Why Do a Bond For Deed?

Real Estate Agent with Keller Williams Realty Services SALE.0995688925-ACT

*Please note- this is only information for Louisiana*

What is a bond for deed?

"A bond for deed is a contract to sell real property, in which the purchase price is paid in installments and in which the Seller, after the payment of a stipulated sum, agrees to deliver title to the buyer."

  • It is a contract, not a "sale", with the promise to transfer title when contract is paid
  • All terms are negotiable between parties
  • Installments can be one or as many as the parties agree to
  • Title stays in Sellers name until contract is paid in full, in accordance with terms

There can be many advantages for Sellers to consider Bond for Deed.  You increase the pool of prospective buyers by offering "seller financing".  Your property might be difficult to finance in the current market, such as rural property, manufactured housing, a rehab property, or commercial.  A bond for deed is less expensive and quicker to close (usually within 7 days).  

An escrow service is essential.  If you have a mortgage on the property, it is required by law!  Whether or not there is a mortgage, the seller is required to keep a full accounting of every payment as to it's P&I allocation, quote accurate payoffs to lenders to which Buyer applies for refinancing, and report 1098 interest to the IRS.  Do you want this responsibility when the buyer can pay a small monthly service fee to the escrow service company?

A Bond for Deed transaction allows

  • Seller to get all or part of their equity and gets mortgage, taxes, insurance, maintenance & upkeep paid while still retaining title.
  • Buyer gets benefits of home ownership - market value appreciation, equity build up through BFD amortization, tax deduction, full value for improvements and investment in property, and opportunity to rent or market for a profit.

A few FAQ's

What happens if they don't pay?

  • If they don't pay, they don't stay.  Depending on the contract, they buyer would have a set number of days (usually 45) to bring the payment current or the seller can cancel the BFD.
  • The buyer forfeits all payments to the Seller if canceled for non-payment. 

I am afraid they may ruin my property!

  • Meet the buyer!
  • The down payment is your protection!
  • Contract gives you rights to inspect and protect your property.   

I will follow up soon with a post with advantages for buyers with a BFD.

If you have questions about bond for deed and you are in the Hammond, Louisiana area, please contact me!

Special thanks to Escrow Services Inc for the information!


Posted by
Lana Mosley, Realtor
Keller Williams Realty Services
710 SW Railroad Ave, Ste C
Hammond, LA 70403
Cell: 985-710-1118
Office: 985-318-1018


Licensed in Louisiana
Each office independently owned and operated

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Lana Mosley

Building my empire one listing at a time.
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