We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is a Bond for Deed?

Mary McMahon
By
Updated May 16, 2024
Our promise to you
MyLawQuestions is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At MyLawQuestions, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject-matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

A bond for deed is a type of real estate sale where a buyer makes a series of payments to the seller, and when the payments are completed, the seller transfers the deed to the property. This procedure is also sometimes known as a contract for deed, and it is not available in all areas. People exploring methods of real estate financing can discuss a bond for deed with an attorney or real estate agent to see if it is an option and to discuss whether it is a good financing choice.

This approach to real estate transactions is most common when there are problems making it difficult to get a conventional loan on the property. The buyer may not qualify for a loan, for various reasons, but can still provide a down payment and make periodic payments. The property itself may be difficult to finance, as many banks will decline to lend on properties in poor condition. In the bond for deed, people can structure the arrangement in a number of ways, but it boils down to allowing the seller to retain the title to the property until it is paid for.

This differs from other real estate transactions, where the title is transferred to the buyer with a lien, allowing the seller or a mortgage company to repossess it if the buyer does not meet the contract obligations. People considering a bond for deed can be at risk, as usually the terms of repossession are much less forgiving. Missing payments can have serious consequences when people don't hold the title to the property, and the conditions of the contract should be carefully reviewed.

In some cases, the sale is arranged to allow the buyer to make periodic payments for a short period, and then the buyer is expected to seek financing to pay off the remainder of the loan so the seller can collect the funds. In this type of bond for deed, if the buyer cannot get financing when the time comes, the property will be forfeit and the buyer will have to leave. Any funds paid on the property will be considered the property of the seller, including the down payment made.

If a bond for deed is an option legally, sellers may still reject an offer for a bond for deed transaction. For sellers, there are some risks to this type of financing. They do not collect the funds immediately, a potential problem for people trying to sell property and use the proceeds to relocate. They also have to administer the payments, something not everyone is willing to do, and if a problem occurs, they will have to expend money on hiring attorneys and compensating sheriffs for assisting with the repossession.

MyLawQuestions is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Mary McMahon
By Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a MyLawQuestions researcher and writer. Mary has a liberal arts degree from Goddard College and spends her free time reading, cooking, and exploring the great outdoors.

Discussion Comments
Mary McMahon
Mary McMahon

Ever since she began contributing to the site several years ago, Mary has embraced the exciting challenge of being a...

Learn more
MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.

MyLawQuestions, in your inbox

Our latest articles, guides, and more, delivered daily.