Legal Question in Real Estate Law in Virginia

Re: Contract for Deed

Family concerns aside, your daughter would be nuts to do a "contract for deed" in Virginia under these circumstances. What I understand you to mean by "contract for deed" is that she will pay you X dollars a month and when she pays off the contract you will deed the property to her. This is very risky because there is no title in the buyer and because you still have liens on the property. If you default on either mortgage, the property will be foreclosed on even if she is current; and if you get sued and have a judgment entered against you, or if you file bankruptcy, the property could be lost because it is still your asset. If the banks allow, she may be able to assume the existing loans as part or all of the purchase price, and you could take back a 3rd mortgage for any extra purchase price, and convey the property now, or if she can't assume the existing loans she should take out a new loan to buy the property and pay off the existing ones. See an experienced real estate lawyer to discuss the best approach.