What is Bond for Deed?  How does it work? Why would I do it?  How am I protected? These are the questions you should ask yourself if you are selling your home in today’s real estate market. 

What’s a Bond for Deed?  It’s when you sell your home and the buyer pays you a down payment and then installments over an agreed upon time, typically 12 to 36 months.  After that time the buyer gets a mortgage, pays you the seller in full and your mortgage is paid off. 

How does it work?  Louisiana has been doing Bond for Deeds since 1934.  Louisiana law requires a licensed escrow agent to handle Bond for Deeds.  The buyer pays payments to the escrow agent and they pay the mortgage and disburse funds to the seller. 

Why would I sell my home this way?  In a buyer’s market where there is a 6 month or more of home inventory doing bond for deed gives you an option that other sellers may not.  It’s supply and demand.  Buyers want houses, they have a down payment but credit issues due to divorce, being self employed, job downsizing, etc.  It’s not a lease.  If the buyer does not pay they are required by law to vacate the home within 45 days and they forfeit all monies paid to you the seller.  Bond for Deeds do not fall under the tenant and landlord act. 

How does it protect me the seller?  It’s much easier to get a seller from the house in case of default compared to owner terms.  The buyer pays the escrow agent.  You receive receipt of payment and monies over and above your mortgage payment.  The contract is recorded in both parties’ names.