Posted by R. Porter(Ohio) on October 28, 1998 at 19:33:21:
A point of clarification. Ohio is a mortgage state, not a deed of trust state. The borrower signs a mortgage which becomes a lien on the property and is recorded at the county courthouse.
The instrument used here to purchase on a “Contract for Deed” is called a Land Installment Contract, commonly called a Land Contract.
A seller can sell a property and finance it for the buyer with either a mortgage or on a Land Contract. The main difference is how the title is held after the property is sold. If the seller owns the property “free and clear”, you can have the seller hold a mortgage against the property for the amount financed(the amount you owe the seller) and the deed to the property will transfer to you.
With a land contract, the deed stays in the name of the seller until the land contract is paid off. This is a somewhat risky way to purchase property since the title(deed) to the property stays with the seller.
If you live in a major meto area in Ohio, you may want to join a local REIA group. You will meet investors there who have purchased properties this way and can answer your questions. There are REIA’s in Cincinnati, Dayton, Columbus, Toledo, Akron/Canton, Ashtabula & Lima.