Attorney Bill Bronchick Explains the Difference Between Lease-Options and Contract for Deed

 When you're thinking about selling your property with creative seller financing such as a 

lease with the Option to buy, or a "Contract for Deed" (also commonly known as a "Land 

Contract") you really need to make sure and decide how much control you want to give the 

"end" tenant-buyer and/or Buyer when you sell. I am not an attorney, therefore I don't ever 

give out any legal advice. I do have a short video for you though with real estate attorney 

Bill Bronchick, who explains the differences between the two types of contracts. This will 

allow you to make the most educated decision and help you decide which of the two 

options are best for you. 

Crucial Differences to Consider Before You Sell  

Using Either a Lease-Option or a Contract for Deed

When you work with home owners, wholesale real estate investors, landlords, property 

managers, and Realtors, I have noticed a fair amount of confusion between these two exit 

strategies. The objective of this blog post and the video I shared, is to help you understand 

and know the fundamentals of both before you enter into a contract. 

Lease-Options:

• Ordinarily 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 exit strategy is not considered a sale because the tenant-buyer has the "option" to buy and the "option" not to buy.

Contract for Deed:

• Ordinarily you can ask for 10-20% down upfront (non-refundable), and if the end buyer fails to pay their mortgage, you will need to foreclose on them.

• This exit strategy is considered a sale.