Difference Between a Lease-Option and a Contract for Deed Explained by Attorney Bill Bronchick5/11/2016
When considering selling your property with creative seller financing such as a lease with the Option to buy, or a "Contract for Deed" (also known as a "Land Contract" you've really got to decide how much control you want to give the "end" tenant-buyer and/ or Buyer when you sell.
Attorney Bill Bronchick explains the differences in each of these types of contracts and what you should consider before selling in either fashion. Since I'm not an attorney, and I do not ever give out legal advice, I figured I'd let a real estate attorney like Bill Bronchick explain it all to you here in this video: Keys Differences to Consider Before You Sell
|
In the last 7 years of working with home owners, wholesale real estate investors, landlords, property managers, and Realtors, I've noticed quite a bit of confusion between these two exit strategies, so the goal of this blog and the video above, is to help you understand the fundamentals of both before you enter into a contract.
|
|
- Usually you can safely collect 3-5% upfront (non-refundable) and if the "end" tenant-buyer fails to pay their rent on time (or at all), you can evict them.
- This is exit strategy is not considered a sale as the tenant-buyer has the "option" to buy and the "option" not to buy.
Contract for Deed:
- Usually you can ask for 10-20% down upfront (non-refundable), and if the end buyer fails to pay their mortgage, you'll need to foreclose on them.
- This exit strategy is considered a sale.
Leave a Reply.
Author
My name is...
Russell de la Peña, and I am a former Realtor with both Keller Williams Realty and Re/Max City Horizons out of Denver, CO. I'm originally from Los Angeles, CA, where I currently reside today, and I have authored a few books related to real estate investing and credit repair. I own a creative seller financing training school online and work with, and serve, new and seasoned real estate investors alike for a living.
Archives
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
Categories
All
Auction Strategy
Buyer Doesn't Buy
Pricing Your Rental
Realtor Can't Sell Your House
Seller Financing - Pros And Cons
Sell Without Equity
Sell Your Home Rent To Own
Tenants From Hell
What Is A Lease Option