The Consumer Financial Protection Bureau (CFPB) is considering regulating these real estate sales due to a growing fear that sales of land contracts are contrary to the truth of the right to grant credit.  In 2015, Texas law was amended to automatically place the title on the property with the buyer by filing the contract on the county file where the property is located. While the seller loses the property, the seller retains the right of a seller to pledge in the building for the remaining balance of the contract.  Yet some financial advisors and real estate researchers consider the contract to be a “legal dinosaur”3/ or an “anomaly,” 4/ and even claim its loss. They argue that the contract has no place in modern real estate financing, that it does not offer any real advantages over the mortgage and that it makes both parties vulnerable to risk and uncertainty. The contract is merely a contract subject to various contractual restrictions under public law and many of the parties` rights and remedies are based exclusively on the provisions of the treaty itself. In short, it is not very different from any other temperamental purchase of a product, except that the title remains in the seller, unlike many installment purchases. The seller undertakes to pass the property on to the buyer through some form of transport, usually a letter of guarantee, as soon as all payments are made under the contract, and to provide the seller with an abstract and good title at the time of the contract. If the total purchase price and all interest earned have been paid to the seller, the buyer receives the mode of transport provided for in the contract. As a general rule, this requires the execution and delivery of a property authorization to the buyer. If the property is transferred by a security deed, the seller guarantees that he has the full legal personality of the property, subject to the exceptions expressly mentioned on the facts. On the other hand, a cease-and-desealing action transfers all rights to the seller`s property, but does not guarantee that the others do not have prior rights.
After payment of the purchase price, the seller must inform the buyer definitively. When the seller has died or is unable to carry out the transport by other means, it is the responsibility of his heirs or representatives to provide the proper transport at no additional cost to the buyer. If the buyer has received the seller`s deed, he should submit the deed to the district clerk in the county where the land is located. For the seller, the main drawback of a contract is that he does not receive all the funds until the end of the contract. With a traditional mortgage, they get the funds for the sale to the conclusion. There may also be other benefits to using a field contract. When a third-party lender, z.B a financial institution, grants a loan, that third party has its own interest to protect itself from the other two parties involved, the seller and the buyer. Determining the right property and the value of the property to be used as collateral is important for the lender.
For example, the lender generally requires a securities service, including title search and title insurance, by an independent securities company, an assessment and review of termites of the property to ensure that it has sufficient value, ground expertise to ensure that there is no intervention, and the use of lawyers to ensure that the financial statements are properly completed. These requirements of the third-party lender increase the establishment fees that the lender imposes on the seller and/or buyer.