this will best be answered by their accountant.  For example when you sell for much higher, essentially a larger profit, you may have to pay taxes on the large profit, even though you haven't yet felt the gain. There are ways around this, so please check with your accountant. Also in addition a seller is not recommended to sell a house at an extremely low interest rate, in turn for an inflated purchase price, basically playing around with the numbers. The IRS may have something to say about that (The term is imputed interest). Please check out this page here, I am not sure if it's the correct page, either way bring this up to your accountant, if needed.  http://ping.fm/5I5Df This pages is about Applicable Federal Rates (or AFRs).