Legal Definitions - bond for deed

A bond for deed is a type of real estatetransaction where the seller finances the purchase of the property for the buyer. The buyer makes payments to the seller over time, and once the full amount is paid, the seller transfers the title of the property to the buyer.

Example 1: John wants to buy a house, but he doesn't have enough money for a down payment. He finds a seller who is willing to do a bond for deed. John makes monthly payments to the seller, and once he has paid the full amount, the seller transfers the title of the property to John.

Example 2: Mary inherited a piece of land from her parents, but she doesn't want to keep it. She decides to sell it using a bond for deed. The buyer makes monthly payments to Mary, and once the full amount is paid, Mary transfers the title of the land to the buyer.

These examples illustrate how a bond for deed works. It is a way for buyers to purchase property without having to come up with a large down payment, and for sellers to finance the sale of their property. It is important to note that the seller retains the title of the property until the full amount is paid, so the buyer does not have full ownership until the end of the payment period.