Frequently Asked Questions


How can selling on contract help me?

Often times, buyers are unable to obtain traditional mortgages.  If you sell your property on contract, you work out the terms of your sale directly with the person who is buying your property from you.  This allows you to negotiate the down payment and interest rate you will charge the buyer.

Even if your buyer can obtain a traditional mortgage, if you do not need the cash from the sale of your property right away, selling on contract allows you to charge your buyer interest.  So instead of the mortgage company making the interest, you, as the seller, make the interest.

How can buying on contract help me?

If you are a buyer and have had trouble getting a traditional mortgage, when you buy on contract, you work out the terms of your purchase directly with the person you are buying the property from.  This allows you to negotiate your down payment and interest rate.

Does a Contract for Deed have to be a long-term deal?

No.  You set the terms.  Many Contracts for Deed are five years or less with a ballon payment due at the end.  This time period allows the buyer to build up equity in the home and to repair their credit history.  They are then more likely to qualify for a traditional mortgage and pay off the balance due on the contract.

While they do not have to be long-term deals, that is an option as well.  Many of the contracts we escrow are 20-30 year deals, like traditional mortgages.

Will this work if I have a Realtor?

Absolutely.  There are two primary options for paying the real estate commission.  The first is to pay the commission out of the down payment.  That way the Realtor is paid at the time of closing.  If the down payment is not sufficient to pay the Realtor, then the real estate commission can be paid out over several months as the buyer makes their payments.

Is buying and selling on contract safe?

Like any contract, you are taking a risk that one of the parties may default on the contract.  As such, it is important to take steps to make certain you are protected.  Using an independent party, like Topeka Escrow Service, as your escrow agent is one step to help insure the terms of the contract are complied with.  It is strongly recommended that you obtain independent legal advice and use contracts drafted by an attorney or by a licensed Realtor.

Do I need title insurance?

It is not a legal requirement, but is recommended.  All area title companies handle Contracts for Deed and we work with them to ensure your closing process is as smooth as possible.

Do I have to use a company like Topeka Escrow Service?

No.  The law does not require you to use an independent third party to escrow your Contract for Deed.  Using a service like Topeka Escrow Service, provides protection to make certain that when the terms of the contract are fulfilled that the legal documents conveying the property are transferred to the buyer.  Having an independent third party serve as the escrow agent provides both the buyer and seller protection and an accurate recordkeeping of the payment history.  In addition, we report interest for both parties to the Internal Revenue Service.

What does escrowing of taxes and insurance mean?

Like a traditional mortgage company, Topeka Escrow Service collects from the buyer 1/12 of the annual insurance premiums and 1/12 of the annual property taxes.  When the insurance and taxes come due, Topeka Escrow Services make them for you.  That way, the seller does not have to worry about those payments being made and the buyer does not have to come up with the funds all at once.

How do we go about getting a Contract for Deed drafted?

If you have a Realtor, they often have an addendum that they can use with your standard Real Estate Contract.  We strongly encourage you to use a prepared form from your Realtor or to contact an attorney to prepare the documents for you.  There are many good Real Estate attorneys in Northeast Kansas.  Upon request, we will gladly provide you the names of other attorneys we work with on a regular basis.

Are there other terms used instead of Contract for Deed?

Yes.  They are often called installment contracts as well.

If I have a rent to own contract, can Topeka Escrow Service help me with that?

Yes.  While different from a Contract for Deed, Topeka Escrow Service will set up an escrow account for you and assist you with your rent to own contract.

What happens if the buyer fails to make their payments?

Your Contract for Deed should set forth what happens in the event your buyer defaults on their payments.  Generally speaking, you have legal remedies available to you to cancel the contract.  You should fully learn about these remedies prior to entering into a Contract for Deed by seeking the advice of an attorney.

What other services does Topeka Escrow Service provide?

In addition to Contracts for Deeds, we setup escrow accounts to hold documents, such as recorded mortgages and promissory notes, funds, or just about any other item that can legally be held.  We provide these services for banks, law firms, governmental entities, and everyday individuals. 

What will it cost for me to have an escrow account with Topeka Escrow Service?

To setup an escrow account, we charge $200.00.  While we manage the escrow account for you, we charge a per transaction fee of $25.00.  And when the escrow account is closed, there is a fee of $75.00.  These fees are subject to change.  Generally, the buyer and seller split these fees, however, that is subject to negotiation.