Why Buyers Should Consider a Bond for Deed

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


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."

Bond for deed information for sellers. 

Advantages for Buyers

  • The buyer is not a tenant and has all advantages of home ownership.
  • The buyer can build equity by amortizing the BFD and market appreciation over time.
  • They buyer gets the tax deduction for taxes and interest paid.
  • There is no credit, income or other underwriting requirements.
  • The state BFD statues protect your interest in the property.

Contact me for a list of bond for deed homes in South Louisiana


Disadvantages for Buyers

  • If you fail to pay you will have to vacate and forfeit everything you have paid - the same as if you bought under a mortgage.
  • A bond for deed purchaser does not qualify for the homestead exemption in most parishes.

                                                   bond for deed

Escrow Services and Why You MUST Insist on One or Walk Away

If there is a mortgage on the property, it's the law!  If there is not a mortgage on the property, the seller is required to keep a full accounting of every payment as to its P&I allocation, quote accurate payoffs to lenders to which the buyer applies for refinancing, and report 1098 interest to the IRS.  The purpose of a bond for deed is to provide a bridge to regular financing.  The escrow service will keep track of your payments, insurance and interest.  Making on time payments will help your credit when it becomes time to refinance.  And more than likely you will have to refinance to a regular mortgage.  So pay on time and work on your credit score.  The motives of a seller that demands direct payment is suspect. Don't do it!


Special thanks to Escrow Services Inc for providing 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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Anna Chroscicki
Re/Max Masterpiece Realty - Port St Lucie, FL
Realtor - St. Lucie County affordable Real Estate

That is so interesting how we can have such a different Real Estate terms, laws, etc in one counrty but different state.

There is no such thing in Florida...

There is owner financing...But it is regular purchase and seller becomes lender only. Title to property belongs to buyer from the beginning...hmm.

One more reason why we should not (as Real Estate Agents) give advise to friends and family living in different states on Real Estate transactions... 

Very good blog. Love it. 


Feb 12, 2016 02:00 AM #1
Lana Mosley
Keller Williams Realty Services - Hammond, LA
Building my empire one listing at a time.

Thanks Anna!  In Louisiana, bond for deed is regulated by the Office of Financial Institutions.  We even have language in the statutes protecting the buyer and seller in case of liens and death of either the buyer or seller!

Feb 12, 2016 02:06 AM #2
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Lana Mosley

Building my empire one listing at a time.
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