Is Lease Purchase the Same as BFD?

Bond for Deed vs. Lease Purchase: What’s the Difference?

When it comes to creative financing in Louisiana, two terms often come up: Bond for Deed and Lease Purchase. While they may sound similar, the differences are important for both buyers and sellers to understand.

Bond for Deed

A Bond for Deed is a Louisiana-specific agreement where the buyer makes payments directly to the seller until the purchase price is fully paid. Once the balance is complete, the deed transfers to the buyer, making them the legal owner. This option allows buyers to build equity as they pay, and it provides sellers with structured payments over time.

Lease Purchase

A lease purchase, on the other hand, is essentially a rental agreement with an option to buy. The buyer (tenant) does not gain any ownership rights while making payments, and equity is not built during the lease term. Ownership only transfers if the buyer later secures financing and closes on the property.

Why Accurate Tracking Matters

Both options require careful tracking of payments, taxes, and obligations. Without proper oversight, it is easy for confusion to arise over what has been paid, what is still owed, and who is responsible for property taxes. That is where an escrow company like Team Escrow Services becomes essential. We manage payments, maintain accurate records, and ensure transparency so both buyers and sellers stay protected.

Understanding the difference between Bond for Deed and lease purchase can save you from costly mistakes. If you are considering either option, make sure your payments and records are handled with the accuracy and security that only professional escrow servicing provides.