(952) 417-0000 Contact Us

SlowFlip

Alternative Homeownership Program

(952)417-0000 Contact Us

contract for deed

How is Rent-to-Own Different from Contract for Deed?

Is a contract for deed the same as rent-to-own? How is rent-to-own different from contract for deed? What are the pros and cons of each? Which option is better for me and my situation?

These are a few of the questions we hear from both homebuyers and Realtors. We understand the confusion, which is why we’re sharing more about our program and how it differs from rent-to-own programs.

How is Rent-to-Own Different from CD Programs?

Defining Contract for Deed and Rent-to-Own

A contract for deed creates a contract in which the seller of a home (in this case, Slow Flip) provides a buyer with a specified period of time to pay off the contracted home price. This can be done by obtaining a mortgage, paying the contract amount in full, or selling the property.

To learn more about the Slow Flip contract for deed, click here.

In rent-to-own, the prospective buyer rents the home from the owner. The buyer has the option to buy the home at some point in the future. The owner remains on the deed and makes the mortgage payments.

How Are the Programs Different?

rent-to-own different
photo credit: @ibidsy accessed 2/5/22 via CC0

The most significant difference between CD and rent-to-own is the time at which the home changes ownership. In a contract for deed, the buyer buys the home from the seller and begins making payments under the contract. To compare, in rent-to-own, the seller owns the home outright until the renter buys it – which may or may not happen.

What Are the Risks of Rent-to-Own?

The primary downfall of rent-to-own programs is that they include no guarantee. Deals often fall through, and the potential buyer may not ever end up buying the home, even if they make rent payments for years. And fees are often higher than standard rents.

There are risks in every real estate transaction, and a CD may not be right for your situation either. Contact us to talk about your options!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

This is an updated blog post that was originally published in 2020.

How to Qualify for a Contract for Deed

If you’ve even considered a new home in the past two years, you know how tough the Minneapolis-St. Paul real estate market has been. Inventory is low, prices are up, and lenders are tightening mortgage restrictions even further amidst pandemic and economic uncertainty. If you’ve been unable to get into a home, consider a contract for deed (CD). It may be easier to qualify for CD, among other benefits.

Income Sources to Qualify for a Contract for Deed

Below are the income sources we use to determine whether a potential homebuyer qualifies for a Slow Flip contract for deed. Is your income source not on the list? Contact us to discuss your options!

qualify
photo credit: @tirachard-kumtanom-112571 accessed 2/3/22 via CC0
  • Self-employment: Mortgage guidelines require two years of self-employment income. Slow Flip requires some proof of income – usually one year – but doesn’t require an extensive history.
  • Ongoing part-time income: Mortgage lenders require two years, but we don’t need that much time.
  • Upcoming income: If you’re starting a new job in the near future, or graduating from college with a path toward an income and a career, that is taken into consideration for a CD.
  • Household income: Often, spouses aren’t on the mortgage for credit reasons, which means that their income isn’t considered for mortgage qualification purposes. We can take the spouse’s income into consideration, knowing that the credit will likely improve over time. This will the spouse to be on the loan when it converts to a mortgage within 5 years.
  • Bank deposit statements: We will look at both business and personal deposits from bank statements over the last six, 12 or 24 months.

If mortgage restrictions have made it difficult to get into a new home, a contract for deed may be a good option! Contact Chad to learn if you qualify.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

This is an updated blog post that was originally published in 2020.

3 Common Mortgage Myths

Things change quickly these days – including the real estate market. This fast pace can make it difficult for even seasoned realtors to keep up. To help you deliver the most up-to-date information to your clients, we’re taking a look at three common mortgage myths.

Common Mortgage Myths That Realtors Should Know

mortgage myths
photo credit: @geralt-9301 accessed 12/29/21 via CC0

Myth #1: It’s easy to get a mortgage

Currently, the real estate market is experiencing two compounding factors. First, low interest rates have increased the number of people trying to buy homes or refinance their existing mortgages. That has caused mortgage lenders to tighten restrictions even further. Even if a buyer can get a loan, the process may take longer.

Second, the economy continues to be incredibly uncertain, and lenders are being more cautious. As a result, fewer prospective borrowers are being approved for mortgages. (If your client is in this situation, consider the Slow Flip contract for deed!)

Myth #2: All buyers qualify for low interest rates

With record-low interest rates, buyers are chomping at the bit to secure a mortgage. However, only borrowers with good credit scores (generally, 620 or higher) will qualify for those low rates. Other factors include the down payment size, the type of loan, type of home, and more.

Myth #3: Buyers can apply for a mortgage after finding a home

Now more than ever, prospective buyers should know their mortgage options before they begin looking for a home. Whether that’s a mortgage, contract for deed, or other financing solution, being prepared will help homebuyers make more competitive offers.

Understanding mortgage myths and facts will better prepare you to represent your client’s best needs. If your buyer is having trouble securing a mortgage, a Slow Flip contract for deed might be a good solution. Contact us to learn more about our Minneapolis contract for deed process.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

A Homebuying Guide for the Freelance Worker

In recent years, an increasing number of American workers have made the switch from full-time employment to a contract or freelance worker. The pandemic accelerated this trend, as workers sought more flexible positions that would allow them to care for children or work from home.

Freelancing has many benefits. However, in a financial system that is still very much built on traditional employment, it can make certain things more difficult – like qualifying for a mortgage. Unfortunately, the pandemic has accelerated this trend as well. If you’re a freelance worker, you will likely have to provide even more proof of income before being considered for a mortgage.

freelance worker
photo credit: @vlada-karpovich accessed 12/14/21 via CC0

Buying a Home as a Freelance Worker

The regulations imposed after the 2009 housing market crash, while important and necessary, have made it more difficult for people who are self-employed. Often, self-employed workers shore up their income through tax deductions. This amounts to a higher net income. But it’s not as easy to provide proof of that income, and it appears less stable to a mortgage company.

Before lending to a freelance worker or contractor, banks usually require two years of tax returns and some proof that they’re still “in business”. You may also have to provide a profit and loss statement.

Read: The Slow Flip CD Gives Homebuyers More Options

This is all doable if you’ve been in a stable freelance or contract job for at least two years. But that’s not always possible, especially if you’re new to the gig economy – as so many people are right now.

Further, the pandemic has caused a great deal of economic upheaval. Banks are now being extra careful when approving mortgages. Freelance workers will need to provide even more documentation. This takes time. In a competitive market, it can cause a prospective buyer to lose out on a home they love.

More Options with a Contract for Deed

If you’re having trouble qualifying for a mortgage as a self-employed, contract or freelance worker, consider a contract for deed (CD). Slow Flip offers financially stable homebuyers the opportunity to purchase a home on a contract for deed until they qualify for a mortgage. You’ll just need a down payment, a reasonable debt-to-income ratio (considering all income sources). You must also have a plan to pay off the CD within five years.

Could a contract for deed be the tool you need to get into a house today? Give us a call to discuss your situation.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

The Slow Flip Contract for Deed Process

If you’ve only ever purchased a home using a traditional mortgage, the contract for deed process may seem confusing or intimidating. But we’ll let you in on a secret: it’s essentially the same process you’d follow if you were buying with a mortgage!

Our Contract for Deed Process

contract for deed process
photo credit: @sora-shimazaki accessed 11/4/21 via CC0
  1. Get pre-qualified: Prospective CD homebuyers must meet a few basic criteria regarding down payment, debt-to-income ratio, and more. Learn more here.
  2. Get pre-approved: Gather and submit all necessary documentation regarding assets, down payment, income, employment and more. Once documents are uploaded, your review can be completed within 24 hours.
  3. Find a house: With the help of your Realtor, find a home that fits your budget and meets your needs.
  4. Make the down payment: When the home is under contract, you will make a down payment to the title company.
  5. Inspections: Slow Flip does not require home inspections unless there are known issues with the home. If a buyer wants an inspection performed, it is their responsibility to coordinate it.
  6. Appraisal, title, and insurance: Slow Flip usually has an appraisal performed, but the buyer is not required to seek an appraisal. We will work to acquire the title through our title company, but the buyer must choose their own insurance provider.
  7. Closing: You will make any necessary payments, including the realty administrative fee, property taxes and interest through the end of the month, applicable association dues, and others as needed.
  8. Move into YOUR home! Begin to work toward adjusting your credit and finances to meet mortgage qualification requirements.
  9. Convert the CD into a mortgage: Within five years, pay off the contract for deed. This is usually done by converting it into a mortgage.

We’re Here to Help

If you have questions about any part of the Slow Flip contract for deed process, give us a call at (952) 417-0000 or contact your Realtor.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us today.

The Slow Flip CD Gives Homebuyers More Options

When you read through home listings, you may see sellers indicate that they’re open to a contract for deed. However, that doesn’t mean those are the only available options for buying with a CD. The Slow Flip contract for deed allows prospective homebuyers to buy any home on the market.

How the Slow Flip Contract for Deed Provides More Options

In a traditional mortgage, credit is one of the main considerations in determining eligibility. That isn’t the case with the Slow Flip contract for deed. We take a more holistic view of a potential buyer’s financial situation, looking at income, down payment, and contributing circumstances. You can see all of our CD criteria here.

In addition to providing a homebuying option where one may not have existed before, the contract for deed gives more options throughout the buying process. Our CD allows you or your clients to buy any home in the metro area on a contract for deed, not just the homes where the seller is willing to consider a contract for deed. This can significantly open home availability and allow homebuyers to find the homes that will work best for their family and future.

Contact Us to Get Started!

If you or your client has any questions about the Slow Flip contract for deed, or wants to explore the process, get in touch!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

How to Improve Your Credit Score to Convert a CD to a Mortgage

What is one of the most common reasons that homebuyers seek a contract for deed instead of a mortgage? Credit. Whether due to debt, divorce, foreclosure, bankruptcy, or any other reason, a low credit score can make it difficult, if not impossible, to qualify for a mortgage.

credit score
photo credit: @towfiqu999999 accessed 9/30/21 via CC0

This is where the Slow Flip contract for deed comes in. It allows you the time you need to raise your credit score, without forcing you to sacrifice the stability of homeownership. But, in the Slow Flip program, you must convert a CD to a mortgage within five years. 

How to Improve a Credit Score to Get a Mortgage

Correct Credit Report Errors

According to realtor.com, identifying and correcting errors on your credit report is a relatively fast and easy way to raise your credit score. Get a copy of your credit report and look it over. If you find any errors, you must provide documentation of the mistake to the credit bureau. Typically, bureaus have 30 days to investigate errors.

Settle Delinquent Accounts

If you have accounts that are past due or in collections, bringing them current will boost your credit score fairly quickly. However, your late payment history will remain on your credit report for seven years.

Reduce Your Credit Utilization

Credit utilization is the amount you owe versus your available credit. For example, if you have a $10,000 credit limit, and you owe $8,000, you’re utilizing 80% of your available credit. Pay down balances to improve your credit score. Applying for a new credit card will improve your utilization, but remember that credit applications show up on your credit report, and may lower your score in the short term.

Do you have questions about the Slow Flip contract for deed or our process? Get in touch – we’re here to help!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

How Realtors Can Help Homebuyers Make Tough Decisions

Real estate agents do more than just show homes and write contracts. Realtors get to know homebuyers and their families, guide them through a complicated process that is both stressful and emotional, and help them make tough decisions throughout. The expertise and experience of real estate agents is vital to a buyer’s success.

tough decisions
photo credit: @rodnae-prod accessed 9/23/21 via CC0

So how can agents help homebuyers make those tough decisions, when emotions are running high and so much is at stake? We’re sharing a few tips from McKissock.

How to Help Homebuyers Make Tough Decisions

  1. Keep them informed: Involve buyers in all parts of the homebuying process, not just touring homes and closing. Keep them updated throughout, and be available to answer questions.
  2. Help maintain perspective: It’s easy for buyers to get caught up in the cosmetic details of a home that aren’t really relevant to their goals and needs. Remind them of their “must-haves” if they start to get off track.
  3. Be honest: Honesty can ward off confusion and disappointment later in the buying process. Be upfront throughout the process.
  4. Be patient: Homebuyers won’t have the same level of understanding about the buying process, even if they’ve been through it before. Answer their questions patiently and kindly, and they’re more likely to remain calm and level-headed.

If you have clients who are unable to qualify for a mortgage, consider the Slow Flip contract for deed. Contact us to learn more!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

What is a Land Contract?

Whether you’re a longtime veteran of real estate or buying your first home, understanding the many available homebuying options is daunting. Today we’ll talk about another of those options: the land contract. (Spoiler alert: a land contract and a contract for deed (CD) are basically the same!)

Learn more about rent-to-own programs

Learn more about the deed of trust

What Is a Land Contract?

Despite the name, a land contract is not simply an agreement to purchase vacant land.

Essentially, a land contract is another term for contract for deed. According to Forbes, it is an agreement to purchase a property. In a land contract, a property owner finances the buyer’s purchase of the property. Then, the buyer makes payments to the owner over a set period of time. At the end of that period, the buyer pays off the remainder of the contracted amount, and they become the owner of the property.

Sound familiar? This is because the terms “land contract” and “contract for deed” essentially mean the same thing, and are often used interchangeably. Other terms that are commonly used in place of land contract or CD are: land installment contract, land contract of sale, land sale contract, installment sales contract, agreement for purchase and sale, agreement to convey, and executory contract.

All of these programs have the same fundamental structure, and only differ based on applicable state regulations. If you’re interested in a contract for deed in Minnesota, our team of experienced real estate professionals are here to help!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

Why You Might Not be Approved for a Mortgage

After the 2009 housing market crash, the federal government enacted new mortgage lending regulations. The new rules aimed to prevent the types of fraud and deceitful practices that led to the crash and its devastating effects. However, there was an unfortunate side effect of the new regulations: many potential homebuyers found themselves unable to get approved for a mortgage.

approved
photo credit: @micheile accessed 7/22/21 via CC0

The regulations prevented buyers from being approved for a wide variety of reasons. Most commonly, those reasons involve credit or income reporting. But there are many types of potential homebuyers who’ve been shut out of the mortgage lending process.

The good news? Slow Flip helps buyers get into their dream homes now, without waiting to qualify for a mortgage. Learn more about the Slow Flip contract for deed (CD), and our requirements and process, here.

Common Reasons Buyers Aren’t Approved for a Mortgage

  • They’ve been self-employed for less than two years
  • They earn a significant percentage of their income on commission or bonuses
  • There have been income changes in recent months (or even years)
  • There are recent credit issues related to divorce or medical debt
  • There are severe credit events, such as bankruptcy, foreclosure or short sale
  • A low credit score for any reason
  • They want a contract under a business entity rather than a personal identification
  • They don’t have a Social Security number
  • They need Sharia-compliant ownership

This isn’t an exhaustive list – there are many reasons that potential homebuyers use the Slow Flip CD to buy homes. Just read these testimonials from our many satisfied clients! Then give us a call to get started.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

What to Do Before Signing a Contract for Deed

As with any major financial agreement, it’s important to enter into a contract for deed (CD) fully aware of the terms, as well as your options and rights. We’ve made our process as simple and clear as possible. However, we ask that all clients work with their real estate agent (or attorney) to confirm that our CD program is a good fit for their situation. In addition, there are a few steps we recommend before signing a contract for deed.

Four Steps to Take Before Signing a CD

steps before signing a CD
photo credit: @jaye_haych accessed 6/29/21 via CC0

Gather Your Team

Before starting the CD process, it’s a good idea to enlist the trusted professionals that will help guide you through the program. These generally include a realtor, property inspector, loan officer, and more as needed.

Apply for a Mortgage

At Slow Flip, we recommended discussing mortgage options first with a licensed mortgage originator. If you will likely qualify for a conventional mortgage within a few months, it’s best to go that route. Regardless, an originator can help you determine timing and next steps to qualify for a mortgage. (As a reminder, we focus on buyers who have a good plan to satisfy the CD within 5 years. This is usually achieved by refinancing into a mortgage.)

Get an Inspection

This is an important step to ensure that the property is valued accurately, and that there are no major issues requiring repair. You should also check with the local housing inspection office to see if there are any reported code violations.

Understand the Contract

We work to make our contract for deed terms and process clear and understandable. But you should go over the contract in detail with your team to ensure that you understand every aspect of it.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

CD Benefits for Homebuyers

Homeownership is one of the best tools to achieve your financial goals. However, if you find yourself unable to qualify for a mortgage due to credit, income, or other issues, your progress can take a hit. At Slow Flip, we work to make the contract for deed process as simple and transparent as possible, in order to help homebuyers reach their goals. There are many CD benefits that can get you closer.

CD benefits
photo credit: @mart-production accessed 5/13/21 via CC0

CD Benefits for Buyers

  1. No Mortgage Required: One of the most impactful benefits of a contract for deed is that it allows buyers who don’t qualify for a mortgage to buy a home. Then, buyers have time (up to five years in the Slow Flip contract for deed) to adjust their finances in order to get a mortgage.
  2. No Mortgage Insurance: Unless you qualify for a conventional mortgage and buy with a 20% down payment, mortgage insurance will most likely be included in your monthly payment. With a contract for deed, there is a premium added to your contract balance, but your monthly payment has no mortgage insurance. The funds paid for your contract balance are either principal or interest.
  3. Tax Deductible Interest: A contract for deed has the same tax-deductible interest consideration as buying a home and using a mortgage to finance.
  4. Decreasing Balance: Much like buying a home with a mortgage, your contract for deed balance will reduce with each payment, since part of that payment includes principal. This is different than a lease option or rent-to-own agreement, which often have upward price adjustments year after year or even month to month.

Want to learn more about the contract for deed process? Check out these blog posts:

Contract for Deed vs. Rent-to-Own

How Does Minnesota Regulate Contracts for Deed?

Why You Don’t Need Mortgage Insurance with a Contract for Deed

How to Find a Home to Buy with a Contract for Deed

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

Three Professionals to Involve in the CD Process

The Slow Flip contract for deed process is designed to be clear, simple and fair. We do our best to inform and educate homebuyers about our program. However, it’s a good idea to involve other independent professionals in the CD process – to make it easier, and to ensure that you’re making the right financial decisions for your family.

real estate professionals
photo credit: @amyhirschi accessed 5/13/21 via CC0

Here are three professionals that you may want to enlist when entering into a contract for deed.

Independent Professionals to Include in the Contract for Deed

Realtor or Attorney

At Slow Flip, we require all of our homebuyer clients to be represented by their own independent Realtor or attorney. And because Realtors play an important role in our contract for deed process, we have a clear and fair compensation structure.

Attorneys will have more detailed knowledge of contracts. But they lack the housing market knowledge and the ability to show you homes.

Property Inspector

A professional inspector will identify any issues or needed repairs, and the costs that may be associated with them. Most Realtors have inspectors they recommend.

Loan Officer or Housing Counselor

A loan officer or housing counselor can assess your financial situation and help you make a plan to secure a mortgage in future months or years.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

4 Tips for Buying a Home in a Seller’s Market

Despite the pandemic, the Twin Cities has been a seller’s market for much of the past year. Sellers are receiving several offers, often within hours of listing and for thousands of dollars over asking. As a result, inventory of homes for sale is tight, and prospective homebuyers are having a difficult time even finding homes to make offers on, let alone having those offers accepted.

So how can prospective buyers succeed in a seller’s market? By making their offers as attractive as possible.

How to Make a Stronger Offer and Succeed in a Seller’s Market

buying a home in a seller's market
photo credit: @ketut-subiyanto accessed 4/14/21 via CC0

Get Pre-Approved

With offers being made and accepted in a matter of hours, prospective homebuyers must be ready to make an offer as soon as a home comes on the market. Make sure all supplemental financial paperwork is complete and ready to go.

Don’t Get Bogged Down by a Contingency

In a multiple offer situation, price isn’t the only thing that factors into a seller’s decision. They’re also likely to favor offers that carry a lower risk of snags or complications. If your offer has a contingency, such as requiring the sale of your own home, it could make your offer less attractive.

Carrying a contingency? Slow Flip can help! By buying a home with our contract for deed, we help you make a non-contingent offer, increasing the chances that your offer will succeed.

Make the Strongest Offer Possible

When homes are being sold for thousands over asking, it can be difficult to make an offer that is strong enough, especially if your budget is tight. This is another situation in which the Slow Flip program can help. We can make a stronger offer, get you in the home, and then allow you more time to make payments and gather the funds necessary to secure a mortgage.

Write an Offer Letter

Never disregard the power of a personal connection. Write a short letter to the seller, with an overview of your family and your interest in the home. In a sea of similar offers, it could be the detail that makes yours stand out the most.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

Do Mortgage Interest Tax Deductions Apply on CDs?

If you’re unable to get a mortgage based on income, credit, or a similar reason, a Slow Flip contract for deed could help your family get into a home now. But because a contract deed is different than a mortgage, we often get questions about certain aspects of the process, and the implications on homebuyer finances. For example, many Realtors and homebuyers want to know: do mortgage interest tax deductions apply on contracts for deed?

tax deductions in a contract for deed
photo credit: @n-voitkevich accessed 4/14/21 via CC0

Mortgage Interest Tax Deductions in a Contract for Deed

In a contract for deed, the title of the home remains with the CD seller – in this case, Slow Flip – until the CD is converted to a mortgage or paid in full. However, according to zacks.com, the IRS does allow CD homebuyers to deduct the interest portion of CD payments from income taxes. In addition, any real estate taxes may also be deducted.

Tax Considerations for CD Homebuyers

A few things to note about mortgage interest tax deductions in a contract for deed:

  1. As with any tax deductions, filers can only deduct mortgage interest taxes if they itemize their tax return.
  2. Homebuyers should keep careful records of the interest paid, and include those records in tax filings. Consider keeping an amortization table for your CD loan (you can find a free calculator online). Use the table to compute how much of your payments are going to the principal, and how much to the interest.
  3. When you enter mortgage interest deductions, write the name and address of the CD seller as the institution to which you paid interest.

Do you have questions about the tax implications of a contract for deed? Give us a call!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

How is a Deed of Trust Different than a Contract for Deed?

There are many programs that are similar to (and often confused with) the contract for deed). These include lease-to-own and rent-to-own, land contract, land installment contract, bond for deed, and deed of trust, among others. Continue reading to learn more about the deed of trust.

deed of trust
photo credit: @kellysikkema accessed 3/2/21 via CC0

What is a Deed of Trust?

When a home is purchased using a deed of trust, the lender appoints a third party as the trustee, according to PocketSense. The trustee will hold the title to the home until the homebuyer has paid off the full home loan.

In many ways, a deed of trust is like a mortgage. The trustee has no rights to the house or control over it. The main difference is in how a default and foreclosure is handled. If the homebuyer defaults on the loan, the only thing the lender needs to do before foreclosing on the home is to provide proof of default to the trustee. Unlike a standard foreclosure, a judge doesn’t need to give approval.

The Pros and Cons of a Deed of Trust

The obvious downside of a deed of trust is that foreclosure can happen quickly and easily. This leaves homebuyers without much power and even fewer options. A nonjudicial foreclosure can be challenged in court by filing a lawsuit, but this is expensive and takes a long time.

Deed of Trust vs. Contract for Deed

The similarity between these two options is that a third party – in our case, Slow Flip – holds the title until the purchase price is paid in full. In our contract for deed, we require full payment to be made within five years. Most of our homebuyers effectively make that full payment by transitioning the contract for deed into a mortgage.

Do you have questions about our contract for deed program and whether it’s right for you? Get in touch today.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

How to Find a Home to Buy with a Contract for Deed

The contract for deed process is different from the standard mortgage procedure in many ways. For example, there is no mortgage insurance requirement, and the closing cost structure and schedule is different. But when it comes to the task of actually looking for a home to buy, the process is very similar, whether you buy with a mortgage or a contract for deed. So when someone asks us how to find a home to buy with a CD, we say: the same way you’d find a home to buy with a mortgage!

Find a Realtor

At Slow Flip, we require all homebuyers to be represented by a real estate agent or attorney. This both ensures that your interests are protected, and makes the process go more smoothly for all parties. If you need help finding a Realtor, give us a call. We can connect you with a trusted Realtor partner. (Read about how and why we work with Realtors here.)

Start Searching

find a home
photo credit: @divinetechygirl accessed 3/2/21 via CC0

The next step: find a home! Open your favorite search engine and type “contract for deed homes near me,” “contract for deed homes in Minnesota,” “contract for deed homes for sale,” or something similar. Or, visit a real estate website and search there. Depending on the sellers, price or other variables, some of those homes may be available for purchase using a contract for deed. You may have better luck with homes that are for sale by owner, as those sellers are usually more motivated to sell quickly and with fewer fees.

Put Your Realtor to Work

If you find a home you’re interested in, ask your Realtor to check on the status, and whether the seller would be open to a contract for deed purchase. If you get the green light, contact Slow Flip, and we’ll take it from there!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

4 Advantages of a Contract for Deed

For homebuyers who need are having trouble qualifying for a mortgage, due to divorce, medical debt, income structure, or a similar reason, a contract for deed may be the answer. In the Slow Flip contract for deed, or CD, potential homebuyers are given the time they need to qualify for a mortgage – but don’t have to wait until that happens to purchase their dream home. That is just one of the advantages of a contract for deed. Continue reading to learn about a few others.

More Homes Become Available

We’ve talked about the issues that can arise when homeowners don’t qualify for a mortgage. But what happens when financing the house itself becomes difficult? This often happens when a property has title issues, doesn’t pass an inspection, or when the appraisal value is low. A CD can look past that, allowing homeowners to purchase the home they want.

Sales Move More Quickly

When it’s not necessary to wait for the lengthy mortgage process, a sale can move more quickly. This helps homebuyers who are up against a deadline – the start of a new job or a new school year, for example. It can also make the moving process simpler.

advantages of a contract for deed
photo credit: @designecologist accessed 2/16/20 via CC0

Minimizes Closing Costs and Related Fees

In a traditional sale, there are thousands of dollars in fees. These include inspections, appraisals, title searches, surveys, and all the fees included in the mortgage process. In the Slow Flip contract for deed, we bundle all of those standard closing costs into our acquisition price of the property. This lowers the homebuyer’s cost at closing, while also simplifying the process significantly.

Terms Can Be More Flexible

Because contract for deed buyers aren’t beholden to mortgage rules and regulations, there’s often more flexibility in contract terms, such as the life of the contract and the payment structure.

Are you interested in learning whether the Slow Flip contract for deed could benefit your family or your clients? Send us a message and we’ll be in touch soon.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible. The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about Slow Flip or the advantages of a contract for deed? Contact us at 952-417-0000 today.

How to Buy a Home Before You Sell

There are many good reasons to buy a new home before you sell your existing house. Not only will it make your offer more attractive, but it will make the moving process easier. And it could result in higher offers when you put your house on the market.

However, without income from the sale of an existing home, it’s often difficult to find enough money for a down payment, and you may not qualify for a mortgage on the new home. But that doesn’t mean it’s impossible. Here are a few ways to buy a home before you sell.

buy a home before you sell
photo credit: @cottonbro accessed 02/15/21 via CC0

Take out a home equity line of credit

This is an essentially a second mortgage on your current home. The cash received from the loan can be used for any purpose.

Put down a smaller down payment

While most people put down 20%, it isn’t always required. There may be situations in which 15% or even 10% is permitted, with varying terms and conditions.

Borrow from your 401(k)

Not all plans allow this, so the first step here is to talk to your HR department or plan administrator. This is probably not a good option if you can’t quickly repay your 401(k).

Use a gift from a family member

Many mortgage lenders will allow you to use a gift from a family member for a set portion of the down payment. However, this must be a true gift, not a loan. Also, consider that you may be subject to IRS gift tax regulations.

Contract for deed

Because a contract for deed is not subject to mortgage regulations, there is no consideration of a debt-to-income ratio or similar requirements. As long as buyers can raise the required down payment, a contract for deed is an excellent way to buy before you sell, allowing you to buy a new home, move, and then focus on selling. Once the old house sells, simply convert the CD to a mortgage.

If you think a contract for deed could help making your buying, selling and moving process easier, contact your realtor or give us a call.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

Why You Don’t Need Mortgage Insurance with a Contract for Deed

Anyone who has taken out a mortgage knows about the long and complicated closing process. Even those who are experienced in real estate can get confused by the many different documents, payments and fees. As a result, we’re commonly asked whether certain mortgage requirements – such as mortgage insurance – are also included in our contract for deed.

mortgage insurance
photo credit: @karolina-grabowska accessed 1/16/21via CC0

What Is Mortgage Insurance?

Mortgage insurance is an insurance policy, taken out and paid by homebuyers, that compensates mortgage lenders in the event of a default on the loan. Mortgage insurance can be offered by both private companies and public entities.

In the U.S., private mortgage insurance, or PMI, is commonly required when the down payment is less than 20 percent of the property value. Most homebuyers roll insurance payments into their monthly mortgage payments.

Why Don’t I Need Mortgage Insurance with a Contract for Deed?

Put simply: a contract for deed is not a mortgage. Therefore, there is no requirement to pay mortgage insurance. However, we do include a premium in the overall contract for deed amount. This can range between 3.9 percent to 11.5 percent. That’s how the program remains profitable and available to other homebuyers and families.

If you have questions about the contract for deed premium or our process, get in touch or contact your real estate agent.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage. Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

How Does Minnesota Regulate Contracts for Deed?

The rules and regulations for contracts for deed vary from state to state. If you or your clients are considering financing a home through a contract for deed, it’s important to understand the applicable regulations. Today, we’ll discuss how the state of Minnesota regulates contract for deed transactions, and what you need to know.

What is a Contract for Deed?

A contract for deed is also known as seller financing or, in some states, a land contract. Instead of using a bank or other financial institution for a mortgage, the seller will structure the sale so that homebuyers make payments for a period of months or years. The contract for deed is satisfied by qualifying for a mortgage or selling the home and repaying in full.

How Does Minnesota Regulate A Contract for Deed?

In the state of Minnesota, the contract for deed must have a payment timeline of no more than five years in most cases, with a few exceptions. The regular payment amount cannot change during those five years (or until the contract is satisfied), unless there are changes to escrow or that are mandated by FEMA or a homeowners’ association.

Watch the below video for more information on contracts for deed in Minnesota.

If you or your clients have additional questions about specific Minnesota regulations, don’t hesitate to contact Chad at Slow Flip. We’re here to help!

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible. The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.

Six Red Flags to Watch For When House-Hunting

There’s a lot to think about when buying a new home. Most importantly, you must ensure that the house meets your needs and is within your budget, and that financing is available. But you also need to consider the home’s quality and integrity. If you’re house-hunting, here are a few red flags that can alert you of potential defects or issues with a home, courtesy of BHGRE.

house-hunting
photo credit: @pixabay accessed 12/10/20 via CC0

Inadequate Drainage

If you notice standing water near the home, especially after a rainfall or weather event, it is a sign of poor drainage. This can cause water to seep into basements and garages, create mold issues, and compromise the foundation.

Substandard Repairs

If you notice repairs that were clearly made by an amateur instead of a professional, that can indicate substandard work that may be dangerous or not up to code.

Poor Ventilation

A home must have proper ventilation, or moisture can’t evaporate out and will cause damage to walls and structural elements. Make sure the attic is ventilated to protect the roof, and that there are working bathroom and kitchen fans.

Missing or Loose Handrails

If internal or external handrails are broken or missing, it’s a sign that there are safety issues in the home.

Poor Appliance Maintenance

If a home’s appliances aren’t properly maintained, they’ll need repair or replacement sooner. Check filters, drains and hoses to make sure appliances have been well-maintained.

Rotting Wood

When wood is exposed to moisture, it rots over time, unless it’s been protected and the home is well-ventilated. If you notice any rotting wood while house-hunting, it’s a good sign that there are additional moisture issues in the home.

Ready to buy a home but having trouble securing a mortgage? Give Slow Flip a call.

The Slow Flip contract for deed program helps families in the Twin Cities metro area of Minneapolis, St. Paul and surrounding suburbs purchase a home using a contract for deed, or CD, when a mortgage is not possible.  The Slow Flip contract for deed can be an ideal tool to purchase a home when buyers need time to adjust their income, credit, debts or other financial components so they can eventually qualify for a mortgage.

Are you or your clients interested in learning more about the Slow Flip contract for deed? Contact us at 952-417-0000 today.