It's been a while since we talked about I contracts for deed, and now the time has come to talk about the down payment you might need if you buy on a contract.
The things you need to keep in mind when buying a home on a contract for deed are the seller's costs and other interests. If the seller has his home listed with a Realtor, then he will owe his agent their commission. (Buying a home on a Contract for Deed is the same as buying it with any other financing.) That's a big one. So if you're buying a $150,000 house on a contract and the seller has an agreement to pay, say 5% commission, then you will need at least $7,500 to cover this cost.
The seller of any house will have other closing costs as well, but they will typically be minimal.
The other major interest the seller will have is the safety of his investment, namely, the house you're buying. He will want to know that you will take good care of it, and the way to show that is by putting money down. The more money you put down, the more you have invested, the greater the stake you have in the house, the better he'll feel. He doesn't want you to neglect the house or, worse, walk away from the contract.
So you'll have to come up with a substantial amount of money to buy a home on a contract for deed, just as you would if you were buying a home with normal financing. How much depends, of course, but I would not be surprised if the seller required seven, eight, or even ten percent down.
But don't forget: outside his costs to close (commission, etc.) everything is negotiable.
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